Reversal of 'Labor-Respecting' Stance? Mega Zone Bill Accommodates Business Demands Blocked by Past Governments

The South Korean government is facing criticism for its "Mega Zone Special Act" proposal, which reportedly incorporates several demands long sought by the business community. These include extending the maximum employment period for fixed-term workers from two to four years and excluding research and development (R&D) personnel from the 52-hour workweek limit. These measures, previously stalled due to labor opposition even under conservative administrations, are viewed by many as a contradiction to the current administration's stated commitment to a "labor-respecting society."

“

The provisions included in the bill are ones that even conservative governments could not push through.

The special act is intended to support the government's key policies for advanced industries and balanced regional development, such as the "3 mega projects" and "5 hubs, 3 special autonomous regions." Designated "mega zones" would benefit from deregulation, financial support, tax incentives, and R&D and talent development programs. However, the draft legislation, spearheaded by the Ministry of Economy and Finance and the Ministry of Trade, Industry and Energy, includes provisions that have historically been points of contention.

One major concern is the proposed extension of fixed-term contracts to four years. The "Act on the Protection of Fixed-Term and Part-Time Workers," enacted in 2006, established a two-year limit to prevent the abuse of non-regular employment, stipulating that employment beyond two years should be converted to regular status. Business groups have consistently pushed for an extension, and President Lee Jae-myung himself has previously suggested the need for such an expansion, arguing the current limit effectively prohibits employment beyond two years. Labor unions interpret this as a move to test the waters for a broader policy change, starting with the mega zones.

“

The extension of the contract period for fixed-term workers from the current two years to four years is a representative example of policies that were repeatedly shelved due to concerns about labor market side effects.

Furthermore, allowing R&D personnel to work beyond the 52-hour weekly limit through a relaxed selective work hour system is also controversial. While the selective work hour system allows for flexible scheduling, the current draft proposes extending the period for R&D work from three months to six months within the mega zones. This policy mirrors a similar initiative under the previous Yoon Suk-yeol administration that was halted due to concerns about promoting excessive long working hours. South Korea already has one of the longest average working hours among OECD countries, and critics fear this could further exacerbate the issue, particularly in interconnected industries like semiconductors.

“

It is interpreted as an attempt to try it out in the mega zones first since implementing it broadly would be burdensome. It is favorable only to employers, not to labor respect.

Experts express concern that these "mega zone" special provisions could deepen labor market polarization, potentially benefiting large corporations and their suppliers while disadvantaging workers. They emphasize the need for thorough discussion and careful consideration, arguing that regulatory exceptions should not come at the cost of deteriorating labor conditions.

“

Allowing long working hours beyond 52 hours per week by applying the selective work hour system to research and development personnel is also a point of controversy.