Working hours regulation in South Korea

On July 14, 2023, the Seoul Administrative Court held that a flexible working hours system could be combined with overtime.

In South Korea, employers may choose to implement a flexible working hours system under certain circumstances. This system allows employers to schedule employees to work more than the statutory working hours of 40 hours a week during periods of increased work as long as regular working hours average 40 hours per week during the period that the flexible working hours system is in effect (the “unit period”). This system can be implemented in any industry but is most often used in seasonal industries.

The requirements for a flexible working hours system depend on the length of the unit period.

• For unit period of up to two weeks, the employer’s rules of employment must simply state that the employer may implement a flexible working hours system. There is no need to separately obtain consent from the employees. Under this unit period, weekly working hours may not exceed 48 hours, exclusive of overtime.
• For unit period of more than two weeks and up to three months, the employer must obtain written consent from the employees’ representative. Moreover, the total working hours to be worked by the employees during this unit period must be predetermined on a daily increment at the time the employer obtains the employee representative’s consent. Under this unit period, weekly working hours may not exceed 52 hours, exclusive of overtime.
• For unit period of more than three months and up to six months, the employer must also obtain written consent from the employees’ representative. However, unlike the unit period between two weeks and three months, the total working hours to be worked during this unit period may be predetermined on a weekly increment at the time the employer obtains consent. If the total working hours are provided on a weekly basis, the employer must give employees two weeks’ advance notice of the breakdown of daily total working hours to be worked during the week. Under this unit period, weekly working hours may not exceed 52 hours, exclusive of overtime.

For periods exceeding two weeks, the flexible working hours system requires an agreement between the employees’ representatives and management. If a majority of employees are part of a labor union, the union represents the employees. If not, a representative chosen by a majority of employees represents them.

Overtime, which is currently limited to 12 hours per week, can be applied simultaneously, allowing employers to schedule employees to work more than statutory maximum working hours of 52 hours per week. Consequently, the maximum weekly working hours under a flexible working hours system, inclusive of overtime, are: 60 hours for a unit period less than two weeks; 64 hours for a unit period between two weeks and three months; and 64 hours for a unit period between three months and six months.

Recent case involving overtime, flexible working

The above scenario concerning overtime and the flexible working hours system was at the crux of a recent case involving a consumer electronics company. This company had a clause in its employment agreement with field service technicians where the employee gave prior consent to work overtime in urgent circumstances. This was to address situations where significant consumer demands (such as during summer when there is high demand for air conditioner and refrigerator repairs) made it impossible to handle the work with regular working hours alone.

Accordingly, the company entered into a written agreement with a labor union in which a majority of technicians were members (but not a majority union at the company) and implemented a six-month flexible working hours system stating the working days and daily working hours during that period. The schedule combined the prior agreement to work overtime and the agreement to implement a flexible working hours system, which could result in total weekly working hours exceeding 52 hours.

An employee was disciplined for refusing to work his assigned shifts under this flexible working hours system. He claimed that the labor union in which a majority of technicians were members was not the authorized entity to agree to the flexible working hours system; the comprehensive prior consent for overtime was invalid; and combining overtime and regular working hours in the schedule was illegal.

The court held that because consent had been given by the union representing a majority of applicable employees, the consent required for implementing the flexible working hours system was valid. The court further held that prior consent for overtime was valid and that flexible working hours and overtime could be applied simultaneously.

This case provides guidance to companies that may wish to simultaneously implement both a flexible working hours system and overtime due to increased seasonal workloads.

Young Min Kim is a partner, Seong Hong is a partner, Edward Dhong is a senior foreign attorney, Irene Kim is a senior foreign attorney, and Douglas Hwang is a foreign attorney, all at Yoon & Yang in Seoul. Yoon & Yang LLC acts for and advises multinational companies in Korea.