ILO/Korea Study Tour on Employment Insurance(KEIS)

Background

In the past two decades, many Asian countries have experienced rapid economic development, associated with significant changes in the labour market and also, increased competitions. Development also brought in many other challenges such as increasing income gaps, decreasing but still persisting poverty, increasing informal economy workers and necessities to upgrade skills and productivity of workers. Sustaining economic growth and guaranteeing social stability are major concerns of many countries.

In 2001, during the International Labour Conference (ILC), tripartite constituents reached a new consensus on social security as an important tool to reduce poverty and to promote social and economic development. The ILC considered that the highest priority should be given to policies and initiatives which can bring social security to those who are not covered by existing systems. However, most countries in Asia still suffer from the narrow coverage of social security for the formal economy and general lack of any social protection for the informal economy.

There are not many countries which have employment insurance systems in Asia. Employment insurance systems have become more important amidst globalizing economic environments where jobs in general become more flexible and less secured and workers get more vulnerable to any economic turbulence which could easily threaten job securities of workers. Although many counties have, under their labour laws, cash compensation systems, often called as severance payments, directly financed from enterprises in case of redundancies, they may very often fail in delivering cash compensations due to insolvency of enterprises because of bankruptcies and closure of enterprises.

Thailand has started the unemployment insurance scheme since 2004 and seeks for the further development due to the insufficient active labour market policies. Vietnam has passed its new social security law since 2006, which includes new unemployment benefits and needs to prepare for its implementation planned in 2009. Preparations are huge challenges for Vietnam, ranging from the design issues such as implementation organizations and collaborations and coordination between organizations, administrative procedures backed by necessary decrees and circulars to be drafted, to the implementation issues such as training existing and additional staff for new benefit provisions. Malaysia, Sri Lanka and Nepal are also considering the possibility of introducing employment/unemployment benefits in the future.

Korea has developed its comprehensive employment insurance system and the system has well functioned to mitigate risks of unemployed and also functioned as an automatic economic stabilizer, especially in the times of Asian financial crisis of 1997-1998. It is worth while learning a well-developed Korean employment insurance system as one of a good model in Asia.

This study tour is organized by the ILO and Korea Employment Insurance Service (KEIS) in the framework of the ILO/Korea Partnership Programme and will provide participants with opportunities for learning Korean experiences and expertise on employment insurance system.

Objectives

At the end of the fellowship programme, the participants will have been able to:

• identify priority needs in establishing or improving an employment/unemployment insurance scheme and policy frameworks, in line with ILO Social Security Conventions, notably, the ILO Convention No. 102 and international good practices;
• have clear visions and ideas to establishing or strengthen an employment/ unemployment insurance scheme, such as legislation, the design of the scheme (e.g. benefit packages, financing) and administrative procedures of employment/ unemployment insurance scheme;
• obtain an idea of planning, developing and organizing awareness raising activities and training activities on unemployment insurance for government officials, workers and employers; and
• have a practical idea to extend the coverage of employment/unemployment insurance to workers.

Prior to this study tour, each country delegation is requested to draft and submit in advance a country report (outline provided in the Annex) a Power-Point presentation, and a note of interests/questions and will make a presentation during the study tour.

Participants

Two participants each will be invited from Nepal, Malaysia, Sri Lanka and Thailand, and three from Vietnam.