Tuesday, April 15, 2008

Changes to Severance Pay Laws in Korea

The Korean government recently announced changes to its laws regarding severance pay. Amendments have been made to the Labour Standards Act, effective immediately. Article 28 previously stated: "An employer shall establish a system by which an average wage of not less than 30 days per year for each consecutive year employed shall be paid as retirement allowance to a retired employee. Provided, however, that this shall not apply in cases where the period of employment is less than one year."

What this meant for many English teachers working in Korea was that at the end of their one year contract, they would receive a 'bonus' equal to one month's salary. Many Canadian teachers would then return to their home country and direct deposit their severance pay at The Beer Store.

Ministry of Education spokesperson Kim Do-Oh was recently quoted at a press conference, explaining the changes to severance pay allotment, "Our ministry and the Korean government in general has been under pressure for a number of years from hagwons and public school trustees regarding severance pay and foreign teachers. We have received thousands of complaints that having to essentially pay two months' salary and airfare at the end of an employees contract, along with the costs of replacing the teacher was an unfair burden."

The Ministry has come up with a plan that will ease the financial strain on public schools and hagwons, while also benefiting the outgoing teacher.

"We are aware," Kim continued, "the foreign teachers return to their home countries and distribute their severance pay at local bars and clubs. The severance pay allowance was set up for Korean nationals to help at the time of retirement. Severance pay was never meant to be 'Beer Party pay.' The new laws will benefit our education system financially, and foreign teacher's health as well. All teachers returning to their home country after more than a year of ongoing employment will receive our thanks and best wishes, and in lieu of severance pay, milk."
"It's good for health."

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