Shinsegae E-mart said Monday it will grant regular staff status to some 10,000 employees of its subcontractors who display products at its stores.

The measure comes after the Labor Ministry ruled that these workers were illegally dispatched and instructed E-mart to directly employ them last week.

Directly employed staff are guaranteed employment until the legal retirement age and receive bonuses and incentives just like regular staff, which means a 27 percent raise in income.

They also receive welfare benefits such as children’s tuition support and medical expenses.

The subcontractors’ employees work for an average of 25 months, but from now on they will work for longer periods under a more stable work environment, E-mart said.

Forty-seven percent of the employees who will get regular staff status are women in their 40s and 50s.

The transition will cost E-mart about 60 billion won ($54 million)per year.

“Having turned 5,000 cashiers, who were part-timers, into regular employees in 2007, we have considered since last year making product display staff regular workers as well, but the decision was delayed due to increased costs,” an E-mart official said.

“There is still controversy over whether using subcontractors’ employees is illegal but we have chosen corporate partnership over exhausting arguments.”

E-mart also added that turning cashiers into regular staff had a positive effect. The discount store chain had expected an additional cost of 20 billion won per year, but fewer cashiers quit and their work performance improved after they became regular staff.

“We will continue to fulfill our social responsibility through constant investment and expansion of employment,” said Huh In-cheol, chief executive of E-mart.

In January, Hanwha became the first of the nation’s top 10 industrial groups to upgrade the employment status for a substantial number of its non-regular workers.

Hanwha said a total of 2,043 individuals of non-regular status would be elevated to regular employee status to receive benefit packages and equal promotion opportunities.

The figure included those who had been hired as contracted workers but were promised to be upgraded to regular worker status after two years. More than half were women.

Unionized workers at Hyundai Motor are also calling on the carmaker to grant regular staff status to its more than 6,800 irregular workers.

By Kim So-hyun (sophie@heraldcorp.com)