The Discrimination Correction System concerning Non-regular Employees

Bongsoo Jung (Korean labor attorney, KangNam Labor Law Firm)

I. The Discrimination Correction System

The discrimination correction system is based on guidelines newly introduced in the “Act concerning Protection, etc. for Short-term and Part-time Employee” (hereinafter called “Short-term Employee Act”) and the “Act concerning Protection, etc. for Dispatched Employees” (hereinafter called “Employee Dispatch Act”), which together are referred to as the “Non-regular Employee Protection Act”. The discrimination correction system is designed to prohibit disadvantageous treatment (without justification) regarding wages and other working conditions of non-regular employees (a short-term, part-time, or dispatched employee) in comparison with target employees (a term-less contract employee, ordinary employee, or directly hired employee). The discriminative treatment can be rectified through the remedy process of the Labor Relations Commission.
The discrimination prohibition system for non-regular employees does not mean that the employer shall treat all working conditions of non-regular employees the same as working conditions of regular employees, however, the employer is prohibited from disadvantageous treatment without justification. That is, the employer is allowed to discriminate if there is a justifiable reason based on productivity, job skill, etc.

II. The Discrimination Correction System for a Short-term and Part-time Employee

1. Applicant for discrimination correction
The applicant for discrimination correction who can be protected from an employer’s discriminative treatment shall be an employee of the Labor Standards Act and shall also be short-term employees or part-time employees.

2. Estimating time for the status of short-term and part-time employees
The time to estimate the status of short-term and part-time employees is not the time of filing an application for discrimination correction, but the time the employer engaged in the discriminative behavior.

3. The scope of ‘wages and other working conditions’ in prohibiting discrimination
The scope of ‘wages and other working conditions’ deals with ① working conditions regulated in the Labor Standards Act and working conditions stipulated in the Collective Bargaining Agreement, Rules of Employment and/or Labor Contract. Therefore, the scope includes not only wages, but also working hours, holidays, leave, safety, health and industrial accident compensation.

4. Target employee for comparison
The judgment of discrimination for short-term and part-time employees shall require the existence of target employees for comparison. The target employees do not only play a role as comparison criteria to estimate disadvantageous treatment, but also play a role as the basis and criteria for the Discrimination Correction Committee to determine parameters of the correction order. In comparison with short-term employee, the target employees shall be term-less contract employees engaged in the same or similar job in the business or workplace (Article 8(1) of the Short-term Employee Act). In comparison with part-time employee, the target employees shall be ordinary employees who were engaged in the same or similar job in the business or workplace (Article 8(2) of the Short-term Employee Act).
The ‘same or similar job’ means the job that is similar in job classification, duties, and job specification. That is, it will be considered synthetically based on the possibility of substitution within each group of employees.

5. Disadvantageous treatment
Disadvantageous treatment means that short-term and part-time employees receive low treatment in wages and other working conditions in comparison with target employees. In judging whether or not there is disadvantageous treatment, it is a principle that detailed items relating to wages and working conditions paid to short-term and part-time employees shall be compared with detailed items paid to target employees.
As disputes occur, comparable wages and working hours shall be categorized and compared as follows: ① In cases where some aspect of wages and working conditions are better for target employees, but other aspects are lower; and ② in cases where short-term and part-time employees are treated disadvantageously in comparison with target employees on particular wages and working conditions; and (3) in cases where the employer provides other purpose-based wages and working conditions. In this case, payment in accordance with actual provision of labor service (overtime, nighttime, holiday work allowance, etc.) shall be exempted from the scope of comparison.
In cases where it is hard or impossible to compare detailed items or categories because of the inclusive wage system or annual salary system, the wages and working conditions of target employees shall be compared and estimated overall.
As part-time employees’ wages are determined based upon hourly wages, it is required to calculate ordinary employees’ wages into hourly wages to confirm whether or not there is disadvantageous treatment. In this case, the comparison basis shall be hourly wages calculated based upon ordinary wages per contractual working hours.

6. Justifiable reason
1) Concept of justifiable reason
If there is a justifiable reason that the employer treats short-term and part-time employees disadvantageously in comparison with target employees, disadvantageous treatment can be justifiable and will not be considered discriminatory.

2) Short-term employee and employment period
When the employer applied wages and other working conditions in proportion to the employment period for short-term employees and this resulted in disadvantageous treatment, it can be accepted as justifiable.

3) Part-time employee and principle of protection by time proportion
Working conditions of part-time employees shall be determined on the basis of a relative ratio computed by comparing the work hours of part-time employees with those of full-time employees engaged in the same kind of work at the pertinent workplace, which is an application of the proportional time principle (Article 18(1) of the Labor Standards Act). Accordingly, it is justifiable to apply wages and divisible working conditions in proportion to time.

4) Disadvantageous treatment in accordance with short-term employment
The difference in wage and working conditions in accordance with characteristics of short-term employment, such as employment type (e.g., short-term employee), can be regarded as justifiable. It will also be considered as justifiable when the employer excludes short-term employees from wages and working conditions paid based on long-term employment and/or continuous service, such as long-term service allowance and compensational special bonus for those who retiring after long-term employment.

5) Disadvantageous treatment due to employment condition and criteria
If an employer discriminates against an employee justifiably on account of different employment factors (such as career, certification of qualification, etc.), the disadvantageous treatment can be justifiable when such factors determine wages, etc.

6) Disadvantageous treatment based on employment methods and procedures
Even though employment methods and procedures (open employment/closed employment, written test/interview, etc.) are different, if shot-term and part-time employees provide labor service with the same conditions as target employees, then disadvantageous treatment is not justifiable solely because of different employment methods and procedures. However, if the employer applies employment methods and procedures differently in order to reflect different work performance ability, it can be utilized as indirect evidence to confirm differences in work performance ability.

7) Difference in the job scope
As the job scope is directly related to quality and quantity of work and becomes an important factor in determining wages, target employees shall be selected carefully in consideration of differences in job scope. Disadvantageous treatment in wages and working conditions due to differences in the job scope can be regarded as justifiable.

8) Difference in authority and responsibility related to job
It can be justifiable to discriminate based on wages in accordance with the level of authority and responsibility. If the employer pays allowances (position allowance, title allowance, etc.) corresponding to the level of authority and responsibility, even though the level of authority and responsibility were not reflected in determining wages, it can be justifiable to exclude such allowances for short-term and part-time employees who do not have such authority and responsibility.

9) Low labor productivity
If the reason short-term and part-time employees’ labor productivity is low is because of previous experience and/or prejudice and not the result of their service, then discriminatory practice is not justifiable. However, it is justifiable if the employer discriminates on wages according to a wage system based on low labor productivity in comparison with target employees.

10) Disadvantageous treatment in accordance with decision factors for wages and working conditions
It can be regarded as justifiable when the employer considers relevant factors (duty, ability, skill, technology, qualification, career, education background, service year, responsibility, achievement, performance, etc.) of labor service in determining wages and pays discriminative wages in accordance with such differences.

11) Legal allowances
Legal allowances, which are allowances to be paid by law, are additional allowances (Article 56 of the LSA) for overtime, nighttime and holiday work, annual paid leave allowance (Article 60(5) of the LSA), etc.

III. The Discrimination Correction System for a Dispatched Employee

1. Characteristics
A using employer as well as a sending employer is prohibited from discriminative behavior under the Employee Dispatch Act. Even though the discrimination correction system for dispatched employees is regulated identically to the discrimination prohibition for short-term and part-time employees, the system is different in content and interpretation because of the characteristics of dispatch employment.
In terms of both the legislative consideration of the discrimination prohibition system in the Employee Dispatch Act and the special characteristics of dispatch employment, the scope of prohibition shall be limited to ‘wages and other working conditions’ established in accordance with the dispatched employees’ labor provisions and entry to the workplace.
The using employer and sending employer are both considered parties to prohibit discriminative behaviors and, therefore, will share the responsibility of implementing any correction order, including fines levied for failure to implement the correction order.

2. Applicant for discrimination correction
1) Dispatched employee as an applicant for discrimination correction
The term “dispatched employee” means a person who is subject to employee dispatch as a person employed by a sending employer (Article 2(5) of the Employee Dispatch Act). Regardless of the form of contract, if the employee is a dispatched employee in reality, then he/she can be an applicant for discrimination correction.

2) Illegally dispatched employee as an applicant for discrimination correction
Under the Employee Dispatch Act, an illegal dispatch occurs when the employer: ① violates the permitted jobs of a dispatched employee; ② violates the length of dispatch period, and ③ operates a non-licensed dispatch business.

3. Subjects prohibiting discriminative treatment: sending employer and using employer
The Employee Dispatch Act (Article 21(1)) states that “A sending employer and a using employer shall not treat a dispatched employee in a discriminatory manner on account of them being a dispatched employee.” Accordingly, the persons responsible for prohibiting discriminatory behavior are the sending employer and the using employer. In addition, they will become the employer concerned for correcting discrimination. According to Article 34 of the Employee Dispatch Act, a sending employer is responsible for wages, annual paid leave, etc. as per the Labor Standards Act, while a using employer is responsible for working hours and recess, use of leave, etc.

4. The prohibition scope of discriminative treatment
In regards to discriminatory treatment, the dispatched employees’ ‘wages and other working conditions’ are analyzed differently from that of short-term and part-time employees, because the dispatched employee has particular characteristics of employment. Working conditions established in relation to the dispatched employee’s labor provision and entry to the using employer’s workplace shall not be discriminatory, and a sending employer and a using employer shall not discriminate against the dispatched employee by treating them less favorably than employees the using employer hired directly. However, such things like family allowance paid to directly hired employees, are not related to working conditions established by labor provisions and entry to workplace. Accordingly, such things are not prohibited.

5. Target employee in comparison
The dispatched employee’s target employee for estimating discrimination shall be “an employee engaged in the same or similar job in a using employer’s workplace” (Article 21(1) of the Dispatch Employee Act).

6. Disadvantageous treatment and justifiable reason
1) Basic principle
Whether there is disadvantageous treatment or not and whether such treatment is justifiable or not shall be estimated by considering the dispatch employment characteristics. Even though there is disadvantageous treatment, it can be justifiable if the reason is attributable to the type of dispatch employment (e.g., exclusion of promotion opportunity).

2) Wages of a dispatched employee
If a dispatched employee is subject to disadvantageous treatment in regard to wages, as the responsible person for the payment of wages is the sending employer, the dispatched employee can apply for a correction against the sending employer. In this case, when the amount that a dispatched employee received from the sending employer is less than the amount paid to the employee (target employee in comparison) engaged in the same or similar job, it is be discrimination.

3) Other working conditions of a dispatched employee
“Other working conditions” of a dispatched employee shall include items related to working conditions in accordance with “① labor provision of a dispatched employee” and ② “entry to a using employer’s workplace”.

IV. Discrimination Correcting Procedures

In cases where a short-term employee, part-time employee, or dispatched employee is subject to discriminative treatment, the employee can make a correction application to the Labor Relations Commission within six months from the occurrence date of the discriminative treatment (or the last day in case of continuing discriminative treatment) (Article 9(1) of the Short-term Employee Act, Article 21(2) of the Employee Dispatch Act).
In regards to the penal provision, it shall not be applied to the discriminative behavior itself. If the employer does not implement the correction order after the Labor Relations Commission has found discriminative treatment, the Minister of Labor can level a fine of up to 100 million won against the employer. Also, the Minister of Labor can order the employer to implement the correction order, and if the employer does not follow the order without a justifiable reason, he can be fined up to 5 million won.