Pace of 'Mega Special Zone Act' with anti-labor controversy to slow down; Ministry of Trade, Industry and Energy to 'gather labor opinions, supplement regulations'

The South Korean government is slowing down the legislative process for the "Mega Special Zone Act" following significant controversy surrounding its labor provisions. The bill, which initially aimed to boost regional semiconductor industries, included measures that drew strong criticism from labor unions and advocacy groups.

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We have changed our approach to proceed after fully coordinating labor-related issues, rather than setting a deadline.

Key points of contention in the draft legislation included extending the maximum duration for fixed-term employment contracts from the current two years to four years. Additionally, it proposed exempting research and development personnel from the 52-hour weekly work limit, allowing for more flexible working hours.

The Ministry of Trade, Industry and Energy (MOTIE) announced that it will now engage in further consultations with the Ministry of Employment and Labor and actively collect opinions from various labor organizations. This revised approach signifies a shift from the original plan to submit the bill in early August, indicating a commitment to addressing the concerns raised.

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Increasing working hours does not indefinitely increase productivity. There are many studies showing that long working hours, which break down the barrier of the 52-hour workweek, decrease productivity in the long run by increasing turnover rates.

Critics, including labor activists, argue that extending fixed-term contracts could lead to easier workforce reductions for companies in cyclical industries like semiconductors. They also express concern that loosening the 52-hour workweek could result in excessive working hours, potentially increasing turnover and decreasing long-term productivity, contrary to the intended benefits.

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Extending the period of fixed-term employment is a demand from companies in industries with large economic fluctuations like semiconductors, so they can easily reduce personnel when needed. If the extension of fixed-term periods is implemented in the Mega Special Zone Act, it will spread to other fields in an instant.