Report
| Study on the Equal Pay Law in Korea | |||
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| Type | Basic | Period | 2023 |
| Manager | Miyoung Gu | Date | 2023-12-29 |
| Fiie | 13_성별 임금격차 해소를 위한 동일가치노동 동일임금 원칙 판단기준 연구.pdf ( 1.62 MB ) | ||
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Abstract Study on the Equal Pay Law in Korea Miyoung Gu Kitaek Jeon Hyejeong Lee Da-Eun Jung
Ⅰ. Introduction ○The legal provision for equal pay for equal value work was stipulated in the former Equal Employment Opportunity And Work-family Balance Assistance Act in 1989; however, it is so hard to find cases of it that it can be said as non-performing and not valid.
○Research objectives -To establish the significance and status of the logic of equal pay for equal value work as a general principle of labor law -To put forth major issues and improvement measures to establish specific criteria for equal pay for equal value work that can be utilized in the relief procedures of wage discrimination and wage disclosure systems in relation to gender equality -To propose the need for policy and institutional improvement for the effective application of the principle of equal pay for equal value work ○Research details -Review the meaning of the principle of equal pay for equal value work in the Labor Act -Establish the criteria for judging equal pay for equal value work: centering on major issues -Examine foreign countries’ criteria for equal pay for equal value work -Gender-sensitive methodology to evaluate and compare job evaluations ○Research method -Literature review -Analysis of decisions and legal cases -Study on the tool and practical usage of gender-sensitive job evaluation -Hosting of expert forum -Interview with female workers and legal experts
Ⅱ. The meaning and issue of the principle of equal pay for equal value work ○Normative basis
Ⅲ. Review of disputed cases 1. Case of Hyosung Co., Ltd. A. Overview and main issues ■ Facts The defendant is a synthetic fiber producer and has a production process of polymerization, where nylon chips are made from caprolactam; spinning, where filament is made from nylon chips; winding, where filament is coiled; twisting, where two lines of filament area wheeled to be one; and weaving, where yarn is made of wheeled filament. Employees working at Ulsan factory of Hyosung were largely divided into two groups, those employed for production or for function, and were given different salary systems. As of December 21, 2005, those hired for production were paid with from KRW 19,100, the lowest band, to KRW 29,640, the highest band. In the meantime, those for function were from KRW 24,220, the lowest band, to KRW 50,530, the highest band. Production site workers, all women, were given smaller paycheck than functional workers, all men. The headcount of the factory was 738: 176, administration, 548, function, and 18, production. Placement of all of those worked for function was operated on a rotational basis to the total production processes. However, production staff was sent only to a few processes, including weaving and twisting (re)winding.
■Main issue: Appropriateness of selecting the object of comparison Is the evaluation on equal work value appropriate? Can placement discrimination be considered at the time of determining wage gender discrimination?
■ Gist of court rulings Object of comparison: Comparison on labor can determine whether jobs done by male and female employees have equal value or not. Korea’s equal employment act provides that the scope of comparison for equal value work should be within a same workplace. Regarding Hyosung case, male employees working for functions were placed on a rotation basis to polymerization, spinning, winding, twisting and weaving, while female for productions were to weaving and twisting rewinding. This fact makes their labor is an object of the evaluation on equal work value, and the weaving and the spinning at which the plaintiffs were working with functional male employees should not be the only processes for comparison. Methodology of determining equal work value: Works vary depending on production process, so the work value of each process is hard to strictly appraise. This condition makes it inevitable to understand overall scope of work of each process and compare the spectrum of work value evaluation.
Skills: Related parties of this case do not seem to have an argument over the uniqueness of the labor of functional workers who are stationed in the process of polymerization and spinning, in that it requires long training periods and special job performance, which is evidently different from the plaintiffs’ weaving and twisting rewinding. Yet, the plaintiffs pointed out the fact that the company did not require, at the time of hiring functional employees, specific qualifications, including of education, and those men working in the spinning section earned job skills by engaging in it for long periods, arguing that work difference was not a critical element as they themselves were not placed in those functional positions and thus failed to secure such hands-on job skills. Even though that the way that male workers in the two functional processes picked up their skills was true with what the plaintiffs said, it is another matter to judge whether their job skills have same value with those of men’s. Although the skill level of those working for function and for production in the section of twisting rewinding and twisting is equal with that of those in the section of weaving, it is hard to say that this is evidence that proves their overall job skills are equal and same. Intensity of labor: To speak on the intensity of labor, men are stronger than women, so a simple fact of male employees providing more intense service than female ones does not justify that men’s labor intensity is higher than women’s. Only when male employees delivered significantly higher level of labor intensity than average, their labor can be counted as having greater value work. From this perspective, unloading, backward moving, support, weft box transportation, and other works of functional employees of the weaving section cannot be viewed as significantly intensive, even if all of them were done proactively and efficiently. Also, skein transportation and winding machine management of the functional workers in the winding section cannot be judged as more intensive jobs than yarn defect inspection of those workers of production. In addition, functional workers’ loading and doping units of 10 kilogram skein and managing twisting machines in the twisting process cannot be said as more demanding than production workers’ managing rewinding machines that process relatively light-weighted skein. However, filter cleaning in the polymerization and filter transportation, raw material insertion, nozzle wiping, and others in the spinning require high-level intensity of labor for workers have to continuously move heavy-weighted machines in operation at high temperatures, which makes those types of works are significantly higher in their labor intensity compared with others. So, intensity of labor at the plaintiffs’ company cannot be said of having equal work value as a whole among functional employees and their production counterparts. Responsibility: In the twisting process, each functional employee manages 120 spinners and produces daily 120 units of skein, while each production employee works with dissected raw materials, which are produced in the twisting process all the time, on rewinding machines and produces 15 units of skein. The feature, scope, complexity, and level of the employer’s dependence on functional employees can place a greater responsibility on them than on production employees. Furthermore, functional workers take the leader role and responsibility in their nightly work shift that lasts from 5:10 pm to 8:40 am, next morning, dealing with and reporting abnormalities that would happen during their shift in the process of weaving. This is not what production workers assume, making a clear difference in accountability. Even though burdens of responsibilities of production workers who inspect raw material defects in the winding process and functional workers who manage winding machine are viewed as similar, it is hard to tell that the overall responsibility level of functional employees is on par with that of production ones. Working conditions: Overall, the workplace is very noisy and at high temperatures. To be specific, the temperatures of polymerization, spinning and twisting processes, all of which require high temperature for operating machines, are higher than 40℃, with the noise of winding process, the noisiest section, being higher than 100dB. The place for inspecting raw material defects displays 27℃, the coolest, and the rewinding in the twisting process exhibits 30℃, lower more than 10℃ than the twisting site. Therefore, even if working conditions for functional and production employees in the weaving section are same, it is hard to say that overall working environments of those two groups are the same with each other.
B. Evaluation Regarding the method of determining equal work value, the court decision employed a “spectrum,” which deemed strange as it did not elaborate on this term. As “works vary depending on process, so it is never easy to strictly compare and decide work value required in accordance with different processes,” it is necessary to identify the range of works of each process and compare and decide the spectrum. Considering this, the methodology seems to be a non-analytical one, not an analytical one, including factor comparison method or point rating method. To interpret the sentence, “it is never easy to strictly evaluate labor value or work value,” it would mean that how much details of each of the four factors meet the requirement of equal work value is the determinant. Indeed, the court rulings conducted non-analytical methods for the evaluation of equal work value as was done on TDK Korea and other gender-discrimination cases. But, the rulings have limitations in that they failed to follow basic principles that the four factors should be appraised on works, not on workers. In determining job skills, it was acknowledged that skills and qualifications for functional and production workers were the same; however, it determined that there is difference in details of skills. Evidence for this stance is that the accumulated skills that functional male employees earned while working in polymerization, spinning, and others were distinctive from those of production female. Yet, this method was wrongfully applied in that work value appraisal should take into account the four factors, including those skills required for related jobs, not personal elements of those in charge. Adding to this, the court rulings cited as evidence the fact that functional workers play a leader role; however, this is not appropriate as such role is not an essential factor for serving in functional positions. The core issue in relation to the court rulings is how to set up comparison objects for evaluating equal work value. The employer’s side claimed that winding and polymerization among the total five are physically demanding processes, so they considered the value of labor and therefore paid higher wages to those functional employees placed in the two sections. As a response, the plaintiffs’ side pointed out the facts that only a few of functional workers were actually working on winding and polymerization and some of them who only worked at spinning and weaving had received greater wages than those production workers. As a matter of fact, some functional workers who had been engaged only in spinning and weaving for 15 years since their employment received equal salary with other functional workers. Putting their basis on this fact, the plaintiffs argued that those functional workers who do not work for winding and polymerization should be the object of comparison for them.
The weaving process was all mixed up. A total of 17 were working in the section, and Shift No. 1 was composed of five male and two female workers. Each of them was to weave on his/her machine. When I first met them, they were receiving de-facto minimum wages. Female employees could not believe that their paychecks were almost at the level of minimum wage, even though they worked as a regular worker at locally-famed large company. I myself could not believe that I encountered this gender-based different wage system in reality, a textbook example that I met as existed only in the old banking industry while I was studying to become a labor attorney. (Legal counsel 2)
It seems to me that judges considered not the uniqueness of our working conditions but overall workplace environment the male workers belonged to. We work with men in our production section but our wage system is problematic. Male employees are on the salary system designed for functional workers, while female ones on the production workers’ salary system, even though we are doing the same work as men do. Judges seem to think that male employees are functional workers as they were placed on rotation to all five production processes, even if they perform the same work with female counterparts. I do not understand how they can say male workers are different from female when male and female workers are working in a same department and on shared machines. (Female worker 8)
The court rulings excluded the plaintiffs’ argument, by accepting as valid the company’s rotational placement that can put functional workers to all production processes. Put different, some of functional employees, those working at spinning and weaving, should not be an object of work value comparison. Short explanation of the rulings does not clearly state why the total of functional workers should be an object of the comparison, even though this is not provided in the Korea’s equal employment act. But still it can be assumed that highlighted portions of the legal explanation say that functional workers performing equal value work cannot be separated for other comparison. The court, however, misconstrued Article 8 of the equal employment act in that they mixed the selection of objects for comparison and the issue of work value comparison. To judge on the intention and language of Article 8, if those jobs largely done by females and those by males exist within a single workplace, they can be an object of work value comparison. Whether the works or positions chosen by employees as comparison objects ave equal value or not shall be determined in the next phase. Behind the rulings can be the perception that the object of comparison should be based on the job classification system that employers put to use. But, it is doubtful where we can find normative reference for practice on the perspective. This case, as well, is noteworthy as gender discriminatory placement is a structural cause for wage discrimination. It can be understood as gender placement discrimination that newly-hired female employees were placed to different production processes and job positions than their male counterparts were, even if they had equal level of education and career with men. In a sense, this can be an irony as it acknowledges and accepts distinctive gender wage gap.
Basically, the company classified production positions and function ones depending on job. It analyzed jobs and categorized those which require more strength, greater responsibility, poor working conditions, and dangerous processes as functional works. Those works that did not fall into the category were grouped as production works. The company explained that it did not have the principle of “functions for men and productions for women.” As production positions provided very small paychecks, most male workers wanted to work at functional positions. Yet female workers avoided handling heavy items and thus made their way to production positions. Hyosung said that it did not make blanket gender separation in the first place. (Legal counsel 2)
A. Issues derived from disputed cases -These issues are follows: ○Job evaluation methodology -Application of analytical job evaluation method and tool -Job evaluation that includes personal elements ○Gender-neutral job evaluation ○Phases of comparison object and judgment criteria ○Relief for unfair wages due to discrimination in placement and promotion ○Job evaluation procedure and related systems
Ⅳ. Seniority wage system and the principle of equal pay for equal value work □Seniority wage system and the gender wage gap ○Current status of Korea’s seniority wage system -The current status of Korea's seniority wage system can be indirectly checked through the results of the Ministry of Employment and Labor's "Additional Survey on Business Labor," which surveys types of methods to determine basic wages, including the hierarchical single-salary system. Among all companies, the percentage of companies that adopts this salary system as the basic method to determine salary has continued to decline: 43.5% in December 2009, 36.3% in June 2013, 19.5% in June 2017, and 13.7% in June 2021. -The result of examining the number of companies using the hierarchical single-salary system and the gender wage gaps among those firms depending on industry they belong to in 2021 shows this; as the proportion of companies using the hierarchical single-salary system increased, there was also a tendency for the gender wage gap to increase between all workers’ total monthly wages and regular workers’ flat salaries. It was found that when the proportion of companies using the hierarchical single-salary system in each industry increases, the gender wage gap also increases between all workers’ total monthly wages and flat salaries, as well as the total monthly wages of regular workers and flat salaries. ○Analytical review on the relationship between the seniority wage system and the gendered wage gap: Results of the 2021 Female Manager Panel Survey
□Interpretation of clauses about the seniority wage system and equal pay for equal value work -Even if there is equal pay for equal value work, if salary cap is set up high for jobs where male workers dominate and low for jobs where female do, it can be construed that there is gender discrimination. But with regard to this, the excuse that “discriminatory practices of the past when women’s employment was made later than men’s and there were jobs mostly covered by male employees had a tendency of setting up a high cap” can be granted. -It is necessary to justify regulatory legislation by referring to clauses in legal provisions, including of the US and Canada (Chapter 2). But citing the seniority-based wage practice as if it were a panacea can compromises the legislative purpose of equal pay for equal value work, we need a more nuanced approach than framing the. This is because in countries like the US where only the “real seniority-based wage structure” is provided, such justification can be accepted in most cases. The basic principle should be that the argument presented for seniority-based wages has to be able to break the presumption that there has been gender discrimination in wages (a violation of the provision for equal pay for equal value work). In cases where there is a wage difference between men and women in same jobs because of the seniority wage system working more favorably for men, the wage system should be strictly examined for justification. Only with justifiable reasons, the case that different seniority wage systems for equal value work can be granted and accepted. In particular, if evidence shows that different seniority standards for same value jobs are derived of gender discrimination, employers’ defense should be reviewed more strictly.
Ⅴ. Gender-neutral job evaluation and the principle of equal pay for equal value work ○Review foreign cases that contributed to the elimination of gender discrimination in wages through job evaluation ○Case from the State of Minnesota, US -It is one of the state governments in the US, the first in its kind, to make legislation for equal wages for equal value work and to lead a change. -Minnesota's willingness to lead change through systematic and long-term efforts to bridge the gender wage gap and to endlessly find implications and improve in the process was the factor that drove its success. Not satisfied with the achievement, since 1992, the Midwest state has been continuously striving to realize pay equity between local governments and private companies. ○Case from a local government of the UK -Decision for the basic salary in the UK local government was to reach through negotiations between the NJC and local governments, and basic salaries for local civil servants in site operations and office jobs are determined by central negotiations enforced by the 1997 implementation of the Single Status Agreement. The job evaluation tool of the NJC is meaningful in that it plays an important role in presenting appropriate standards for the local government's wage system and preparing rational procedures. -In addition, the job evaluation of the NJC acts as a standard for reviewing whether the same wage is paid for the same labor and is utilized as a standard for identifying whether unfair and unequal wages were paid. The Equal Pay Audit (EPA) is a survey related to employment discrimination that examines the possibility that there is unequal pay for equal value labor. It compares the wages of groups performing the same work, as presented in the Equality Act, with the objective of narrowing gaps that cannot be justified on a legitimate basis, such as those wage gaps caused by gender, race, disability, or part-time/full-time status. -The NJC's job evaluation tool is of major significance in that it is a common, credible standard that presents the standard framework of the local government's basic salary standards.
Ⅵ. Policy recommendations -The outline of policy improvement tasks for the effective application of the principle of equal pay for equal value work and resolving the gender wage gap is as follows:
□Job evaluation methodology ○Establish and reflect the principle of gender-neutral job evaluation -Supplement job evaluation tools and manuals of the Ministry of Employment and Labor’s Wage and Job Information System (wage.go.kr). -Suggest the necessity of gender-sensitive evaluation and its methodology for the future in the Evaluation Manual for Equal Pay for Equal Value Work (5th Basic Plan for Equal Employment for Men and Women). -Reflect manuals and guidelines, including of the UK’s NJC, where employers’ discriminatory job evaluation are recognized as violating the principle of equal pay for equal value work.
□Application of the principle of equal pay for equal value work in the seniority wage system -If there is no factor regarding position level, like in the flat mixed-salary system, it is not necessary to go through the step of job value evaluation. In cases like the Hyosung Co., Ltd. where, within the same production job, occupational groups are divided according to their process and wages are thus set differently (mixed type), it needs to determine if their job values are equal and same because the application of the wage system is different depending on job. □Establishing criteria for judging equal pay for equal value work ○Selection of targets for comparison
□Relevant law to justify reasoning ○Legislative revisions related to reasoning of equal pay for equal value work violations (Article 8, Equal Employment Opportunity And Work-family Balance Assistance Act) ○Reasonable justifications concretely illustrated: Examples of exceptional reasons such as educational background, years of service, the route of employment, shortage in the labor market, and peak wage systems are shown as examples, and a proportional review is clearly stipulated. Refer to legislative cases of Canada and UK. ○Investigation manuals, etc. from the Ministry of Employment and Labor and the Human Rights Commission on employment discrimination cases
□Comprehensive Revision of the Equal Opportunity in Employment regulations ○Necessity of revising regulation contents based on systemic understanding of the principle of equal pay for equal value work
□The necessity of support policy related to gender-sensitive job evaluation ○Due to costs and technical difficulties in job evaluation, it is difficult to access individual workers and labor unions. The Ministry of Employment and Labor conducts projects to support related expenses. →We would like to propose an amendment to Korea’s Equal Employment Opportunity And Work-family Balance Assistance Act that would grant authority to the Labor Relations Commission or the court so they can request the results of expert evaluations. Although it is possible to utilize (expert) appraisal procedures or on-site verification under the existing Civil Procedures Act, there is a limitation as that risks relying only on the competence of individual judges or labor committee investigators. We would like to request an 'Equality in Employment Expert Committee on Job Evaluation' to investigate and report on job evaluation and utilize this to propose the regulatory basis of a system that can be used for judgment. Professional job evaluation experts, like the pool of experts designated by ACAS in the UK, would be appointed as members. ○Job evaluation and wage comparison projects targeting social service jobs not involving caregiving (jobs where men are concentrated) were implemented as demonstrations → As in the case of local governments in the UK, the wage system that had devalued occupations the female workers dominated improved with leadership from the public sector.
Research areas: labor law, employment policy Keywords: Equal pay for Equal value work, Equal Pay Act, Employment Discrimination, Job evaluation |
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