Case Study: South Korea

Case Study: South Korea

All governments provide a diverse set of regulations controlling operations of both local and foreign investors. It is, therefore, critical for Chapman Company to understand the current labour market in terms of its costs and legal obligations as provided in the South Korean laws. Furthermore, the rules are adjusted to meet the ‘International Labor Organization’ (ILO) declaration, which South Korea adopted on March 3, 1997.

The ILO declaration provides freedom of operation, the abolition of forced labour and the absolute prohibition of child labour. Essentially, the resolution gives local and foreign companies equal protections and opportunities to operate and share the critical labour market (Natflex,  2014). Therefore, through this provision, Chapman Company has the legal rights to work in South Korea free from all forms of discriminations. Also, the company has equal bargaining rights through which the company can negotiate for affordable and cheap labour as enforced in article 9, which prohibits all forms of labour brokerage.

Importantly, the South Korean government has provided an elaborate age schedule for eligible employees. The government submits that persons with 15 years and above are eligible for employment so long as there is a justifiable proof of the age and consent from an official guardian (Natflex, 2014). Consequently, the labour force is significantly expanded, making it possible for Chapman Company to access a large pool of labour and also, appropriate age for apprenticeship programs.

Although the South Korean government provides for equal employment for both males and females in article 6, the labour laws provide that ladies 18 years and above are entitled to one-day menstrual leave in a month. Also, the law states that women employees should be given sixty days of maternity leave. Besides, the law provides that all public holidays are payable. Such provisions tend to add on the overall cost of labour

Moreover, in 2018, the South Korean legislature ratified a bill to the cut of working hours from sixty-eight to fifty-two hours a week. Besides, this was one of the agendas in President Moon Jae-in’s campaign manifesto as a means to improve lifestyle and create more employment opportunities (Ja-young, 2018). Also, the legislature has provided a clear timeline for implementation of the new labour law where Companies hiring more than 300 workers should implement the law by July 2020 while small business with less than 50 workers to implement it in July 2021.

However, the law could elevate the costs of labour, affecting mainly medium and small sized businesses. A reduction in working hours would mean an increase in the price of work-force from two dimensions (Ja-young, 20018). The first dimension arises where it would necessitate hiring many workers to cover the shifts in the intensive production process, especially for Chapman Company. Also, labour per person per hour will increase, making it expensive to hire a worker for many hours. Therefore, this poses an adverse effect on Chapman’s plans to diversify operations in South Korea.

In conclusion, Chapman Company should strategize on the appropriate approach of acquiring labour to overcome the increase in the cost of labour. Moreover, since the government qualifies persons from 15 years and above as eligible for working, Chapman Company has a bigger pool of labour force to hire. Also, the company should capitalize on the right to negotiate and agree with workers on suitable wage rates where both the company and the employees will benefit.

References

Ja-young, Y. (2018). Weekly Working Hours to be cut to 52 from 68 from July; The Korean Times, February 27, 2018, Retrieved December 16, 2019, from

http://www.koreatimes.co.kr/www/biz/2018/02/602_244849.html

Natflex Database, (2014).  Korea, Republic of – Labor Standards Act (Law No. 5309). – ILO Retrieved December 2019 from https://www.ilo.org/dyn/natlex/natlex4.detail%3Fp_lang%3Den%26p_isn%3D46401