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Subject   October 2017 - Annual Paid Leave and Foreign Workers
Annual Paid Leave and Foreign Workers

I. Introduction
According to the report by the Ministry of Culture, Sports and Tourism (released on July 16, 2017), the number of days granted for salaried employees' annual paid leave was 15.1 on average, while the number of days actually used was just 7.9 (52.3%). This is low in comparison to the average vacation days of OECD countries (20.6), with a usage rate of 70%.
According to Annual Paid Leave (Article 60) of the Labor Standards Act (LSA), employees who work 80% or more a year will be given a 15-day paid leave. For employees who have worked for three years or more, one day's paid leave is added for every two years of employment, up to a total of 25 days. However, in instances where incurred annual leave is not completely used, the employer shall compensate for the unused portion by paying ordinary wages. In Korea, the use rate of paid annual leave is only 50%, and the unused leave is compensated for. This does not fit with the purpose of annual paid leave, which was designed to rehabilitate the exhausted minds and bodies of employees through paid vacation, enabling them to live comfortable lives.
Especially for the non-professional foreign worker, regulations on annual paid leave are not specified in the standard labor contract, and employers do not actually grant the annual paid leave, nor do they compensate for it. In this regard, I would like to carefully review the standard rules of annual paid leave and the issue of excluding their application of annual paid leave for foreign workers.

II. Purpose of Annual Paid Leave and Legal Standards

1. Purpose of annual paid leave
Annual paid leave is intended to provide paid leave (separately from paid weekly holidays) in order to allow workers to realize a healthy and relaxed lifestyle. More specifically, the Constitutional Court stated the purpose of the annual leave: "Rest hours or weekly holidays are primarily for the physiological recovery of workers who have accumulated physical or mental fatigue due to daily or weekly work. Annual paid leave is designed to give workers freedom from work for a period of time and to have the opportunity to engage in social and cultural civic life by providing a voluntary leave period without a loss of wages. As for this, the Supreme Court also explains, "It is the purpose of providing an opportunity for mental and physical recreation and improving cultural life by exempting workers from the obligation to work for a certain period of time." Therefore, the objective of annual leave is to improve the quality of life of workers by adding aspects of cultural life in terms of relaxation from work.

2. Comparison of international and national standards for annual paid leave
The international standard for annual paid leave and the Korean standard as per the Labor Standards Act can be compared by dividing them into ① the number of leave days and requirements for the occurrence, ② method of use, ③ the guarantee of annual paid leave, and ④ compensation for unused leave.
The International Labor Organization (ILO) has adopted the Convention concerning Annual Holidays with Pay, 1936 (No. 52) and the Convention concerning Annual Holidays with Pay (Revised), 1970 (No. 132). ① In relation to the number of leave days and the requirements for occurrence, "In any case, a minimum of three weeks must be given for a year (Article 3), and an employee who is less than one year shall be entitled to paid leave in proportion to the period of service for that year" (Article 4). ② Regarding the use of annual leave, "Annual leave shall consist of at least two weeks to be given without its division, even though it can be used in separate days (Article 8), and annual leave shall be granted within one year after the entitlement of annual paid leave" (Article 9). ③ Annual paid leave should be given as paid during the working day (Article 7). ④ For unused annual leave, "Workers who have worked for the minimum period of six months shall be entitled to paid leave or compensation equivalent to the period of unused annual leave" (Article 11).
The annual paid leave (Article 60) in the Korean Labor Standards Act prescribes the use of leave in principle, but also specifies compensation for unused days.① As for the number of leave days and the requirements for the occurrence of annual paid leave, “An employer shall grant 15 days’ paid leave to a worker who has registered not less than 80 percent of attendance during one year (Article 1). After the first year of service, an employer shall grant one day’s paid leave for each two years of consecutive service in addition to the 15 days’ paid leave to a worker who has worked consecutively for 3 years or more. In this case, the total number of leave days including the additional leave shall not exceed 25 (Article 4). ② Regarding the use of annual leave, “An employer shall grant paid leave upon request by a worker. However, the leave period concerned may be changed, if granting the leave as requested by the worker might cause serious impediment to the operation of the business (Article 5). Paid leave can be used continuously over a certain day or several days. Here, if a worker requests a leave day by designating a desired date (a claim for a leave), the employer can adjust the date of the leave in consideration of the work. ③ In relation to the guarantee of annual paid leave, the annual paid leave shall be granted as paid off-days on the normal working days of the worker (Article 5). Therefore, annual paid leave shall not be granted on weekly holidays, unpaid holidays, or other paid holidays. ④ Regarding compensation for unused annual leave, "the annual paid leave will expire if not exercised for one year" (Article 7). This means that in the event that an employee fails to use the annual paid leave, the employer shall pay the employee for the unused paid leave.

III. Labor Law Application to Foreign Workers and Annual Paid Leave

1. Expansion of Labor Law Application to Foreign Workers
The Act on Foreign Workers’ Employment, etc. (hereafter the Foreign Workers’ Employment Act) was designed to promote a smooth supply and demand of manpower and the balanced development of the national economy, through the systematic introduction and management of foreign workers (Article 1). The purpose of the law is to provide foreign workers with employment in the 3D industries of SMEs with insufficient manpower; not to protect the foreign workers with labor laws. However, as foreigners enter the country and live and work together, they become residents of our country, and residents must be protected with the human rights guaranteed by the Korean constitution. These constitutionally-guaranteed human rights include labor rights, protection of working standards, and prohibition of discrimination under Article 32 of the Constitution (three rights of labor under Article 33), and social insurance under Article 34. Foreign workers have recently been securing precedents in the obtaining of human rights after a long period of stay in Korea.
The Supreme Court ruled in a case in 1995 that an accident involving an illegal foreign worker who is a worker applicable to Korean labor law should be recognized as an industrial accident by the Industrial Accident Compensation Insurance Act. This was the first case to recognize an illegal foreigner as an employee, and an illegal foreigner's occupational accident was also recognized as an industrial accident for the first time. Again, in 1997, the first case occurred in which the retirement allowance was paid to illegal aliens. In 2011, the Constitutional Court made it clear that foreign workers employed under the Employment Permit System also have the freedom to choose their occupation as a basic human right. In addition, in 2015, the Supreme Court recognized a labor union composed of

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