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Subject   Agreement by Labor, Management & Government on Improving the Labor Market
Agreement by Labor, Management & Government on Improving the Labor Market – Tripartite Commission agreement of Sunday, September 13, 2015
노동시장 구조개선을 위한 노사정합의문 (외투기업 자문사의 요청으로 번약하게 됨 - 최초로 전문 전체 번역함 - 정봉수 노무사 작업)

I. Vitalizing Youth Employment through Cooperation between Labor, Management & Government

1. Efforts to expand youth employment
- As a way forward through the expected youth employment crisis over the coming three years, large companies and state-owned companies shall make efforts to increase new employment of the youth. The government shall ensure the provision of policy support for those companies hiring young applicants, such as with subsidies for employment, tax exemptions for job creation, exemptions from tax audits, providing long-term assistance for small and medium-sized companies (hereinafter referred to as “SMEs”), and providing favorable evaluation when choosing companies bidding for public contracts.
- By increasing investment and adjusting wages and working hours, Labor, Management and Government (Hereby referred to as “the Tripartite”) shall actively endeavor to develop a win-win employment ecosystem between the generations through expanding youth employment opportunities. In particular, management will make use of financial savings from introduction of peak wage systems towards employing more young applicants. Companies shall make further efforts to increase employment of the youth by refraining from voluntarily increasing the salaries of their high income directors and employees, and management will also share in equal efforts.
- In order to promote youth entry into SMEs, the Tripartite will lessen the gap in wages and benefits between large companies and SMEs, promote the competitiveness of SMEs and improve their working conditions, and actively support the best SMEs, such as future-oriented small companies.
- In order to promote business start-ups by the youth and increase their employment opportunities, the government will assist them through venture loan systems that benchmark domestic and overseas examples for technology-based startups. The government will also enlarge the scope of companies to which the Employment Impact Assessment will apply, to increase the effects of job creation.

2. Reinforcement of social support
- By means of reinforcing the public support of social enterprises, cooperative associations, startups, and public social services where youth like being employed, the youth shall be encouraged to find opportunities to engage in social activity.
- In order for the youth to receive systematic employment support from their school years, the school and job center shall work in cooperation, and it is necessary to expand and reorganize the employment success package centered upon the youth. In particular, opportunities need to be extended for participation in job training programs to increase employment of students in the humanities, arts and sports.

3. Employment promotion consulting body for the youth
- The Tripartite will create a separate consulting body of relevant government agencies, labor and management representatives, and labor specialists at the earliest possible juncture as a way of promoting youth employment in a concrete way.

II. Correcting the Dual Structure of the Labor Market

- As a means of reducing the dual structure of the labor market, the Tripartite will suggest a target for reducing the gap in wages and working conditions between large companies and SMEs, implement joint projects to accomplish targeted goals, and monitor implementation under cooperation between labor and management.

1. Mutual growth by means of win-win cooperation between contractors and subcontractors, and between large companies and SMEs
1-1 Vitalizing benefit sharing
- Labor and management at large contractors shall not pass on the cost of salary increases to subcontractor SMEs, and shall work towards mutual growth by improving competitiveness in terms of wages and benefits.
- Tax-related incentives will be given through this win-win cooperation between large companies and SMEs as they work to improve working conditions of subcontractor employees.
- The government will improve the mutual growth index, promote excellent models of benefit sharing, and look on participating companies favorably when those companies apply for policy funding and R&D subsidies. The government will also cultivate a joint countermeasure system between contractors and subcontractors, and expand its support of joint training.

1-2 Burden sharing by each member of the Tripartite
- The Tripartite will vitalize welfare projects for SMEs and irregular employees through the use of an intra-company labor welfare fund and introduction of a joint labor welfare fund between SME suppliers. The government will provide various tax benefits for contributions to those funds. In addition, the Tripartite will increase the labor welfare promotion fund and reinforce stability for irregular and low income employees.
- The top 10% of directors and employees, in terms of income, will refrain from increasing their salaries voluntarily, and use the resulting savings (plus additional contributions by each company) to enable the Tripartite to push ahead with improving working conditions for irregular and SME supplier employees. Labor and Management will make efforts to greatly expand the burden sharing and win-win employment movement, while the government will reinforce its support of win-win employment incentives and improve the taxation and social security system in accordance with this employment-friendly trend.

1-3 Strengthening the Tripartite partnership for win-win cooperation
- The Tripartite will create social responsibility action rules for win-win cooperation, and reward companies involved in excellent examples of such cooperation.
- The Tripartite will develop a system to vitalize labor and management participation and cooperation towards improvement of employee productivity and benefits, and expand on exemplary win-win cooperation between contractors and subcontractors.

1-4 Establishing fair trade orders and vitalizing the market economy
- Contractors will refrain from burdening subcontractors with the cost of the contractors’ low prices, while the government will support revitalization of the Coordination Council to Adjust Supply Prices. In addition, the government will vitalize the mandatory reporting system for unfair transactions, provide bidding restrictions to prevent unfair transactions, improve the payment system for subcontractors, protect anonymous informants, and promote the use of standard contracts.
- In order to correct the negative impacts of the “lowest bidder” system, the overall review bidding system applicable to public procurement contracts will be gradually expanded.
- The government will provide improvements such as through a classification system where standard wages are paid according to type of business and work.
- The government will refrain from price controls so as to avoid damaging companies in terms of their ability to employ, pay wages, and improve service quality.

2. Employing irregular employees and improving the discrimination correction system
2-1 Establishing healthy order in employment
- The Tripartite will prohibit unreasonable discrimination, hire regular employees for regular and continuous jobs as much as possible, refrain from using too many irregular employees just to save on labor, and work to reduce the number of irregular employees voluntarily in the mid to long term.

2-2 Leading role of the public sector
- The government will lead improvements to the employment structure by extending the current plans to convert the status of irregular employees currently engaged in regularly continuous wo
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33 (1/2)
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27 Kangnam Labor Law Firm’s Spring Seminar of 2019
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Agreement by Labor, Management & Government on Improving the Labor Market  
16 Publishing the revised version of A Bilingual Code of Korean Labor Law (2015)  
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