Seoul to Ban 'Fragmented Contract' Practices for Fixed-Term Workers
The Seoul Metropolitan Government has announced measures to prevent the practice of 'fragmented contracts' for fixed-term employees. This strategy, often referred to as 'contract splitting,' involves repeatedly hiring workers on short-term contracts to circumvent legal protections and benefits associated with longer employment periods.
Under the new regulations, when a fixed-term employee is rehired, their previous periods of employment will be aggregated. This aims to ensure that workers who are continuously employed, even through multiple short-term contracts, receive fair treatment and accrue benefits as if they were on a single, longer-term contract. The city's initiative seeks to provide greater job security and prevent the exploitation of loopholes in labor laws, thereby fostering a more equitable work environment for temporary staff within Seoul.
This policy addresses a common labor market inefficiency where employers may strategically segment employment periods to avoid statutory obligations like severance pay or eligibility for permanent positions. By mandating the aggregation of service duration for rehired fixed-term workers, Seoul is attempting to realign incentives, encouraging more stable employment structures. This move could influence labor costs and hiring strategies for municipal entities and potentially set a precedent for other local governments or even national policy. The long-term impact will depend on enforcement effectiveness and how employers adapt to the revised cost-benefit analysis of contract duration versus continuous employment.
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