A small-medium enterprise (SME) is defined by its number of permanent workers, assets, sales, etc. and by the specifications of its industry. If it meets the requirements and standards as stipulated in the Enforcement Decree of the Framework Act on Small and Medium Enterprises, it is eligible to receive benefits regarding the promotion of SMEs.
Requirements stipulated in the Enforcement Decree of the Framework Act on Small and Medium

However, exceptions are made in the following cases:
– Companies with over 1,000 permanent workers;
– Corporations with over KRW 500 billion in total assets (referring to the total assets in
the balance sheet of the last day
of the most recent business year) pursuant to Art. 2 of the Security Transactions Act.

According to the present law, even a foreign-invested company with a foreign investment of 100% is. just like a Korean company, also eligible for government grants.

According to the amendment made on September 15, 2003, the paid monthly menstrual leave for women was changed to unpaid leave when applied for.
The implementation of the amended law commenced on July 1, 2004 for businesses with more than 1,000 employees and will be expanded to other businesses over the years in stages.

For about three years since 1987, Korea experienced intense labor disputes, but it has learned from the experience that both parties cannot get any actual gains from immature strikes and disputes.
Since the 1990s, the number of labor disputes has steadily decreased. However, after the financial crisis of 1998, disputes occurred frequently due to the restructuring processes of many companies. The disputes were related to the preservation of employment and wages or increase thereof. This trend continued until 2001, when the disputes started to decrease.
Recently, the number of illegal disputes has started to decrease, and instead, more and more labor activities are within lawful boundaries.
The Korean government is trying to reduce the occurrence of labor disputes by establishing a permanent Tripartite Commission, which allows discussion and participation of all parties. It also expects the Korean people to form a national bond as a result of overcoming the financial crisis, which would also lead to maintaining stable and peaceful labor-management relations.

Before 1998, most of the disputes were about wage increases and collective agreements.
But recently, the majority of the disputes deal with job security in connection with restructuring.
Concerning the resolution of the disputes, there is an increase of resolutions resulting from autonomous bargaining
The government ensures autonomous bargaining between the labor and management in terms of wage and collective bargaining
Objective date and information needed for the bargaining are quickly provided, but if the dissenting opinions persist, the Labor Relations Commissions will help to find a quick solution to the problem through mediation.

The system of unjust labor action was established to ensure the workers are guaranteed certain rights and prevent the employer from infringing on the workers? rights to solidarity.
Prescribing irrational activities of the labor union as unjust labor actions is said to be unconstitutional.
It is nevertheless possible to sanction irrational labor activities as unjust labor action according to the present laws through a government order, if any rules, resolution, measures or collective agreements violate the Labor Relations Act.
Even if the employer rejects an unjust bargaining demand made by the labor union during wage or collective bargaining, it will not be accepted as an unjust labor action.

The clause prohibiting industrial action outside the business location was abolished, because business facilities were often occupied by the striking workers.
In order to minimize damage within the business location, the following rules have to be complied with:

• Occupation of facilities for production is prohibited;
• normal operation will continue during the period of industrial action to avoid damage of facilities and deterioration or decay of
raw material;
• industrial action obstructing the entrance or operation of work is prohibited;
• encouragement to participate in industrial action has to be done in a peaceful manner.
• The problem of replacing workers during the period of industrial action has to be viewed both from the perspective of the employer (right to operate business) and the labor union (right to industrial action).
• If the employer allowed the replacement of workers participating in the industrial action, although there are also the options of closing the work place, no payment during strike action or using other workers not participating in the industrial action for the business operations, there would be a danger of destroying the basic principle of labor-management relations, namely “maintaining a balance of bargaining power.”

The system of flexible working hours has the objective to increase the competitiveness of the company (productivity) as well as improve the quality of life of the worker (more vacation leave) at the same time through an efficient distribution of working hours.
Since this system is based on the employment regulations of the company or the agreement between management and labor, the worker has to be able to predict the working hours.
If this system shall be applied also to working hours that were not planned, the worker would not be able to predict when to work and not, so that the regular life pattern would be disrupted. This would also lead to difficulties in terms of health and cultural life of the worker.
Accordingly, applying the system of flexible working hours to unplanned overtime work is not possible.

The wage system in Korea is based on an average wage and ordinary wage. The average wage is the basis for calculating severance pay and remuneration for accidents, whereas the ordinary wage is used for calculating additional allowances such as overtime payments.
In order to simplify the wage system, the dual system of average wage and ordinary wage should be changed to a simplified system of a standard wage.
The elements to be included in a standard wage would be of much interest for both the labor and management, so that much time will be needed to gather opinions from both parties, as well as academic circles, before reaching any final conclusions.

The Labor Standards Act stipulates that besides wages, additional labor costs are severance pay, official holidays and paid annual leave.The severance pay decided by law is an imported system to guarantee the existence of the worker due to the low level of social welfare in Korea.

• A unilateral abolishment of the system would face opposition from the workers and citizens, and in the current situation of high unemployment it could also trigger labor unrest. It is necessary for the company to make use of the mid-term settlement of severance pay or the severance pension system introduced in 1997, if it wants a more flexible management.
• The contribution paid by the company is around 5.3% and is thus not a great burden. This system is also implemented in most companies in Japan through employment regulations.
• The level of paid annual leave is not so high compared to other countries. Payment for unused paid annual leave might be a burden on the company, but workers can be encouraged to make use of their leave, if the company wants to save the expenses.