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The labor reform bill designed to protect non-regular workers passed the committee stage on Tuesday, a year and four months after the executive submitted it. While pending in the National Assembly, the bill has undergone many an amendment taking the demands of unions on board and generally aggravating the cost to businesses. The period before non-regular workers are automatically given permanent status has been reduced to two years, from three in the original draft. Employers wanted an increase in the number of jobs that can be outsourced to help management, but that did not happen.
Many agree that the treatment of non-regular workers must improve because they suffer significant discrimination compared with their regular counterparts. There are now 5.48 million of them, or 37 percent of the entire workforce, and their average salary of W1.16 million (US$1,160) is only 63 percent of the W1.85 million regular workers earn, while only 29.7 percent of them are signed up for national pension constributions and 43.1 percent for accident insurance.
But who should pay to protect them? If their wages are boosted to 85 percent of those of regular workers, it will increase the financial burden for businesses by W20.9 trillion(US$20.9 billion) a year. And when the non-regular workers get regular status after two years in the job, the cost will rise by another W7.5 trillion.
That means most companies will cut jobs if the proposed changes go into effect. Since it is difficult to lay off regular workers, it will be once again the non-regular workers who bear the brunt. Straight away, the 1 million-plus non-regular staff who have been in their job for more than two years will get the sack. Companies will try to lay off as many contract workers in clerical jobs like secretaries and administrators. The plan could give rise to a whole new employment pattern, where non-regular workers are habitually fired just before they complete two years. Far from protecting contract workers, the bill will cost them their jobs.
Businesses hire more non-regular staff because hiring regular workers is too costly. No matter how bad the economic situation, employers find it practically impossible to reduce the salaries of regular staff, let alone dismiss them. Union opposition also stops them building plants or investing abroad. In short, we cannot address the problem of non-regular workers unless this excessive protection of regular workers ends.
Cornered by militant trade unions, businesses have found in contract work a safety valve for their difficulties. If even that is denied them, they really will have no choice but to pack up and go abroad. The government must confront the urgent problem of excessive protection for regular employees head on before the exodus begins.
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