Labor groups demand amendment of labor law, trying to attract more workers and raising concerns of unstable industrial relations
The Federation of Korean Trade Unions (FKTU) has mapped its main agenda of 2011 to amend the Trade Union Act, and the Korean Confederation of Trade Unions (KCTU) is also pushing ahead for a revision of the labor law in cooperation with opposition parties.
By using the sense of crisis from FKTU members over the time-off system and the multiple union system, Mr. Yong-Deuk Lee successfully ran for President of the FKTU, and signaled a willingness to fight by breaking away from a policy coalition with the ruling Grand National Party and announcing the beginning of a struggle to have the labor law amended. The KCTU is planning to initiate a ’Five Opposition Parties-KCTU’ meeting to abolish the current time-off system and the ban on payment of wages to full-time union officials. Other items on the meeting agenda include ensuring bargaining autonomy under the multiple union system, legislating industry-level bargaining, and abolishing provisions regarding minimum services. Plans are in place to propose reform of the labor law during the special National Assembly session in April 2011.
Considering the ban on payment of wages to full-time union officials and introduction of the multiple union system as groundbreaking achievements in the field of industrial relations, the government is firmly determined to enforce the current law. With the national center’s financial problems due to the implementation of the time-off system, the two umbrella unions’ capability to fight has been weakened. It may also be difficult for labor communities to handle a serious struggle because most workers are indifferent to the wages of full-time union officials.
After the multiple union system comes into effect on July 1, 2011, it is feared that industrial relations might deteriorate due to the establishment of new trade unions and overheated competition between these multiplying unions to increase the number of their members and attain the bargaining right. There will also be a phenomenal rise in bargaining costs caused by a more complicated bargaining system.
The FKTU is concentrating its efforts on maintaining the integrity of its member organizations by prohibiting workers from membership with duplicate unions, and protecting the vested rights of majority trade unions etc. Meanwhile, the KCTU plans to establish trade unions in companies where none exist, those with only small trade unions, and subcontracted companies.
It is therefore urgent that companies actively prepare measures to stabilize labor relations by improving their labor management systems.
With a taskforce in operation, the KEF has been developing measures to handle the multiple unions. The KEF will also form a ’negotiation support team’ to help member companies in collective bargaining, and promote consultations for stable labor management.
Pro-labor tendency of some politicians may increase instability of industrial relations at the workplace level
Recently, some politicians have shown a strong leaning toward labor, in one case intervening in labor issues at Hyundai Motors with a press conference regarding striking subcontract workers, and in another, conducting a field survey on a strike at Hanjin Heavy Industries. In addition to this, at a recent special session of the National Assembly, opposition parties requested a hearing on Hanjin Heavy Industries, Hyundai Motors, Ssangyong Motors, and Jeonju Bus, and attempted to initiate a fact-finding committee to look into the situations at these companies.
With general elections coming in 2012, the instability in industrial relations will likely get worse as politicians will probably summon business leaders as witnesses during the Assembly inspection of government offices, as well as make visits to trade unions at workplaces with labor disputes to make promises for settlement.
Major business associations release joint statement on current industrial relations
The KEF and 4 other major business associations released a joint statement requesting the government to firmly counteract illegal actions in the workplace, politicians to cease intervening in labor issues and engaging in politically-driven friendliness with labor, and labor communities to stop the fight over the use of subcontract workers, as these practices are not helpful at all in overcoming the current economic difficulties and stabilizing industrial relations.
Business standpoint on current industrial relations
Forecasts are that the Korean economy will face many difficulties due to external and internal uncertainties. External uncertainties include instability in oil-producing Middle East nations, the sudden rise in raw material prices, and the European financial crisis, which together make it difficult to achieve the 5% economic growth target. Internal uncertainties such as household debt and price inflation among other things are also expected to hinder Korea’s economic growth.
Moreover, current unstable economic conditions could hurt employment levels and company investments which have up to now been successful despite the global financial crisis. Particularly, the labor market may face chaos and depression if industrial relations lose their stability amidst unstable economic circumstances.
It’s time for all economic participants to do their utmost towards building a sound foundation for economic growth. The government needs to deal firmly with illegal actions from some in the labor community to stabilize industrial relations. Political intervention in labor disputes has been increasing recently, and companies likely face more intervention as the presidential and general elections draw near.
Politicians must immediately stop this intervention, as it only creates more expectations from labor communities and prolongs disputes. Labor communities, in turn, must do their part in stabilizing industrial relations as a responsible economic participant, and not take advantage of current circumstances to fight.
Business would like to express the following views and encourage all economic participants to work together towards economic development and stable industrial relations.
First, the government needs to deal firmly with illegal actions in the workplace, keeping in mind that public order is essential for economic growth.
Stable industrial relations precede economic stability and sustainable growth. In particular, creating a respect for the rule of law is necessary, as much illegal activities and confusions are expected when the multiple union system is implemented from July 1st, 2011.
The labor community has engaged in illegal strikes from last year, calling for layoff plans to be cancelled, and direct employment of subcontracted workers to primary contractors, etc. If the government does not handle these situations according to law, labor communities would assume the government is losing authority, as in the case of the past administrations when they approached the end of their terms. Therefore, understanding that law-abidance in workplaces and stable industrial relations are of paramount importance, the government must deal with these situations according to law and principles, to minimize the possible chaos after implementation of the multiple union system, and achieve economic stability.
Second, intervention by the political community in labor relations at workplaces and political moves that favor labor should immediately cease.
Some politicians have asked for hearings on workplaces with disputes, and have made visits to those workplaces.
Whether it is intended or not, excessive political interference, like visiting trade unions in the midst of labor disputes with promises of settlement, and calling labor issues at certain companies social issues, incites illegal activities by trade unions. This interference only serves to damage communication between labor and management, and hinders resolution of the problems. Thus, politicians should not be part of labor’s distorted propaganda by intervening in industrial disputes.
Third, labor should immediately cease fighting over subcontract work.
Disputes and controversies over the use of subcontract workers have continued since the Supreme Court ruling last year stating subcontract workers at Hyundai Motors were illegally dispatched. The business community is concerned that workers are bringing class actions against their primary contractors over their worker status. In particular, labor communities are trying to include subcontract issues in non-regular worker issues. Since subcontract workers are regular workers of the subcontractors, and not non-regular workers of the primary contractors, labor communities should stop distorting the nature of the subcontract issues and instigating conflict.
The Supreme Court ruling overemphasizes the exertion of the right to direct work, and regards fair cooperation between subcontracted workers and the primary contractor as work directions under a dispatch contract, which does not fully reflect the changes in industrial settings. In particular, the Supreme Court is causing chaos with two contradictory rulings: one in 2006 stating that subcontract workers were legally dispatched to the same company, and the other in 2010 stating that the workers were illegally dispatched. The Supreme Court needs to judge carefully and consistently, based on a good understanding of industrial settings.
Advanced countries are promoting job creation and company competitiveness by recognizing various production methods in consideration of economic and industrial changes, and their courts make appropriate judgments as to the legitimacy of using subcontract workers. In keeping with this world trend, Korea should also move away from a single standard in judging the legality of subcontract employment, and accept that production methods are diversifying, which will improve company competitiveness.
In conclusion, business will exert itself to rise above current difficulties and drive Korea towards joining the ranks of advanced nations through job creation and shared growth.