Legislation to Raise the Statutory Retirement Age to 65 Stalls Over Implementation Timing and Work-Rule Exception

[Financial News] The Democratic Party of Korea said it would speed up legislation to raise the statutory retirement age to 65, which has stalled. However, it made clear that it opposed easing the requirements for making disadvantageous changes to employment rules, as demanded by business groups. Narrowing differences over when the extension would take effect and how the wage system would be restructured is expected to be key to passing the legislation.
Lee Yong-woo, a member of the National Assembly Committee on Climate, Energy, Environment and Labor, and the Korean Metal Workers’ Union held a press conference at the National Assembly Communication Hall on the 27th, calling for the statutory retirement age to be raised to 65.
Lee said, “The Democratic Party promised at the 21st presidential election to gradually raise the statutory retirement age to 65,” and asked for understanding over the delay in the legislative timetable it had set for the end of last year. He added that he strongly supported the Metal Workers’ Union’s call to legislate the extension and stressed, “We will put voices from the workplace at the center of parliamentary discussions and do our utmost to pass the legislation promptly.”
The Democratic Party’s special committee on retirement-age extension reportedly put together a compromise proposal with labor and business groups around last June. It would raise the current statutory retirement age of 60 to 61 in 2029, then increase it by one year every two years until it reaches 65 in 2037. The proposal also included combining an extension of the retirement age with reemployment after retirement.
Labor groups have opposed the proposal, saying its implementation would come too late to address the income gap after retirement. They have particularly pointed out that income gaps would remain for people born in 1967–1968, among others, who are nearing retirement, leaving discussions at a standstill.
Another point of contention is a special provision to ease the requirements for making disadvantageous changes to employment rules. It would temporarily relax the requirement for workers’ consent to adjust the working hours and restructure the wage system for those covered by the retirement-age extension. Labor groups worry that this could lead to unilateral wage cuts by employers.
Under the current Labor Standards Act, changing employment rules to the disadvantage of workers requires the consent of a union organized by a majority of employees. At workplaces without a majority union, the consent of a majority of employees is required.
The Metal Workers’ Union argued that the special provision being discussed by the government, business groups and some members of the National Assembly seeks, through an amendment to the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion, to replace this consent procedure with “simply soliciting opinions.” It criticized the proposal, saying, “This is a clear attempt to shake to its foundations the collective bargaining rights of trade unions guaranteed by the Constitution and the Labor Standards Act, and to grant capital a special provision for unilateral wage cuts.”
Lee also stressed that extending the retirement age was an unavoidable choice and declared that a “package” bill linking it to easing the requirements for disadvantageous changes to employment rules was absolutely impossible. He said, “The system governing disadvantageous changes to employment rules is a foundation of labor law,” and warned that easing it could create another serious problem.
Accordingly, future legislative discussions will likely need to address not only the timing of the retirement-age extension but also broker agreement on procedures for adjusting wages and working conditions, over which business and labor groups disagree.

[email protected] Kim Hyeong-gu Reporter