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Untitled Document
LABOUR REGULATIONS FORFOREIGN-INVESTED ENTERPRISES

Adopted by Decision No. 40 of the Cabinet on May 8, 1999

Chapter 1. General

Article 1. These regulations are formulated to provide foreign-invested business with necessary labour and to protect rights and interests of the employed in their work and life.
Article 2. Labour needed for foreign-invested enterprises shall be recruited or employed, remuneration be paid and conditions be provided for their work and life, pursuant to these regulations.
These regulations shall be also applied to the foreign enterprises incorporated in the territory of the DPRK.
Article 3. A foreign-invested business shall employ the labour of the DPRK.
In case foreign nationals are to be recruited as management staff members, technicians and skilled workers of special jobs, consent shall be secured of the central trade guidance organ.
Article 4. The labour employed by a foreign-invested business shall not be used for other purposes, except in case of force majeure such as natural disaster.
Article 5. The amount of remuneration shall be determined by the foreign-invested business of its employees, in consideration of the type of job, the degree of qualification and productivity.
Remuneration shall include wage, allowance, bounty and bonus.
Article 6. A Foreign-invested business shall pay primary attention to the improvement of working conditions so that employees can work in a safe and clean environment, and to the protection of their lives and promotion of their health.
Article 7. A foreign-invested business shall ensure that the citizens of the DPRK under its employment benefit from social insurance and social security, subject to the laws and regulations of the DPRK on labour.
Article 8. A foreign-invested business shall protect the rights and interests of its employees and conclude a labour contract with the trade union representing the employees.
The labour contract shall define duties of employees, quota of production, quality standard, working hours, holidays, remuneration, guarantee of living conditions, labour protection, working conditions, labour discipline, reward and punishment, retirement and so on.
The labour contract shall have legal effect from the date of its signing and any amendment shall be made by agreement between both sides.
A foreign-invested business shall submit the labour contract to the labour organ in the Zone.
Article 9. The central labour organ shall supervise and control in a unified way all matters concerning organization and undertaking of labour in the foreign-invested business.

Chapter 2. Employment of Labour

Article 10. A foreign-invested business shall independently determine the number of employees needed for its operation, conclude a contract of employment with the labour exchange office and employ labour as provided for in the contract.
The contract of employment shall specify such particulars as the number of employees classified into the types of jobs and skills, the term of employment, labour cost, and working and living conditions.
Article 11. The labour exchange office shall provide the foreign-invested business with the labour resident in the area of its operation. If certain skilled workers are not available or in short supply, they may be recruited from other areas.
In such a case, the labour exchange offices in the relevant areas are obliged to supply them.
Article 12. An equity or contractual joint venture which is run jointly with the institutions or enterprises of the DPRK shall give priority to the employees of the contracting parties of the DPRK in respect of employment.
Article 13. A foreign-invested business shall employ the labour recommended by the labour exchange office in the area of its operation. This provision, however, does not prevent any foreign-invested business from refusing the labour if found inconsistent with the terms of the contract of employment.
Article 14. A foreign-invested business shall not dismiss any of its employees before the expiry of the term of employment without consent of the trade union and the labour exchange office concerned, as well as the employees who receive medial treatment due to occupational disease or injury in service are in sickbed for up to 6 months, and female employees who are married, pregnant, in maternity leave or in breast-feeding period.
Article 15. A foreign-invested business may, after consultation with the trade union and the labour exchange office concerned, dismiss any of its employees even before the expiry of the term of employment in case an employee, though he has been treated for disease or injury other than occupational disease or injury caused while working, is not capable of continuing his former work or other jobs, any redundancy of labour is caused due to the changes in production management and technical conditions, any curtailment of labour becomes inevitable or winding-up is declared in face of bankruptcy, or an employee has inflicted great loss to the enterprise or seriously violated the labour discipline.
Article 16. An employee of a foreign-invested enterprise may tender resignation when he has personal reasons to discontinue the job or transfer to another job, is not able to display his technical capability because his job does not fit in his profession, or is enrolled in an institute of learning.
Article 17. In case a foreign-invested business intends to dismiss an employee not by his own fault but for some reasons, it shall give subsidy to him at a rate decided on the basis of the years of his service.
The amount of subsidy shall be equivalent to that of one-month wage of the recent period if the employee concerned has worked for less than 1 year, and shall be as much as calculated on the basis of both the average wage of the recent three months and the years for which he has worked when the employee concerned has engaged in labour for more than 1 year.
Article 18. When a foreign-invested business dismisses or accepts the resignation of an employee, it shall, after consultation with the relevant trade union, submit the list to the labour exchange office in the area of its location 1 month in advance of his dismissal or resignation.

Chapter 3. Technical Training

Article 19. A foreign-invested business shall improve technical qualifications of its employees and qualify them, according to the laws and regulations of the DPRK on labour.
Article 20. A foreign-invested business may, if necessary, train skilled workers.
Article 21. The people’s committee in a special economic zone may organize and run a technical training center as required by the foreign-invested business.
Technical training shall be given in the forms of in-service training and pre-employment training for school leavers.

Chapter 4. Working Hours and Holidays

Article 22. The working week shall be 6 days and the working day 8 hours.
According to the level of intensity and special conditions of work, a foreign-invested business may fix the working hour shorter.
In the sectors influenced by seasonal limitations, the working hours may be flexible within the range of the total working hours of the year.
Article 23. A foreign-invested business shall not work its employees overtime.
Under unavoidable circumstances, it may organize overtime work but only after having consultation with the trade union.
Article 24. A foreign-invested business shall provide its employees with rest on bank holidays and with regular and additional leave and maternity leave according to the laws and regulations of the DPRK.
If employees are requested to work on a bank holiday, they shall be given a compensatory day off within 1 week.
A foreign-invested business shall provide each of its employees with special leave of 1 to 5 days for ceremonial occasions. The special leave shall not include the days for travelling.

Chapter 5. Remuneration

Article 25. The standard rate of monthly wage of an employee working for a foreign-invested business shall be fixed by the central labour organ.
The central labour organ shall fix the standard rate of monthly wage on the principle of compensating for physical and mental strength of employees emaciated in the course of their working and guaranteeing their life.
The wages in the preparatory period for operation and those for apprentices and unskilled workers may be lower than the standard monthly wage set under the approval of the relevant organ.
A foreign-invested business shall, on the basis of the rated standard wage, decide wages by occupation and position, forms and methods of payment, and the standard allowance, bounty and bonus.
Article 26. A foreign-invested business shall gradually increase the rate of wage in step with the growth of production and the improvement of technical qualifications of its employees and labour productivity.
Article 27. A foreign-invested business shall pay remuneration related with leave and additional leave before he goes on leave.
Remuneration for leave shall be calculated by multiplying the average daily remuneration for actual working days during the three months immediately before leave by days of leave. The calculation shall be based on wage, allowance and bounty.
Article 28. A foreign-invested business shall pay its employees subsidy equivalent to 60 per cent or more of daily or hourly wage for the days or hours when they were off work due to mismanagement of the enterprise or their training.
Article 29. A foreign-invested business, which has worked its employees on a bank holiday and failed to give a compensatory day off, or worked overtime in the day or worked them at night, shall pay them allowance equivalent to 50 per cent (100 per cent to the employees whom it worked on a bank holiday or overtime at night) of their daily or hourly wage for the days or hours of their extra work, in addition to the wage.
Article 30. A foreign-invested business may create a bonus fund with part of its after-tax profits and, in consultation with the trade union, pay bonus to the employees who have contributed to fulfillment of the production quota.
Article 31. A foreign-invested business shall accurately set the wage, allowance, bounty and bonus to be paid to the employees, according to actual results of their working. In case an employee resigns or is dismissed before the payday, he shall be paid the remuneration after due procedures are over.

Chapter 6. Labour Protection

Article 32. A foreign-invested business shall install and steadily improve labour safety facilities to ensure the safety of operation, keep off heat, gas and dust, and provide industrial hygienic conditions such as lighting and ventilation, so that the employees can work under sound and clean conditions.
Article 33. A foreign-invested business shall give its employees education in labour safety before working them. The period of education shall be 1 to 2 weeks depending upon the types of job and occupation.
Article 34. A foreign-invested business shall provide sanitary and labour safety facilities to female employees.
No difficult and harmful work shall be assigned to any female employee who is over 6 months pregnant.
Foreign-invested businesses may build and operate creches and kindergartens to bring up the children of the employees in conformity with their actual conditions.
Article 35. A foreign-invested business shall regularly supply its employees with labour materials such as protective guards and shields, safety tools and devices and nutrients.
The standard of labour safety materials for employees shall be determined by the foreign-invested business not to be lower than that fixed in the laws and regulations of the DPRK on labour.
Article 36. If a serious industrial accident occurs resulting in death, injury or poisoning of any of its employees on job, the foreign-invested business shall promptly notify a relevant organ of the case and submit itself to the investigation of a relevant organ.

Chapter 7. Social Insurance and Social Security

Article 37. The citizens of the DPRK employed by a foreign-invested business shall be entitled to the benefits of social insurance and social security schemes in the event of sickness, injury or retirement.
The benefits of social insurance and social security include subsidy, pension, recuperation, recreation and medical treatment.
The employees applying for subsidy and pension shall submit to the foreign-invested business concerned a medical certificate or a document of justification to that effect issued by a health service organ.
The foreign-invested business shall have the application for payment of subsidy approved by the social insurance organ so as to draw the subsidy from the bank and pay it to the employees on the payday.
The travelling expenses to and from the recuperation and rest homes and the subsidy for funeral service shall be paid in advance against a relevant document and be settled afterwards.
In relation to pension and subsidy by the social security scheme, the foreign-invested business shall submit the application to the social insurance organ for approval and make payments on such dates as determined by the social welfare organ.
Article 38. Subsidy and pension by the social insurance and social security schemes shall be calculated in accordance with the laws and regulations of the DPRK on labour.
Article 39. The social insurance and social security schemes shall be funded from the social insurance fund. The social insurance fund shall be created with insurance premium paid by the foreign-invested business and its employees.
Article 40. A foreign-invested business may set up recuperation and rest homes for the promotion of health of its employees.
The operation cost of the recuperation and rest homes shall be met with the social insurance fund.
Article 41. A foreign-invested business shall be supervised by the social insurance organ in the area of operation and the trade union in respect of the payment of insurance premium and appropriation of insurance fund.
Article 42. A foreign-invested business may create a welfare fund for its employees with part of its after-tax profits.
The welfare fund shall be spent on improving the cultural and technical levels, sponsoring mass cultural and sports events and running welfare facilities. The trade union shall supervise use of the welfare fund.

Chapter 8. Penalties and Settlement of Disputes

Article 43. If a foreign-invested business contravenes any of these regulations, it shall bear such administrative penalties as suspension of business and fine to the extent of the breach, and penal responsibility in case of severe breach.
Article 44. A foreign-invested business which has a grievance regarding the implementation of these regulations may present a complaint or a petition.
A complaint or a petition shall be settled within 30 days after its receipt.
Article 45. Any disagreement related to the implementation of these regulations shall be settled between the parties concerned through consultation. Any dispute that cannot be settled between the parties concerned shall be brought to an arbitration agency or a court of the DPRK.


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