Labor Trends

The FKTU and KCTU have teamed up with the Democratic United Party (DUP) and Unified Progressive Party (UPP) respectively to push their demands for election pledges favorable to labor. Priority is expected on demands shared by both umbrella unions, such as revision of the Trade Union Act (time-off and multiple unions system), Act on the Protection, etc. of Fixed-Term and Part-Time Employees, and the Minimum Wage Act.

		FKTU & DUP	KCTU & UPP	Saenuri Party
Non-regular work	Fixed-term workers	Provide subsidies to companies granting regular jobs		Against subsidies
	Dispatched or In-house subcontract workers	Immediate employment in case of illegal dispatch: resolve by revising the Act on the Protection, etc., of Dispatched Workers	Immediate employment in case of illegal dispatch: resolve by revising the Employment Security Act, and abolishing the Act on the Protection, etc., of Dispatched Workers	Job security in case of subcontractor change; establish an Act on protection of in-house subcontract workers
	Discrimination	Improve correction of discrimination: Allow industry-level unions to apply for correction of discrimination Extend correction period to 6 months after the discrimination is identified.		Prohibit  discrimination in all areas, including welfare and incentives
Minimum Wage		Increase minimum wage to at least 50% of ordinary wage		Against minimum wage increase

Meanwhile, general strikes are expected in late August by the Korean Metal Workers Union (KMWU) and the Korean Construction Workers Union (KCWU) both affiliated with the KCTU. The success of the KCTU-led general strike will likely depend on participation by autoworker trade unions and the KCWU.

Under the concerns over FKTU influence weakening within the DUP, the FKTU president, Lee Yong-deuk, held a press conference on March 4 to announce that he would leave the DUP if the party continued to ignore the FKTU during the nomination process. As the former president of the KCTU, Lee Suk-haeng has joined the DUP, Mr. Lee is expected to put more effort into strengthening the FKTU’s influence within the DUP to ensure representative power of FKTU among labor groups. Mr. Lee announced that he would not run in the April general elections, which suggests that he will focus on increasing FKTU influence within the DUP.

Meanwhile, the KCTU and UPP held a “Policy Compact Ceremony” on March 6 in preparation for the general elections. The KCTU is seeking to strengthen their political influence through and within the UPP. At a “Special Convention” on March 22, the PD (People Democracy) faction within the KCTU criticized the executive leadership for following the UPP during its election campaign and requested more support for the New Progressive Party (NPP) instead. But the KCTU executive plans to continue supporting UPP for the general election while the NL (National Liberation) faction within the UPP plans to strengthen their central role in the party through the general elections.

The trade unions at Hyundai and Kia Motors, affiliated with the Korean Metal Workers’ Union (KMWU), decided to team up for wages and collective agreements in 2012. A press conference was held on March 6 to open the “Joint Labor Strife Office”. Both union branches are expected to strengthen their collaboration on areas of common interest such as working hour reductions and implementation of a daytime two-shift system.

As the trade unions at Hyundai & Kia Motors gear up for labor action, the KMWU is planning to hold general strikes at the same time. The KMWU seeks to expand their influence at the industry level through general strikes which may put pressure on component suppliers.

Meanwhile, on March 13, the KMWU and autoworker unions decided to push ahead with joint bargaining with the Korea Automobile Manufacturers Association (KAMA) on issues related to working hour reductions and regular employment for in-house subcontract workers. The KAMA has remained aloof about joint bargaining with the KMWU but depending on the intensity of labor strife, the KMWU may make an issue of joint bargaining on finished car makers.

The KMWU plans labor strife this summer to force a daytime two-shift system and working hour reduction for both autoworkers and workers in component factories, as the summer is the time when the government plans to revise the laws related to working hours (including holiday work in extended working hours).

The FKTU began a nationwide tour to communicate its guidelines for wages and collective bargaining. Labor and management in the financial sector began their collective bargaining March 28. Wages, working hour reductions, representative bargaining rights through the unified bargaining channel process are expected to be the main goals for trade unions in wage collective bargaining for 2012. The FKTU is demanding a 9.1% increase in wages, the Korean Financial Industry Union (KFIU) 7%, the Federation of Korean Metal Workers Trade Unions (FKMTU) 9.2%, and the Federation of Korean Chemical Workers Unions (FKCWU) 9.3%. However, the KEF recommends that companies increase their wages to a maximum of 2.9% (For more details, please see ‘Focus of the Month’ in this issue).

Politicians are proposing many different populist policies as they gear up for the general and presidential elections this year. These policies threaten both business and national economic growth. At a press conference on March 14, the KEF Chairman, Mr. Hee-beom Lee had some harsh criticism for the kinds of policies that simply appeal to what people want, and unfairly favors trade unions.

Chairman Lee emphasized that excessive welfare benefits place a burden on the national economy, noting that while “A farmer produces 10 bottles of milk from 10 cows and 20 bottles from 20 cows, if he is taken over by greed and raises 100 cows to gain 100 bottles of milk, the crops will disappear and the farmer will be left with nothing at all.” He added, “Everybody wants welfare benefits but excessive benefits will damage the national economy.”

Chairman Lee also expressed concern over trade unions expanding their influence in politics and politicians proposing labor-favoring policies. He stated, “Approximately 40 people from labor groups have received or are about to receive nomination for the April general elections. People from various parts of the society can participate in politics but politics must be impartial and should not be tilted towards any specific group.” In particular, he stressed that trade union demands for revision of the Trade Union Act (TULRAA), which was revised a year ago under the tripartite agreement, are not acceptable.

Responding to the statement by the Ministry of Employment & Labor that Korea is ‘a republic of overwork’, Chairman Lee exclaimed “How can the government use such an expression?” He then added, “The government will not be able to create more jobs simply by reducing working hours. Wages, labor flexibility and productivity should all be considered together.” He also stressed, “Rather than making new regulations, the government should seek ways to maximize efficiency under the current system, in line with market principles.”

With regard to excessive regulations of large enterprises, Chairman Lee pointed out that politicians had lost a sense of balance. “They are putting excessive regulations on businesses while proposing higher taxes on the wealthy and plotting to break up conglomerates.”

As for the KORUS FTA, the Chairman said “It is not appropriate to make the KORUS FTA a political issue when it has already been ratified by both countries.”