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Temporary workers hired under the ``labor lease'' system are getting worried about job security since their two-year contracts expire in July.

Labor unions and employers have failed to narrow their difference on the extension of the two-year contract period.

The labor lease system was introduced in July 1998 in a desperate move to help companies cut labor costs following the 1997 financial turmoil and economic crisis.

The system bans businesses from recruiting a temporary worker for more than two years. The ban is designed to encourage employers to re-hire those short-term workers as regular employees.

Official statistics showed that an estimated 53,000 temporary workers were employed as of the end of last year. An estimated 5,000 to 7,000 of them will see their contracts expire in July.

Corporations, especially small- and medium-sized ones, are just trying to maintain the employment of temporary workers on an irregular basis _ beyond the maximum two-year employment period.

Many financially-strapped firms are demanding that the government revise related labor laws to extend the contract terms. They claimed that they cannot afford to place temporary workers on a regular payroll.

Employers said that if they are not allowed to lengthen the terms, they have no other choice but to terminate the employment of those workers whose contract period expires soon.

They are concerned that many companies will have to employ new temporary workers after laying off those with expiring contracts, thus causing a considerable damage to their business operations since newly-hired workers need training.

Last week, the Korea Chamber of Commerce and Industry (KCCI) advised the government to allow companies to extend the contract period by one year.

``We've made the recommendation in order to help companies cope with their financial hardship. We've asked the government to maintain the employment of temporary workers by more than 2 years,'' said a KCCI official.

But, labor unions are strongly protesting the possible extension of the contract period, claiming that businesses are making further efforts to exploit temporary workers.

As a counter-measure, the nation's two labor federations _ the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU) _ plan to urge the government to cut down the contract period for temporary workers to less than two years.

The labor groups are also seeking to call for a tighter restriction on the range of businesses which can hire temporary workers under the labor leasing system.

In addition, the federations are set to propose that the labor authorities form a fact-finding mission jointly with labor groups to conduct on-the-spot checks for potential corporate abuse and exploitation of temporary workers.

The Ministry of Labor said that it is difficult for the government to revise the law to extend the employment period for temporary workers.

However, the ministry stressed that temporary workers will be re-hired by their employers after the expiration of their contract either on a temporary or a regular basis.