LABOUR REGULATIONS FORFOREIGN-INVESTED
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
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
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
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
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
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
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
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
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
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
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
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
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 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.