FKI "Hasty Promotion of Labor Director System... Concerns Over Expansion to Private Companies"

Federation of Korean Industries Expresses "Regret" Over Public Institution Labor Director System Bill Passing the Plenary Session

[Asia Economy Reporter Lee Hye-young] The Federation of Korean Industries (FKI) expressed regret on the 11th over the passage of the bill introducing the labor director system in public institutions at the National Assembly plenary session and urged for improvements to the system.

Right after the 'Amendment to the Act on the Management of Public Institutions' was processed in the plenary session, FKI released a statement saying, "Watching the labor director system in public institutions being hastily pushed forward, we cannot dispel concerns that it will lead to expansion of the system to private companies in the future," and "We earnestly request the government and the National Assembly to dispel these concerns and jointly seek ways to minimize side effects arising from the introduction of the labor director system."

FKI pointed out the domestic situation where conflicts and disputes between labor and management frequently occur due to strong labor unions, stating, "If the labor director system is introduced, it will not only hinder efficient management of public institutions but also, given the political activism characteristic of Korean labor unions, there is a high possibility that the political neutrality of public institution boards will be compromised."

They further criticized, "This also goes against the founding purpose of public institutions, which is to enhance public welfare."

FKI explained that the labor director system has been widely criticized overseas for reasons such as hindering corporate innovation, deterring foreign investment, delaying board decision-making, and infringing on shareholder interests.

The public sector labor director system law allows employee representatives of public institutions to participate in the board of directors with speaking and voting rights. Following the bill's passage, public enterprises and quasi-governmental agencies must appoint one non-standing director recommended or agreed upon by employee representatives to the board. Eligibility for public sector labor directors is granted to employees with more than three years of service, and the term is two years in total, renewable annually. Since the amendment will be enforced six months after promulgation, it will be fully applied in the field starting July this year.

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