Financial Labor and Management Quickly Resolve Crisis... Challenges Remain in Branch Reduction and Simultaneous Lunch Break Usage

Final Agreement on Financial Labor-Management Sectoral Central Negotiations
Conflicts Remain... Sparks Left for Next Year

[Asia Economy Reporter Kiho Sung] Although the urgent issue was resolved as the labor and management in the financial sector reached a final agreement on sectoral central negotiations, it is evaluated that many challenges remain ahead. This is because no conclusion was reached on major contentious issues such as measures to reduce branch offices and simultaneous use of lunch breaks, excluding wages. The general strike scheduled for the 15th has been canceled, but conflicts are expected to continue in next year's negotiations.

According to the financial sector on the 12th, the National Financial Industry Labor Union (Financial Labor Union) and the Financial Industry Employers' Council (Employers' Council) held a signing ceremony on the 7th where six representatives from labor and management each in the sectoral negotiation delegation gathered to sign the final agreement. The financial labor and management underwent a total of 59 marathon negotiations over the past six months, including 10 representative negotiations, 5 negotiation delegation meetings, and 44 working-level negotiations.

Through the negotiations, the financial labor union agreed to increase wages by 2.4% on a total amount basis this year. Low-wage job groups will receive increases above the standard increase rate of each institution. Each financial institution will enter into negotiations based on the financial labor-management negotiation standards. A banking sector official said, "Since the financial labor-management negotiations have been completed, from now on, negotiations will proceed at each company level," adding, "It is expected that the consultations will be completed around the end of this year."

Although the risk of a strike was avoided as the financial labor and management dramatically agreed on negotiations, elements of conflict still remain. The union has been demanding measures in response to the continuous closure of branches, mainly in commercial banks, as the non-face-to-face era accelerated due to COVID-19.

According to data submitted by the Financial Supervisory Service to Democratic Party lawmaker Dongsoo Yoo, as of the end of June this year, the number of branches of commercial banks, regional, and special banks was 6,326, showing a closure of 775 branches (10.9%) compared to 7,101 at the end of 2016. In five years, one out of ten bank branches closed. The financial labor union has continuously demanded related measures, stating that the reduction of branches adversely affects the convenience of financial use for the elderly and vulnerable groups and negatively impacts employees' jobs and workload. However, no concrete conclusion was reached in this negotiation either, and it was decided to continue discussions in the 'Labor-Management Joint Task Force (TF) for Preparing for the 4th Industrial Revolution.'

The issue of 'suspending operations during lunch breaks' also remains at a standstill. When this issue emerged as a key point in last year's labor-management negotiations, the financial labor union agreed to conduct a fact-finding survey and pilot operation, but no further discussions took place afterward. The union advocated for prioritizing the introduction of this policy in branches with seven or fewer employees, warning of strikes, but ultimately, it was decided to leave it to the discretion of banks and financial companies.

The financial sector believes that additional discussions will be difficult as the financial labor and management have not reached a conclusion. Therefore, the reduction of branches and the simultaneous use of lunch breaks are expected to remain contentious issues in next year's negotiations. A financial sector official said, "The two issues mentioned earlier should be seen as agreements at a fundamental level," adding, "Last year, negotiations also failed, and related matters were discussed in the TF but no significant conclusion was reached, so these topics will come up again at the negotiation table next year."

This content was produced with the assistance of AI translation services.