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DE RUEHUL #0549/01 0480607
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P 170607Z FEB 06
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC PRIORITY 6056
INFO RUEHBJ/AMEMBASSY BEIJING 0098
RUEHKO/AMEMBASSY TOKYO 0178
RHMFISS/COMUSKOREA J2 SEOUL KOR
RHMFIUU/COMUSKOREA SCJS SEOUL KOR
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFISS/COMUSKOREA J5 SEOUL KOR
RUCPDOC/DEPT OF COMMERCE WASHDC 1347

UNCLAS SEOUL 000549 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/K AND EB/TPP/BTA 
PASS USTR FOR CUTLER AND KI 
 
E.O. 12958: N/A 
TAGS: ECON ELAB ETRD KS PGOV
SUBJECT: LABOR SNAPSHOT: MEETING THE STANDARDS 
 
REF: A. SEOUL 507 
     ¶B. SEOUL 548 
     ¶C. 05 SEOUL 3023 
     ¶D. 04 SEOUL 4843 
     ¶E. 05 SEOUL 3880 
     ¶F. 04 SEOUL 4149 
     ¶G. 05 SEOUL 2601 
 
SENSITIVE BUT UNCLASSIFIED -- PLEASE HANDLE ACCORDINGLY 
 
SUMMARY AND INTRODUCTION 
------------------------ 
 
¶1.  (SBU) This is the final report in a three-part series on 
labor-management relations in the ROK.  In previous cables we 
described the major players (Ref A) and current issues (Ref 
B).  We now focus on whether Korean labor laws meet the core 
labor standards contained in the Trade Promotion Authority 
Act of 2002 (TPA).  As set forth below, the ROK Constitution 
and laws that govern labor and employment provide substantial 
protections that apparently meet or nearly meet all five 
standards.  END SUMMARY. 
 
CORE LABOR STANDARDS 
-------------------- 
 
¶2.  (SBU) The TPA sets forth that one of the USG overall 
trade negotiating objectives must be to promote respect for 
worker rights and the rights of children consistent with core 
labor standards.  The Act defines those standards to be: (A) 
the right of association; (B) the right to organize and 
bargain collectively; (C) a prohibition on the use of any 
form of forced or compulsory labor; (D) a minimum age for the 
employment of children; and (E) acceptable conditions of work 
with respect to minimum wages, hours of work, and 
occupational safety and health. 
 
RIGHT OF ASSOCIATION 
-------------------- 
 
¶3.  (SBU) Workers in the ROK have a Constitutional right of 
association (Article 21) and the right to form or join trade 
unions (Article 33).  This right is further spelled out in 
the 1997 Trade Union and Labor Relations Adjustment Act 
(TULRAA), which states that a labor union can be formed by an 
organization or associated organizations of workers for the 
purpose of maintaining and improving their working conditions 
and enhancing their economic and social status.  The 
organization will not be regarded as a labor union in cases 
where an employer or other persons who act in the interest of 
the employer are allowed to join; in cases where most of its 
expenditures are supported by the employer; in cases where 
activities are aimed only at mutual support or improvement; 
in cases were those who are not workers are allowed to join; 
and in cases where the groups' aims are mainly directed at 
political movements. 
 
¶4.  (SBU) The OECD in 1996 expressed concern that public 
servants and teachers could not organize unions in Korea. 
The situation has changed significantly since then.  In 1999, 
about two-thirds of civil servants obtained the right to join 
workplace associations to consult with management on working 
conditions and grievance handling.  Teachers obtained the 
right to join trade unions (but not to strike) under a 
separate 1999 law.  In a law that went into effect on January 
28, 2006, the National Assembly recognized lower grade (below 
grade 5) public servants' right to organize, bargain 
collectively, and negotiate collective agreements.  The law 
applies to approximately 75 percent of government employees. 
 
¶5.  (SBU) However, the Korean Government Employees Union 
(KGEU), with 140,000 members, and the Confederation of 
Government Employees, with 70,000 members, have refused to 
register under the law because it does not apply to all 
public servants and does not allow the right to strike or 
take other collective action.  The International Labor 
Organization (ILO) maintains that public servants should, 
without distinction, have the right to form and join 
organizations of their own choosing and that Korea's total 
exclusion of public servants of grade 5 or higher is a 
violation of the right to organize.  Diverging from the ILO, 
the OECD said that Korea has followed through on its 
commitment to allow trade unions endowed with bargaining 
rights. 
 
¶6.  (SBU) There is also an issue regarding restrictions on 
the right to strike among sectors that deliver "essential 
services," such as railways, gas, electricity and water, oil 
refineries and supply, hospitals and other medical services, 
and telecommunications.  In these fields, industrial conflict 
is subject to compulsory arbitration, which the ROKG has said 
is necessary to protect national security and guard against 
economic loss.  The ILO, however, has argued that the 
restrictions should only apply under conditions of "imminent 
threat to the life, personal safety or health of the whole or 
part of the population."  The labor reform roadmap (Ref B) 
suggests that instead of requiring compulsory arbitration for 
industrial actions involving essential public services, the 
law should be changed to require minimum services in areas 
where complete work stoppages would threaten the safety, 
health and daily lives of the public.  Collective action in 
other circumstances would be permitted. 
 
¶7.  (SBU) In addition, international organizations have also 
criticized Korea for the detention of trade unionists. 
Overall, the number of detained trade unionists has declined. 
 In 2004, the number of arrested trade unionists declined to 
71 from 165 in 2003.  Although government figures for 2005 
are not yet available, it appears from press reports that 
between 20 and 30 were arrested last year.  The Minister of 
Labor assured us in June 2005 that, in recent years, all 
arrests were the results of workers' acts of violence, 
"behavior that is not tolerated in any other OECD member 
country" (Ref C). 
 
¶8.  (SBU) The OECD and ILO have also expressed 
freedom-of-association concerns over employers' payment of 
full-time trade union officials.  As discussed Ref B, 
employers currently pay full-time union workers, even though 
they only work in the union office.  This practice will end 
January 2007.  The government's labor reform roadmap would 
allow employers to pay their union officials within certain 
limits. 
 
¶9.  (SBU) Further, the OECD and ILO have criticized Korean 
law for disqualifying an organization for union status if 
persons who are not workers are allowed to join.  Rather than 
exclude dismissed and unemployed workers as a matter of law, 
the OECD and ILO maintain that unions themselves should be 
able to determine the qualifications for union membership. 
The roadmap would change existing law so that membership in 
enterprise-level unions would be limited to those who are 
employed by the enterprise.  Qualifications for membership in 
non-enterprise based unions, meanwhile, would be decided by 
the unions themselves. 
 
RIGHT TO ORGANIZE AND BARGAIN COLLECTIVELY 
------------------------------------------ 
 
¶10.  (SBU) Workers have constitutional and statutory rights 
to organize and bargain collectively.  According to Article 
33 of the Constitution, "to enhance working conditions, 
workers shall have the right to independent association, 
collective bargaining, and collective action."  The TULRAA 
elaborates that it is an unfair labor practice to dismiss or 
treat a worker unfavorably because he has joined, attempts to 
join, or tries to organize a trade union.  The trade union 
representative has the authority to bargain and make a 
collective agreement with the employer's association for the 
trade union and its members.  The parties have a statutory 
obligation to bargain in good faith.  Unjustified refusal or 
delay of the execution of a collective agreement or of 
collective bargaining is an unfair labor practice, under the 
TULRAA. 
 
¶11.  (SBU) International organizations have criticized Korea 
for not allowing multiple trade unions at the enterprise 
level.  The government initially prohibited the practice out 
of concern for inter-union rivalry and the loss of time and 
resources for the employer in bargaining with several unions 
at the same company.  The law will change in 2007 to allow 
multiple unions (Ref B). 
 
¶12.  (SBU) Additionally, the ILO has also criticized Korea 
for requiring persons who assist trade unions and employers 
in collective bargaining or in cases of industrial conflict 
to register in advance with the government.  The roadmap 
proposes that the third-party assistance reporting and 
penalty provisions should also be abolished. 
 
PROHIBITION OF FORCED OR COMPULSORY LABOR 
----------------------------------------- 
 
¶13.  (SBU) Article 12 of the Constitution prohibits forced 
labor.  The TULRAA states that an employer shall not force an 
employee to work against his own free will through the use of 
violence, intimidation, confinement, or any other means by 
which mental or physical freedom of workers might be unduly 
restricted. 
 
¶14.  (SBU) In practice, forced or compulsory labor is mainly 
a problem in the context of the ROK's sizable sex trade.  In 
2003, the government estimated that around 330,000 women were 
involved in the industry.  We understand from government and 
NGO contacts that the domestic sex trade is run largely on a 
debt bondage system.  That is, women entering the sex trade 
are encouraged to borrow money in order to purchase clothing 
and accessories, or even the opportunity to work in a 
particular location.  The debt rapidly grows so that the 
women, even if they want to stop work, are compelled by the 
debt (and threats to use legal and extralegal means to 
collect) to continue working.  The government in 2004 passed 
sweeping legislation aimed at eradicating this industry (Ref 
D).  The laws strengthened the penalties associated with 
prostitution and trafficking, and provided a support 
structure, including legal, medical and social assistance, 
for women trying to escape.  The laws appear to have been 
somewhat successful in raising awareness of prostitution as a 
crime and in helping a number of women eradicate their debts 
and retrain into legitimate vocations.  However, prostitution 
and trafficking, and the coerced labor behind much of it, 
continues to be a concern (Ref E). 
 
CHILD LABOR PRACTICES AND MINIMUM AGE FOR EMPLOYMENT 
--------------------------------------------- ------- 
 
¶15.  (SBU) The TULRAA provides that minors under the age of 
15 shall not be employed in any work.  However, such minors 
may work with an MOL employment permit certificate, but only 
if compulsory education (which is mandatory through middle 
school) is not impeded.  For each minor worker under the age 
of 18, an employer must keep at each workplace a copy of the 
minor's family register verifying his or her age and a 
written consent of his or her parent or guardian.  Neither a 
person with parental authority nor a guardian may enter into 
a labor contract on behalf of a minor.  A person with 
parental authority, a guardian, or the Minister of labor may 
terminate a labor contract, if the contract is deemed 
disadvantageous to the minor.  Work hours of a person between 
15 and 18 may not exceed seven hours per day and 42 hours per 
week, except that work hours may be extended for one more 
hour per day and six more hours per week by agreement of the 
parties.  (This provision is gradually being revised to lower 
the total permissible hours per week to 40.  Currently, 
businesses with over 300 workers must abide by the new 
standards.  The rest will phase in through 2011.)  Minors may 
not work in a pit, unless authorized by Presidential decree. 
The ROK has ratified ILO Convention No. 138 on Minimum Wage 
and Convention No. 182 on the Worst Forms of Child Labor. 
Child labor is not considered to be a problem in the ROK. 
 
ACCEPTABLE CONDITIONS OF WORK: WAGES, HOURS, AND SAFETY 
--------------------------------------------- ---------- 
 
¶16.  (SBU) The Minimum Wage Act establishes a Minimum Wage 
Council that determines the minimum wage each year in 
accordance with the cost of living, wages of similar workers, 
labor productivity, and distribution of income.  In 2005, the 
Council set the minimum wage at 3,100 won (3.18 USD) per hour 
and 24,800 won (25.45 USD) per day.  This was an increase of 
9.2 percent from the previous year.  Workers earning the 
minimum wage may have difficulty providing a decent standard 
of living; however, most blue-collar workers earned 
significantly more than the minimum wage. 
 
¶17.  (SBU) The ROK is currently transitioning from a 44 hour 
to a 40 hour work week.  Businesses with over 1,000 employees 
switched July 1, 2004, and businesses with between 300 and 
1000 employees switched on July 1, 2005.  The implementation 
dates for the remaining employers are as follows: 100 and 300 
employees (July 1, 2006); 50 to 100 employees (July 1, 2007); 
20 to 50 employees (July 1, 2008); the remainder will switch 
prior to 2011 on dates yet to be determined.  By law, 
employees are entitled to holidays, monthly paid leave, 
annual paid leave, and for women, menstruation leave, 
maternity leave, and nursing leave.  A worker who has an 80 
percent or higher attendance rate in a given year is entitled 
to 15 days of paid leave. 
 
¶18.  (SBU) The Industrial Safety and Health Act promotes the 
safety and health of workers by establishing standards on 
industrial safety and health.  The Act charges the government 
with responsibility for establishing industrial safety and 
health policy and the business owners with the responsibility 
of observing standards for the prevention of industrial 
accidents.  Companies that employ 100 or more workers must 
appoint a person to be in charge of safety and health 
management.  The company must also establish an industrial 
safety and health committee comprised of an equal number of 
workers and employers.  If there is an imminent danger of an 
industrial accident, or if a serious accident has occurred, 
the business owner shall take necessary measures for safety 
and health, including suspension of operations, until work 
can be resumed in accordance with safety requirements. 
Workers who sustain injuries due to occupational accidents 
may receive compensation in accordance with the Industrial 
Accident Compensation Insurance Act. 
 
¶19.  (SBU) Nevertheless, Korea's accident rate was rather 
high. According to the Korea Occupational Safety and Health 
Agency, there were 2,825 fatalities in 2004 related to 
industrial accidents.  The government recently introduced a 
plan to publicize and impose sanctions on work places that 
have a high rate of accidents.  In July 2005, the Ministry of 
Labor said that construction companies with high accident 
rates would be restricted from bidding for government 
projects. 
 
¶20.  (SBU) Conditions of work appeared to be most problematic 
for foreign workers.  There are over 400,000 foreign workers, 
mostly illegal, who come from China, Bangladesh, Mongolia, 
the Philippines, Thailand, Nepal, Vietnam, Indonesia, Sri 
Lanka, and Pakistan to work in the ROK.  Most are employed to 
perform Korea's "3D" ("dirty, difficult, and dangerous") 
work.  The issue of foreign worker safety drew national 
attention in January 2005 when eight Thai women were 
paralyzed from working with toxic solvents at an electronic 
parts factory.  The Ministry of Labor subsequently conducted 
inspections in 5,000 workplaces and initiated several 
prosecutions for industrial safety violations.  The Ministry 
is also developing legislation that would extend the 
provisions of the Industrial Safety and Health Act to illegal 
foreign workers so that they can get the same legal 
protection to which Korean workers are entitled. 
 
¶21.  (SBU) Working conditions for foreign workers are likely 
to improve as the government continues to implement its new 
permit system for foreign workers (Ref F, Ref G).  Under the 
new systems, permit holders may only work in certain 
industries and have limited job mobility, but generally enjoy 
the same rights and privileges, including the right to 
organize, enjoyed by domestic workers.  By August 2005, 
14,800 workers had entered the country through the new 
system. 
 
OECD SCRUTINY OF ROK LABOR REFORM 
--------------------------------- 
 
¶22.  (SBU) Since the ROK joined the OECD in 1996, the OECD's 
Employment, Labor and Social Affairs Committee (ELSAC) has 
monitored Korea's progress in light of commitments made by 
the ROKG "to reform existing laws on industrial relations in 
line with internationally-accepted standards, including those 
concerning basic rights such as freedom of association and 
collective bargaining."  According to the OECD's 2005 review, 
Korean authorities have taken a number of important steps to 
meet their commitments, most of which were taken between 1996 
and 2000.  As of 2002, the OECD had concerns about the 
following remaining issues:  prohibition of multiple unions 
at the enterprise level; denial of civil servants' right to 
organize; prohibition in principle of employers' payment for 
full-time trade officials; the broad definition of "essential 
public services," where public servant actions were 
restricted; prohibition for unemployed or dismissed workers 
to become or remain trade union members; and the requirement 
for notification of third parties to industrial disputes. 
The OECD also reported that authorities were arresting trade 
unionists for activities that would be considered legitimate 
union activities in other OECD countries. 
 
¶23.  (SBU) In its 2005 review, the OECD noted the passage of 
the public servants' law and the development of the roadmap 
as "important developments."  ELSAC commented that the 
roadmap, if fully implemented, "would imply that Korea 
reaches the desired international labor standards in most of 
the items surveyed through the OECD's monitoring."  The OECD 
said that it had "no doubt of the political determination on 
the part of the (Korean) government and the main political 
parties to push through this reform agenda by the end of 
2006." 
 
COMMENT 
------- 
 
¶24.  (SBU) Organized labor has achieved tremendous progress 
in securing worker rights and benefits over the past 20 
years.  Through the mid-1980s, the Korean government brutally 
oppressed the labor movement.  Now, as set forth above, the 
ROK meets or nearly meets all the core labor standards, as 
defined by the TPA.  The OECD notes that passage of the 
roadmap would likely bring the ROK substantially in line with 
international labor standards.  Ironically, it is organized 
labor that is most critical of the roadmap (Ref B) and most 
likely to interfere with the near-term achievement of this 
milestone. 
VERSHBOW