Minimum Wage Fixing Convention, 1970 (No. 131) - Republic of Korea (RATIFICATION: 2001)

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The Committee notes the observations of the Korea Confederation of Trade Unions (KCTU) and the Federation of Korea Trade Unions (FKTU) communicated with the Government’s report as well as the Government’s reply to these observations.

Article 1 of the Convention. Scope of application. Further to its previous comments on the possible coverage of domestic workers, the Committee notes that the Government indicates that efforts were being made to introduce labour legislation to improve the protection of domestic workers. The Committee requests the Government to provide information on any specific progress made with regard to the issues covered by the Convention.

Article 4(3)(b). Appointment of independent members of the minimum wage fixing body. Further to its previous comments on this matter, the Committee notes that, in reply to the FKTU’s reiterated concerns, the Government indicates that it plans to have discussions with relevant stakeholders on the need for any institutional improvement regarding the process of nomination of members of the Minimum Wage Council who represent the public interest. The Committee recalls that Article 4(3)(b) states that, wherever it is appropriate to the nature of the minimum wage fixing machinery, provision shall be made for the direct participation in its operation of persons having recognized competence for representing the general interests of the country and appointed after full consultation with representative organizations of employers and workers concerned.

Article 5. Enforcement. The Committee notes that both KFTU and KCTU raise a number of concerns regarding the effective enforcement of the minimum wage legislation. It notes that the Government indicates in its reply that it would increase the number of labour inspectors, designate minimum wage inspectors and increase the number of workplaces subject to minimum wage inspections gradually, and that it would consider revising the applicable rules to address minimum wage violations more effectively. Finally, the Committee takes note of the information provided by the Government in reply to its previous request on labour inspection activities and other enforcement measures. The Committee recalls that Article 5 calls for appropriate measures aiming at ensuring the application of the provisions relating to minimum wages and that Paragraph 14 of the Minimum Wage Fixing Recommendation No. 135 lists a number of examples of such measures.

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Article 1 of the Convention. Scope of application. In its previous comment, the Committee had requested the Government to explain whether domestic workers, who continue to be excluded from the coverage of the Minimum Wage Act, enjoyed any protection as regards minimum permissible levels of wages. The Government indicates that it is seeking ways, for instance through commissioned research, to protect domestic workers as well as those in various types of employment who are not protected by labour laws. The Committee requests the Government to provide additional explanations on the measures taken or planned with a view to extending the minimum wage coverage to domestic workers.

Article 5 and Part V of the report form. Enforcement measures – Application in practice. The Committee notes the statistical information provided by the Government, in particular the inspection results for the period 2007–11 which show a considerable increase in the number of infringements of the minimum wage legislation from 4,612 cases in 2007 to 14,718 cases in 2011. The Committee notes, however, that despite the significant increase of violations, judicial action has been taken in eight to ten cases, on the average, while the number of fines remained extremely limited in the same period.

In this connection, the Committee notes the comments of the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU) dated 12 June 2012, according to which although there are numerous cases of violation of the Minimum Wage Act, few sanctions have been reported, and therefore new measures to enhance compliance with the minimum wage legislation should be drawn up. In addition, the Committee notes that according to two labour surveys cited in the Government’s report, the share of workers paid less than the statutory minimum wage in 2011 was between 6.1 and 10.8 per cent of all workers.

Recalling the importance of an adequate system of inspection and truly dissuasive sanctions for the effective implementation of the Convention, the Committee requests the Government to provide up-to-date information on labour inspection activities and other enforcement measures aimed at ensuring compliance with minimum wage legislation. It also requests the Government to continue to provide information on the practical application of the Convention, including comparative statistics on the evolution of minimum pay rates and economic indicators such as the inflation rate, and copies of relevant reports or studies prepared to assist the Minimum Wage Council in its deliberations.

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Article 4(3)(b) of the Convention. Appointment of independent members of a minimum wage fixing body. The Committee notes the comments of the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU) dated 12 June 2012, and the Government’s reply dated 26 September 2012 concerning the application of the Convention.

According to the allegations of the FKTU and KCTU, the Government’s decision to appoint nine public interest members of the 9th Minimum Wage Council (MWC) unilaterally, without any consultations with labour and management organizations, violates the Convention, which calls for the appointment of independent persons after full consultation with representative organizations of employers and workers concerned, where such organizations exist and such consultation is in accordance with national law or practice.

The two workers’ organizations also indicate that although the Minimum Wage Act does not specify the procedure for recommending the public interest members of the Council, efforts were made up until 2008 to appoint the public interest members in a manner similar to that followed for the appointment of public interest members to the Economic and Social Development Commission (ESDC). According to the Act on Establishment and Operation of the ESDC, public interest members are appointed by the President following the recommendations of workers’ and employers’ organizations.

According to the FKTU and KCTU, the qualifications of the nine public interest members are crucial for minimum wage negotiations since they represent the neutral group between the labour and management sides, especially since recent wage negotiations have proven difficult. They also indicate that measures should be taken to diversify the profile of the nine public interest members since at present they are all professors from the same university. Finally, the FKTU and KCTU maintain that the MWC as a social agreement body independent of the Government should be composed and operated in a democratic way, and to this end, new draft legislation for the revision of the Minimum Wage Act has been submitted to the National Assembly.

In its reply, the Government draws attention to the provision of Article 4(3)(b) of the Convention, which requires consultations only to the extent that such consultations are prescribed by national law or established in practice. In this connection, it refers to the negotiating history of this provision which shows that an unqualified consultation requirement was a major concern for many countries and therefore the reference to national law or practice was introduced to provide flexibility. In the Government’s view, therefore, Article 4(3)(b) of the Convention cannot be construed as meaning that a member State is obliged to undertake full consultations with labour and management before appointing independent representatives, if such consultation is not specified by national law or does not exist in national practice. The Government accordingly states that consulting workers’ and employers’ organizations prior to the appointment of the public interest members of the MWC is not provided for in the Minimum Wage Act and it has never been part of national practice, and therefore the allegations of the FKTU and KCTU are grounded on an incorrect interpretation of Article 4(3)(b) of the Convention.

In addition, the Government describes the process of minimum wage negotiations within the MWC, and the role of public interest members as mediators seeking a compromise between the workers’ and employers’ proposals, which underscores the importance of professionalism and independence on their part. In the Government’s opinion, if workers’ and employers’ organizations had a right to recommend public interest members, the independence and impartiality of those members would be seriously undermined.

Finally, with regard to the proposed revision of the Minimum Wage Act according to which labour, management and the administration would select three public interest members each, the Government considers that this would be tantamount to having 12 workers’ members, 12 employers’ members and three public interest members of the Council thus tilting the balance of its tripartite composition.

The Committee takes due note of the comments of the FKTU and KCTU and of the Government’s response. The Committee observes that the Convention requires full consultations with representative employers’ and workers’ organizations prior to the appointment of independent experts to a minimum wage fixing body only where such consultations are either expressly provided for in national laws or regulations or clearly established in practice. This conclusion is also reflected in paragraph 222 of the 1992 General Survey on minimum wages while the same view was expressed in an informal opinion given by the Office in 1980 at the request of a country.

In addition, the Committee considers that under this Article of the Convention, specific competence and impartiality are key qualifications of the members representing the general interest of the country – a point that is also found in Paragraph 9 of the Minimum Wage Fixing Recommendation, 1970 (No. 135), which refers to “suitably qualified” and “independent” persons. Therefore, based on the Government’s explanations that consultations prior to the appointment of the public interest members are neither provided for in the minimum wage legislation nor established in practice, the Committee is of the view that the selection process and working method of the Minimum Wage Council are consistent with the requirements of Article 4(3)(b) of the Convention.

However, the Committee feels obliged to recall the fundamental importance of genuine and effective consultations with the social partners for the smooth operation of the minimum wage fixing process. The Committee trusts that in the interest of promoting constructive social dialogue, the Government and the social partners will engage in open and good faith discussions with a view to examining possible adjustments or improvements to the existing system of minimum wage negotiations in order to enhance efficiency, prevent conflict and build confidence.

In addition, the Committee is raising other points in a request addressed directly to the Government.

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The Committee notes the Government’s detailed report and attached documents. In particular, it notes the explanations concerning the protection of the minimum wage level in case of reduction of working hours under the Minimum Wage Act, as last revised on 31 May 2005. In addition, the Committee notes the newly inserted section 17(2) of the Rules for the Operation of the Minimum Wage Council, which provides that eventual withdrawal of employers’ or workers’ members from a Council meeting after a vote has been called for does not affect the quorum and consequently the voting procedure. Recalling that under Article 4(2) of the Convention, full consultations with representative organizations of employers and workers concerned must be held in connection with all aspects and at all stages of the establishment, operation and modification of the minimum wage fixing machinery, the Committee requests the Government to clarify whether employers’ and workers’ organizations concerned were duly consulted before the last revision of the Rules of the Minimum Wage Council.  

Articles 1 and 2 of the Convention. Scope of application and binding force of the minimum wage. The Committee notes with interest the Government’s explanations that following the last two revisions of the Minimum Wage Act, the full rate of the national minimum wage now applies to workers employed in all businesses or workplaces, including small enterprises with four workers or less, minors under 18 years of age, and workers undergoing vocational training, who were previously excluded from its scope. It also notes that the probation period during which workers may receive 90 per cent of the full minimum wage rate has been reduced from six to three months. It further notes that exemptions for persons with remarkably low ability for work due to mental or physical handicap are permitted only upon prior authorization from the Ministry of Labour for a specified period not exceeding one year. However, under section 7 of the Minimum Wage Act, other persons to whom it is deemed inappropriate to apply the minimum wage may also be exempted from the binding force of the minimum pay rate. The Committee would appreciate receiving additional explanations as to the categories and approximate number of workers who may have been excluded from the coverage of minimum wage legislation on the basis of that provision. It also requests the Government to explain how minimum income level protection is ensured for domestic workers who continue to be excluded from the scope of application of the Minimum Wage Act.

Article 5 and Part V of the report form. The Committee notes the Official Notice No. 2006-21 of the Ministry of Labour setting the national minimum wage rate at 3,480 won (approximately US$3.7) per hour as from 1 January 2007. The Committee understands that the minimum wage has been further increased and now stands at 3,770 won (approximately US$4) per hour. It also notes the results of the survey conducted by the Minimum Wage Council in November 2006 concerning the cost of living for unmarried workers under the age of 29, which indicates that the overall living cost is well above the current level of the national minimum wage. It further notes the labour inspection results for the period 2004–06 with regard to the minimum wage, showing the number of workplaces inspected, workers concerned, violations reported and cases referred to the administrative or judicial authorities. The Committee would be grateful if the Government would continue to supply up to date and documented information including, for example, statistical information showing the evolution of the national minimum wage rate in recent years compared to the evolution of economic indicators, such as the inflation rate over the same period, the approximate number of workers paid at the minimum wage level, extracts from reports of the inspection services, copies of official documents or studies addressing issues dealt with in the Convention, etc.

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The Committee understands that the Minimum Wage Act was revised in May 2005. As the text of the revised Act is not available at the Office, the Committee would appreciate receiving a copy.

The Committee understands that the national minimum wage was last modified in August 2006 and is now set at 3,480 won per hour (around US$3.63). The new minimum pay rate represents a 12.3 per cent increase from last year and is expected to benefit almost 1.8 million workers, or approximately 12 per cent of the total workforce. The Committee requests the Government to transmit a copy of the legal text establishing the new minimum wage and also to provide full particulars on the process of tripartite consultations held prior to its determination. The Committee notes the Government’s indication in its communication dated 24 May 2006 that workers’ minimum remuneration is protected in case employers reduce working hours from 44 to 40 hours per week and asks the Government to provide details of how this protection will be ensured.

Further, the Committee asks the Government to reply to certain points raised in its previous comment concerning the application of Article 1 (scope of application of the Minimum Wage Act, exclusion of domestic workers and workers of small enterprises employing four persons or less), Article 2 (sub-minimum rates for young workers under 18 years of age, mentally or physically handicapped, workers on probation and workers undergoing vocational training), and Article 5 (general information including labour inspection results, surveys and studies undertaken by the Minimum Wage Council, relevant statistics, etc.) of the Convention.

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The Committee notes the comments of the International Confederation of Free Trade Unions (ICFTU) dated 6 September 2005 alleging formal and material breaches of the minimum wage legislation by the Government.

According to the ICFTU, the minimum wage rates announced on 8 July 2005 to be applicable as from September 2005 were adopted at the Minimum Wage Council’s meeting of 29 June 2005 despite the absence of all nine worker members. The ICFTU indicates that the workers’ representatives left the meeting because of heavy police presence monitoring the council’s discussions and creating a threatening environment totally inappropriate for tripartite consultations. The decision taken with only the presence of seven government representatives and nine employer members was thus in contravention of quorum rules and, more concretely, section 17(4) of the Minimum Wage Act which requires the presence of at least one-third of the workers’ and employers’ members, respectively for a valid decision, unless these members fail to attend without justifiable reasons even after having been given two or more summon notices. Moreover, the ICFTU considers the minimum wage-fixing decision to be objectionable because it was based solely on economic parameters with no consideration for social conditions, such as the negative repercussions of the adoption of the 40-hour workweek on the livelihoods of minimum wage earners.

In its reply, dated 24 May 2006, the Government explains that the worker members of the Minimum Wage Council walked out after a vote had been called, thus voluntarily giving up their right to vote, and therefore the decision was valid and lawful in accordance with the administrative practices set out in the Minimum Wage Act and followed by the Minimum Wage Council. It also indicates that police forces were present outside the meeting room, simply on standby, as some members of the Korean Confederation of Trade Unions (KCTU) had illegally occupied the meeting room the previous day and caused the suspension of the council’s meeting. As regards the criteria taken into consideration for the periodical adjustment of minimum wage rates, the Government specifies that the wage of workers remunerated at the minimum wage rate will not be reduced even if the weekly working hours are shortened from 44 to 40 hours because their wage level will be maintained under the revised Minimum Wage Act of May 2005. The Government adds that the minimum wage applies to all workers, whether regular or non-regular (including part-time workers), in enterprises with one or more workers, and also that various allowances such as the overtime work allowance are not included in the minimum wage.

The Committee recalls that direct, genuine and effective consultations with the social partners on an equal footing constitute the very essence of the Convention. The Committee also recalls that the ILO Committee on Freedom of Association has emphasized on numerous occasions the importance it attaches to the obligation to negotiate in good faith for the maintenance of the harmonious development of labour relations. The Committee therefore expresses the hope that the Government will make every effort to restore a non-conflictual climate within the Minimum Wage Council based on trust, full respect for social dialogue and strict application of standing rules and procedures. It also expects the social partners to exercise their rights and pursue their legitimate objectives within institutional limits in the interest of best serving those most in need of minimum wage protection.

The Committee is raising other points in a request addressed directly to the Government.

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The Committee notes the observations of the International Confederation of Free Trade Unions (ICFTU) dated 6 September 2005, concerning the application of the Convention. In its comments, the ICFTU alleges that the decision of the Minimum Wage Council (MWC) of 29 June 2005 on the new minimum wage was taken in formal and material breach of the Minimum Wage Act and considers that the Government has failed to ensure conditions of real consultations and equitable representation of workers’ and employers’ interests in the operation of the minimum wage-fixing machinery. The Committee asks the Government to transmit its reply to the ICFTU’s comments so that it may examine these points at its next meeting.

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The Committee notes with interest the Government’s first report and the attached documentation.

Article 1, paragraphs 2 and 3, of the Convention. The Committee notes that, according to section 3(1) of the Minimum Wage Act No. 3927 of 31 December 1986 as amended, this Act does not apply to any business using only relatives living together and to those hired for household work. Moreover, under section 3 of Presidential Decree No. 12207 of 1 July 1987 on the enforcement of the Minimum Wage Act, businesses which ordinarily employ four workers or less are also excluded from the scope of application of the Minimum Wage Act. The Committee requests the Government to specify the reasons for such exclusions and also to indicate whether the representative organizations of employers and workers concerned have been in agreement, or have been fully consulted, in this respect. The Committee also asks the Government to provide, in its next report, supplementary information on the approximate number of workers who are currently left outside the coverage of the Minimum Wage Act and on the manner in which minimum wage rates are fixed for domestic workers and workers of small enterprises employing four persons or less.

Article 2, paragraph 1. The Committee notes that, by virtue of section 5(2) of the Minimum Wage Act and section 3 of the above referenced Presidential Decree, young workers under 18 years of age and whose employment period does not exceed six months may be remunerated at a minimum hourly rate which is 10 per cent lower than the minimum hourly rate applicable to adult workers. The Committee also notes that under section 7 of the Minimum Wage Act and section 6 of the Presidential Decree, the principle of the binding force of minimum wages does not apply to mentally or physically handicapped workers, workers on probation, or workers undergoing vocational training. In this connection, the Committee recalls that, although the Convention does not prohibit the possibility of fixing different minimum wage rates on the basis of criteria such as age or disability, special attention should be given to the principle of equal remuneration for work of equal value, bearing in mind that the quantity and quality of work carried out should be the decisive factors in determining the wage paid.

Article 5 and Part V of the report form. The Committee notes the statistical information concerning the number of workers covered by the minimum wage and the minimum hourly, daily and monthly wage rates currently in force. The Committee would appreciate receiving additional information on the application of the Convention in practice, including for instance: (i) extracts from reports of inspection services indicating the number of visits and the results obtained (e.g., infringements observed and sanctions imposed) with regard to the matters dealt with in the Convention; (ii) copies of official surveys and studies on minimum wage issues, such as the annual surveys on workers’ living expenses and wage conditions undertaken by the Minimum Wage Council, pursuant to section 23 of the Minimum Wage Act; (iii) available statistics on the evolution of the minimum wage and on the number and different categories of workers covered by minimum wage legislation; and (iv) the classification of professional categories established for the purpose of determining minimum wage rates, as well as any other particulars bearing on the operation of the minimum wage fixing machinery.