Labor Trends

1. KCTU increases action against conglomerates

 

The Korean Confederation of Trade Unions (KCTU) has scheduled action against conglomerates from 21 to 27 May and held a rally against several major companies.

Together with progressive civic groups, the KCTU plans to bring further attention to indirect employment, and the internal reserves held by large corporations

 

[Table 1] The KCTU: Major Plans for Action against Conglomerates

Date	Target	Details
May 23	Korea Employers Federation (KEF) Federation of Korean Industries (FKI)	–  KEF: Rallies on minimum wage * Rallies and announcement during commute times – FKI: Press conference to denounce conglomerates
May 24	Samsung Electronics	– Rallies on occupational illness in Samsung Electronics’ Semiconductor Division
May 25	Lotte Shinsegae	– Rallies on retail companies damaging local markets and forced emotional labor
May 26	Samsung Electronics Service T-broad	– Rallies to demand direct employment from primary contractors including Samsung Electronics, T-Broad
May 27	Federation of Korean Industries (FKI)	– KCTU rallies to demand greater conglomerate accountability

 

The KCTU also plans to engage in activities with the cooperation of pro-labor parties in the 20^th National Assembly to push for legislation of bills to strengthen the accountability of conglomerates.

 

In particular, the KCTU seems to be pushing for cooperation with the Federation of Korean Trade Unions (FKTU) to form a consultative body for National Assembly activities. However, the FKTU is not likely to participate actively with the KCTU due to the potential for conflict between the unions.

 

2. Increased joint collective bargaining attempts to block introduction of the government’s performance-based wage systems in public institutions

 

On 10 May, President Park Geun-hye emphasized the need for introduction of performance-based wage systems in public institutions. The Ministry of Strategy & Finance (MOSF) has decided on incentives for institutions with ‘excellent’ performance-based wage systems and for ‘excellent’ management policies at institutions without performance-based wage systems.

 

The MOSF plans to provide incentives within the range of 10% ~ 30% of basic monthly pay to institutions (10 ~ 20 institutions) it deems to have ‘excellent’ performance-based wage systems, after evaluating their introduction periods and details of that introduction. On the other hand, the MOSF decided to freeze labor subsidies for 2017 to institutions without performance-based wage systems and impose a penalty on heads of public institutions after evaluations.

 

On 10 May, a Joint Public Sector Committee under the two umbrella unions held a press conference to announce its revival and gave notice of its intent to carry out a large-scale outdoor rally on 18 June and a general strike in September.

* The Joint Public Sector Committee is composed of: the Korean Financial Industry Union (KFIU), the Federation of Korean Public Trade Unions (FKPTU), and the Federation of Korean Public Industry Trade Unions (FKPITU), all under the FKTU; and the Korean Public & Social Services & Transportation Workers’ Union (KPTU), and the Korean Health & Medical Workers’ Union (KHMU), both under the KCTU.

 

3. Concerns over worsening industrial relations and a decline in management efficiency at public institutions as Seoul City plans to introduce labor representatives on the boards of directors in its affiliated institutions

 

Seoul City plans to elect 1 ~ 2 labor representatives to the boards of directors in 15 affiliated institutions, including SH Corporation, from October this year, and to have these labor representatives participate in board meetings when dealing with activities such as business plans and disposition of property.

 

However, Seoul City’s decision to introduce these labor representatives will have undesirable side effects, such as hindering public institution reform and rapid decision-making by these boards of directors, and ignores the reality of industrial relations and the market economy in Korea.

 

Public institution unions are also expected to use these labor representatives to fight introduction of performance-based wage systems and fair human resource management system.

 

4. Anxiety grows in the shipbuilding industry regarding deteriorating industrial relations as unions plan to demand high wage hikes and engage in joint labor action despite the crisis in the industry

 

On 10 May, labor and management of Hyundai Heavy Industries held wage negotiations and labor demanded an increase to basic pay of KRW 96,712 per month.

 

Also on 10 May, labor and management of Daewoo Shipbuilding & Marine Engineering held wage negotiations, where labor demanded job security for workers (including those at its in-house subcontractors).

 

On the same day, the union at Hyundai Samho Heavy Industries, which is a branch of the Korean Metal Workers’ Union (KMWU), demanded an increase to basic pay of KRW 152,050 per month and to allow all union members to go on training programs abroad.

 

[Table 2] Major Union Demands for Wage Negotiations 2016 (Shipbuilding Industry)

Hyundai Heavy Industries Union	Daewoo Shipbuilding & Marine Engineering Union	Hyundai Samho Heavy Industries Branch Union
– Increase basic pay by KRW 96,712 per month (excluding seniority-based pay) – Performance-based bonus of 250% + an increase in additional allowances – Hire as many new workers as those who have resigned or have had to leave(including retirees)	– Increase wages through system improvement (specific amount not suggested) – Provide job security for workers (including those at in-house subcontractors) – Increase summer vacation bonus	– Increase basic pay by KRW 152,050 per month – Performance-based bonus of 250% + an increase in additional allowances – Allow all union members to go on training programs abroad (200 or more per year)

 

The Federation of Shipbuilding Industry Unions plans to hold joint strikes against government restructuring of the shipbuilding companies.

 

[Table 3] Federation of Shipbuilding Industry Unions: Demands

– Punish chief executives and stop restructuring of shipbuilding companies immediately – Establish government support policies regarding shipbuilding contracts – Assist shipbuilding industry workers through designation of the industry for special employment assistance – Form a consultative body involving the government, the KMWU, and the Federation of Shipbuilding Industry Unions – Major shareholders of Hyundai Heavy Industries to contribute some of their private property to assist the company

 

The Federation of Shipbuilding Industry Unions plans to go on strike in Seoul in June and raise the issue of industry restructuring through meetings with political parties.