車Industrial Organizations 'Last' Among Major Korea Labor Flexibility Countries..."We urgently need to redesign the legislation."

*This content was translated by AI.

The Korea Federation of Industries Forum (KIAF) and the Korea Automobile Mobility Industry Association (KAMA) held the 83rd Industrial Development Forum at the Automobile Center in Seocho-dong, Seoul on February 25 under the theme of "The Finance of Labor Flexibility - Comparison of Labor Laws in Major Countries and Implications for Korean Companies." In addition to the diagnosis that Korea's rigid labor legislation is undermining national competitiveness, the forum was followed by suggestions that fundamental system improvements are needed in all areas, including working hours, layoffs, and dispatches.

KIAF Chairman Chung Man-ki cited the difference in labor market flexibility as one of the main reasons, referring to the economic performance gap between South Korea and Taiwan in a greeting. According to the IMF and others, Korea's real GDP growth rate in 2025 was only 1.0%, while Taiwan recorded 8.6%, and Taiwan surpassed Korea in nominal GDP per capita. Chairman Chung stressed that Taiwan has secured flexibility in working hours through the modified work system and setting monthly overtime work limits, and argued that it is urgent to expand flexibility to respond flexibly to market demand, focusing on high-tech and R&D industries. In particular, it should be taught that high-income European countries maintain high labor productivity through flexible working hours, he added.

Kim Eun-ji, a lawyer at Dentonsri Law Firm who presented the topic, revealed the results of the analysis of flexibility of labor legislation by country through her own evaluation model. As a result of the analysis, Korea scored 43.0 out of 100, ranking the lowest among the nine countries to be compared, including the United States (99.25), Singapore (86.5), Germany (74.0), and China (65.25). Attorney Kim pointed out that while South Korea is tied to the "absolute upper limit" of 52 hours a week, major countries are taking a flexible management method, with the U.S. operating an additional wage system without a legal upper limit and Japan excluding the upper limit of overtime work for R&D work.

The gap in the dismissal and dispatch system was also noticeable. South Korea requires strict dismissal procedures and reasons, but the U.S. is dominated by the "At-Will" principle, and Singapore has high employment flexibility enough to terminate the contract with just notice. In particular, with regard to unstructured work, Korea adheres to a "positive regulation" that absolutely prohibits the dispatch of direct manufacturing processes, but Germany and Japan allow it in principle, and the United States and Singapore do not even have a limit on the dispatch period. It was also pointed out as a problem that South Korea imposes strong criminal penalties such as imprisonment in case of regulatory violations, while major countries prioritize civil liability or economic sanctions centered on fines.

Experts who participated in the designation debate criticized the strict interpretation of the judiciary and the limitations of the domestic system that deviated from international standards. Lee Kwang-sun, a lawyer at law firm Yulchon, emphasized, "There is no 'white-collar executive' despite the higher wage level than Japan, and even the exception of management and supervisors should be interpreted extremely narrowly by the court to improve the reality that even on-site directors or non-registered executives are not recognized for working hours exceptions." It also pointed out the structure that bears enormous risks such as direct employment obligations and criminal punishment if a contract to evade dispatch regulations is deemed illegal, and suggested that it is urgent to switch the working hours limit on a monthly or annual basis.

Hwang Yong-yeon, head of the Korea Employers Federation, who attended on behalf of the management community, pointed out that the ban on all alternative work does not meet global standards ahead of the implementation of the revised union law in March, and urged the legal system to be improved, including allowing alternative work to balance power between labor and management. Park Ki-hong, a professor at Chungbuk National University, suggested that the labor flexibility policy should not simply make layoffs easier, but should move toward "packaged labor market reforms" that include performance-based retraining centered on job success rates and reducing blind spots in unemployment insurance. Lee Jin-ki, a professor at Sungkyunkwan University, criticized the labor legislation for sticking to excessive protection while ignoring the civil law's principle of employment contracts, and emphasized the realization of an active labor market that respects market autonomy.

As such, participants of the forum agreed that to strengthen the competitiveness of the Korean labor market, it is essential to improve differential design and punishment-oriented sanctions that reflect the reality of each industry beyond simple regulation of the total amount of time

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*This content was translated by AI.