Labor Trends

Industrial relations have been stable recently, but the number of lost work days has increased year-on-year due to prolonged disputes in some workplaces.

	As of June 8, 2011	Same period, 2010
No. of labor disputes	16 cases	20 cases
No. of lost work days	152,415 days	115,362 days

Amid the continuing dispute in Hanjin Heavy Industries, Hyundai Motor is  starting its wage and collective bargaining in earnest, and the Korean Metal Workers Union (KMWU) has announced a strike. Given all this, industrial relations are expected to deteriorate during the second half of this year.

With only a few days left before the implementation of the enterprise-level multiple unions system, trade unions are stepping up their attempt to revise the Trade Union Act (Trade Union and Labor Relations Adjustment Act) again through politics. The Democratic Party is resuming its efforts to bring the revision bill before the National Assembly. At the same time, it is finding a way to hold a hearing on five major labor issues at the Environment and Labor Committee in case it cannot bring up the bill.

Both the national trade union centers (FKTU and KCTU) are increasing their pressure on political circles in protest against the Environment and Labor Committee’s refusal to propose the bill to the National Assembly. The FKTU has urged the Grand National Party to immediately discuss the bill at the National Assembly, and repeatedly emphasized that the re-amendment issue will be tied to the general and presidential elections in 2012. The KCTU, too, has called on the National Assembly to set up a seven-party dialogue channel and immediately discuss the issue.

Meanwhile, the trade unions and four opposition parties held a labor policy meeting on June 15 where they discussed how to bring up the revision bill in the National Assembly during the extraordinary session in June. As part of the labor policy meeting on June 20, the presidents of the both national union centers gave a press conference to urge the submission of the revision bill to the National Assembly, and had a talk with the chairman of the Environment and Labor Committee. Labor circles are also making preparations for the possibility that the bill fails to be passed during the June session. They have started devising measures in response to the enterprise-level multiple unions system taking effective from July 1 and protest plans for the revision of the Trade Union Act, targeting the regular session in September and the next general and presidential elections.

Major industry-level trade unions started their summer struggles in late June, intensifying instability in industrial relations. KMWU plans to go on a general strike in early July after a strike ballot on June 22~24. The Korean Construction Workers Union (KCWU) staged a strike in the Seoul Square on June 22 to push through its wage and collective bargaining demands. KCWU demanded to adjust supply and demand of construction machinery; to take measures to eradicate the problem of overdue wages; to accept wage and collective bargaining demands from its branches for tower crane workers and power cable workers; and to extend the coverage of industrial accident compensation insurance to those in special types of employment.

 KCWU’s branch for tower crane workers conducted a one-day warning strike on June 7, demanding the participation of all of the 207 companies in its industry-wide bargaining and a 5% wage increase and the preferential hiring of union members. The Korean Federation of Public and Transportation Workers Unions launched the Korean Transportation, Public and Social Service Workers Union (KPSU) on June 24. However, its membership reached only 50,000 as the trade unions of large public-sector firms, such as KORAIL and electric power corporation, took a passive position on joining the industry-wide trade union.

Industry-level bargaining in the financial services sector has been deadlocked on the issue of wage increases. In this situation, bargaining at the level of individual banks is bringing to the surface labor-management conflicts over the introduction of performance-based pay schemes and the government’s move to create a mega bank. During this year’s industry-level bargaining in the financial sector, there is a wide difference of opinion between labor and management on how much wages should be raised. The Korean Financial Industry Union (KFIU) is demanding a more than 8% wage increase and the restoration of new recruits’ starting salaries to their original levels. On the other hand, the management is insisting  on  a

2 % wage increase for state-run banks and a pay freeze for commercial banks. Moreover, the management wants to conduct bargaining with state-run banks and commercial banks separately and takes a negative view of restoring starting salaries to their original levels.

This year’s bargaining with individual banks (Enterprise-level bargaining between individual banks and KFIU’s branches is conducted in parallel with industry-level bargaining.) has not started yet. Woori Bank, SC Cheil Bank and Kyongnam Bank are still in the process of enterprise-level bargaining started last year. In particular, Woori Bank, SC Cheil Bank and Korea Exchange Bank face growing labor-management conflicts over the introduction of a performance-based pay scheme and employment insecurity that could be caused by restructuring.

Bank	SC Cheil Bank	Korea Exchange Bank	Woori Finance Group
Issues	Wage increase & opposition to the introduction of  performance-based pay scheme	Opposition to its merger with Hana Bank	Opposition to its merger into Korea Development Bank Financial Holding Company