Employers, labor activists clash over Supreme Court overtime ruling

A new Supreme Court ruling stipulates that work hours, under the Labor Standards Act, should be calculated per week rather than per day, with large implications for overtime calculations and workers' rights.

A job notice posted at an employment center in Jung District, central Seoul [NEWS1]

A court ruling allowing for a flexible adoption of the 52-hour workweek has sparked contentious debate between laborers and employers.

The current Labor Standards Act stipulates that working hours cannot exceed 40 hours per week and eight hours per day, excluding breaks. A worker can also perform up to 12 hours of overtime work per week if both participating parties agree.

Supreme Court Justice Min You-sook overturned a lower court’s ruling imposing a fine on the CEO of an aircraft cabin-cleaning company for violating the Labor Standards Act, sources in the legal industry said Monday.

That ruling had indicated that working hours should be calculated per week, irrespective of the number worked on any given day. It contradicted the Ministry of Employment and Labor's interpretation of the law, which stipulated that any hours worked beyond the first eight of a given day should be considered overtime.

The Labor Ministry's explanatory report for the Labor Standards Act, which was published in May of 2018, states that it is “against the law” for a laborer to work 15 hours a day over a period of three days and zero on the remaining two, even though the total sum of 45 hours would fall under the 52-hour limit.

The worker in question, per the Ministry, would have performed seven hours of overtime each day, exceeding the legal cap of 12 hours per week. The worker would only have logged five hours of overtime, however, under the Supreme Court's weekly interpretation, and would thus be within the law.

The Labor Ministry has been left perplexed. Supervisors at regional employment and labor administrations have so far dealt with working hour-violation cases in line with the Labor Ministry’s interpretation. The Supreme court’s ruling means that different standards must now be applied.

“As this was an administrative interpretation of overtime working hours maintained even before the 52-hour workweek was implemented, we are looking into ways on how we will change it,” said a Labor Ministry insider. “In the case of shift workers [such as in the example above], should employers abuse [the situation], they could be disadvantaged, such as in having longer overtime working hours. We are therefore in plans to make revisions after hearing the opinions of experts and on-site labor unions,” the source added.

Legal circles see the ruling as fitting of the current Labor Standards Act.

“As the 40-hour workweek is the first principle of working hour regulations under the Labor Standards Act, the Supreme Court’s ruling that [overtime] should be assessed based on guidelines [defining it as] ‘working hours that exceed 40 hours in a week’ is accurate,” said Park Ji-soon, dean of Korea University’s Graduate School of Labor Studies.

“As it is an issue related to criminal punishment, it is especially important that it is interpreted in line with the principle of ‘no crime without law,’” added Park.

Business circles also view the ruling in a positive light.

“Companies operating shifts were experiencing practical difficulties, so the ruling is expected to give some breathing room,” said Yoo Il-ho, team leader of employment and labor policies at the Korea Chamber of Commerce and Industry. “Companies will secure [legal] flexibility regarding issues of liability for overtime work, while workers will have no loss in terms of income, as the overtime pay will remain the same.”

Yet there has been opposition among labor activists who argue that the ruling could enable employers to require excessive labor over a concentrated span of time.

The Korean Confederation of Trade Unions published a statement on Monday saying that the ruling “overshadows the purpose of setting eight hours a day as legal working hours and is contrary to the method of calculating overtime pay that has been established in the field.”

“The ruling is behind the times and has caused unnecessary confusion,” the confederation added.

BY NA SANG-HYEON, KO SUK-HYUN, KIM JU-YEON [kim.juyeon2@joongang.co.kr]