President Lee Jae Myung (right) shakes hands with Yang Kyung-soo, president of the Korea Confederation of Trade Unions, during a meeting at Cheong Wa Dae in central Seoul on Friday. (Yonhap) South Korea is moving to reassess its cap on fixed-term employment, as President Lee Jae Myung signals a potential shift in labor policy and a state-run think tank prepares a study on how the system operates in practice.
The Korea Labor Institute said Sunday it is preparing a fact-finding survey on fixed-term contracts, with bids open through Monday for firms to conduct the study. The research will examine contract duration, hiring practices and related issues, laying the groundwork for possible policy changes.
The move marks a rare departure for a liberal administration, which has traditionally resisted calls to ease restrictions on what Korea calls non-regular employment.
Since 2007, South Korea has required companies to convert fixed-term workers into regular, or permanent, employees if they are employed for more than two years.
The policy was intended to reduce reliance on non-regular workers, but critics say it has instead led firms to terminate contracts before the threshold, undermining job stability and workplace continuity.
Lee has repeatedly pointed to the gap between the legal framework and actual labor practices.
“Even for roles that could last four, five or even ten years, workers are hired for one year and 11 months, then let go briefly before being rehired under the same terms. In some ways, this forces unemployment,” he said during a meeting with the Korea Confederation of Trade Unions at Cheong Wa Dae on Friday.
He reiterated the point a day earlier, saying labor policy should prioritize practical outcomes over ideology, noting that companies remain reluctant to offer permanent positions while relying heavily on short-term contracts.
Calls to extend the allowable duration of fixed-term employment have traditionally come from conservative policymakers, who argue that South Korea’s labor market is overly rigid.
Former presidents Lee Myung-bak and Park Geun-hye had pushed to extend the limit to four years, but those efforts stalled amid strong opposition from labor groups and liberal lawmakers.
Data suggest the current framework has had a limited impact on reducing non-regular employment. The number of workers with fixed-term contracts rose from 4.54 million in 2021 to 5.34 million in 2025, while the conversion rate to regular positions stood at 8.6 percent at the end of 2024, remaining around 10 percent for years.
Despite these trends, the system has seen little change, reflecting deep divisions between those advocating greater flexibility and those calling for stricter protections.
Political reactions to Lee’s remarks have been mixed. The conservative People Power Party welcomed the shift, urging the administration to move away from what it described as an “ideologized” approach to labor policy.
“As the ruling Democratic Party has neglected the voices from the field and failed to address structural problems, this measure should have come much earlier,” said Rep. Choi Soo-jin on Sunday.
Labor unions, however, remain cautious. Yang Kyung-soo, president of the Korea Confederation of Trade Unions, warned that extending contract durations would not address the underlying issue.
“Hiring workers for just one year and 11 months to avoid regularization is wrong, but extending the period to three years would not solve the problem,” Yang said at a February press conference. “Flexible, temporary employment should be strictly limited.”
Expectations for reform are rising as the government gathers data, though any attempt to revise the system is likely to face strong resistance from organized labor, which argues that extending the allowable duration of fixed-term contracts would entrench non-regular employment and delay conversion to permanent positions.
forestjs@heraldcorp.com