Legal Issues about ex post settlement of Labor Costs in Public Contracts

Abstract

The ex post settlement is widely used in public contracts. Since public contracts have the characteristics of a judicial contract, the addition of special conditions to the contract is not prohibited or restricted. Ex post settlement is not allowed in the absence of a special contract. On the other hand, if there is a special contract, it will be decided whether it is an unreasonable special agreement depending on the specific circumstances. The problem is the ex post settlement of labor costs. The Guidelines for protection of working conditions for Contracting-out workers allow the ex post settlement of labor costs. With respect to labor costs, the service provider may object. On the other hand, workers belonging to a service company can claim that all the labor costs are their share. It can be said that it is necessary for public institutions to achieve the public purpose of budget reduction through ex post settlement. However, it should be considered that the ex post settlement can be used as a means of resolving the low-wage structure of workers belonging to service companies.