Amendments Break Down Prohibited Areas of Discriminatory Treatment Against Non-Regular Workers into Wages, Regular Bonuses, Performance-Based Incentives, and Miscellaneous Benefits

On March 22, 2013, the Amendment to the Act on the Protection of Fixed-Term and Part-Time Employees (the “Act on Fixed-Term Employment”) and the Amendment to the Act on the Protection of Dispatched Workers (the “Dispatched Workers Act”) were promulgated (collectively, the “Amendments”). The Amendments define the areas in which fixed-term and part-time employees, and dispatched workers (collectively, “Non-Regular Workers”), may not be treated disadvantageously without reasonable grounds (“discriminatory treatment”), as follows: (a) wages, as defined in Article 2(1)(v) of the Labor Standards Act; (b) bonuses paid on a regular basis, such as periodic bonuses and holiday bonuses; (c) performance-based incentives based on business performance; and (d) other employment conditions and benefits. The Amendments take effect on September 23, 2013.

There have been ongoing controversies over regular bonuses and performance-based incentives paid to Non-Regular Workers since the current Act on Fixed-Term Employment and the Dispatched Workers Act comprehensively define the prohibited areas of discriminatory treatment as “wages and other employment conditions.” However, since the Amendments legislatively resolved such controversies, employers are in principle prohibited from the discriminatory treatment of Non-Regular Workers, in terms of the payment of regular bonuses and performance-based incentives, among other things, solely on the grounds of their status, compared to regular employees working in the same or similar field in the same workplace.

It is advisable for companies to bear in mind that non-payment or discriminatory payment to Non-Regular Workers in comparison to regular employees working in the same or similar field, without reasonable grounds, could result in a corrective order issued by the Minister of Employment and Labor and the filing of a request for correction by the relevant worker with the Labor Relations Commission.