Labor Trends

1. FKTU gears up for leadership election

After dealing with issues on revision of the time-off manual, increasing time-off limits and reorganization of the labor-management cooperation fund, the FKTU is expected to gear up for its leadership election scheduled for January, 2014. The current President, Mr. Jin-Kook Moon, is taking an active part in external activities such as a nationwide tour of workplaces with more than 100 employees, in an effort to gain the upper hand in the election. In addition to Mr. Moon, the former FKTU Vice-President, the President of the Korea Automobile & Transport Workers’ Federation and the President of the Korean Public Industry Trade Union are also expected to run for presidency of the FKTU.

Meanwhile, a number of FKTU-affiliated trade unions are also preparing for their own leadership elections later this year. These trade unions include the Korean Financial Industry Union, the Korea Automobile & Transport Workers’ Federation and the Federation of Korean Taxi Workers’ Unions. With these elections ahead, the FKTU and its affiliated unions are demanding; revision of the Trade Union Act, wage increases and opposing privatization of government-run banks, legislation of a taxi law.

2. New KCTU leadership strengthens labor strife

The newly-elected leadership of the KCTU is seeking ways to end long-term labor disputes in workplaces, while it strengthens labor strife in the public sector and political activities. Meanwhile, the KMWU (Korean Metal Workers’ Union – affiliated with the KCTU), elected its new leadership on September 26th; the new leaders are also expected to encourage aggressive labor strife.

The KCTU and KMWU have concentrated their activities on political strife primarily related to the parliamentary inspection and legal revisions during the regular parliamentary session. In addition to this, the KCTU continues its struggle against the government dealing with the Korean Teachers & Education Workers’ Union and the Korean Government Employees’ Union, while opposing the privatization of public services, including railway and gas. The KMWU is planning to unionize the steel, shipbuilding and electronic industries while expanding labor strife into small workplaces.

[Table 1] Major KCTU Rallies in the 2nd Half of 2013

Hard-line representatives are elected at workplaces including Kia Motors and Hyundai Heavy Industries. These representatives plan to strengthen labor strife in workplaces by demanding a high increase in wages as well as supporting union activities by in-house subcontract workers. However, in contrast to this, and influenced by strong repulsion against aggressive labor activities, the Hyundai Motors trade union elected a more pragmatic leadership on November 8th. The newly-elected President of Hyundai Motors’ trade union previously held the presidency from 2009 to 2011, and is known to have never declared a strike during the 3 years of his term.

3. Labor relations remain stable at workplace-level

The number of labor disputes and workdays lost has increased since July, affected by the summer strife, but overall, labor relations at the company level remain stable.

[Table 2] Average Number of Labor Disputes in the Last Four Administrations (as of Oct. 2013)

The number of labor disputes and workdays lost seem to have increased due to strikes carried out by large company unions and industry-level unions. In particular, Hyundai Motors faced a production shortfall of 130,000 cars and a profit loss of ₩2.7 trillion ($2.5 billion) this year due to partial strikes carried out by their trade union.

Meanwhile, after the 4th quarter of this year, labor is expected to increase political activities with the aim of securing upper hand in labor-government relations. In particular, labor strife in the public sector (KTX and the gas industry) opposing the introduction of a competition system and a rally by the Korean Teachers & Education Workers’ Union and the Korean Government Employees’ Union is expected to increase tension in labor relations.

4. Conflict between labor and management continues over the issue of ordinary wage

The burden on enterprises is increasing as lawsuits regarding ordinary wage expand in workplaces across Korea. The Supreme Court passed the KB Auto Tech case to the full-member court, which held a public hearing on September 5th; the final ruling of the Supreme Court is expected by the end of this year. At the public hearing ‘practices of ordinary wage calculation’ was a core issue and there were different views among the Justices on whether to limit ordinary wage as ‘one unit of wage payment’ but no specific remarks were made.

The revision of the Labor Standards Act to expand the scope of ordinary wage is currently pending at the National Assembly and was raised as an important issue at the Environmental and Labor Committee in November.

The “Wage System Improvement Committee”, created by the government to resolve the controversy over ordinary wage, recently announced their opinion that the scope of ordinary wage should be expanded. However, the government emphasized that the conclusion of the committee is not final, and that the committee’s conclusions would be finalized after taking into consideration the ruling of the full-member court. Meanwhile, tripartite discussion on ordinary wage is expected to face difficulties as labor refuses to participate unless the law is revised to “include regularly paid bonuses in the calculation of ordinary wage”, in line with some of the Court’s previous rulings.

5. Conflict over outsourced workers deepens in large companies and the public sector

In the 2nd half of the year, labor focused on the unionization of outsourced workers in large companies and state-owned enterprises. In particular, the KCTU and KMWU are planning to expand their unionization activities to include the subcontractor companies of state-owned enterprises, following their success with similar efforts within Samsung Electronics Service and Tbroad Holdings Co. Ltd. In addition, the KCTU is demanding a public hearing on the utilization of subcontractor companies in large corporations in order to raise outsourcing as a social issue while strengthening activities for protection of subcontract workers.

Meanwhile, the KCTU is seeking to use “Local Elections 2014” as an opportunity to carry out activities to unite non-regular and regular workers of subcontractor companies in both state-owned enterprises and local government in all regions. In particular, they plan to nominate KCTU candidates in selected regions with a large population of workers and increase their activity to consolidate workers in an effort to promote labor-management issues as social issues.