Signs of 'Labor Conflicts' Under the Yoon Administration... Risks of Wages, Disputes, and Industrial Accidents Everywhere

Abolition of Impi System in Public Institutions by the Tripartite Commission
Labor Director System and Other 'Labor Challenges' Abound

Authorities May Use 'Illegal' Logic to Violate Judgments
Possibility of Comprehensive Pressure on Companies

The scene of the 'Labor Rights Without Discrimination' struggle declaration unit union representatives' resolution rally held by the Korean Confederation of Trade Unions (KCTU) on March 24 at Cheonggye Square, Jongno-gu, Seoul. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chae-seok] As the POSCO branch of the Korean Metal Workers' Union (KMWU), affiliated with the Federation of Korean Trade Unions (FKTU), demands the company to rectify issues such as the forced resignation notices to reinstated union officials and the wage peak system, concerns are rising that the "labor black hole" could strangle corporate management even under the Yoon Seok-yeol administration. Since this is not an area where companies can simply handle matters like regulatory reform or new industry development on their own, but rather a sector requiring conflict resolution skills with stakeholders, many predict that regardless of the government's national policy philosophy, it will act as a corporate management risk.

According to industry and labor sources on the 5th, the KMWU POSCO branch is preparing a lawsuit to invalidate the wage peak system. The Federation of Korean Trade Unions (FKTU) has also shared internal guidelines to clearly oppose any attempts by management to implement the wage peak system. On the 30th of last month, 15 labor and civic organizations, including the Social Solidarity Forum, issued a statement opposing the company's recommendation for the forced resignation of Han Dae-jung, the senior branch chairperson of the Metal Workers' Union.

Inside and outside the industry, attention is focused more on the content than the intensity of the dispute. First, regarding the wage peak system lawsuit, it is a core issue that shakes the foundation of corporate personnel and compensation systems, drawing significant interest. The Supreme Court ruling that mechanically applying the wage peak system simply because of age without reasonable grounds is invalid has considerable influence. In POSCO's case, since 2011, the retirement age was extended from 56 to 58, and reemployment was guaranteed from 59 to 60, but the wage peak system was introduced, suspending seniority increases from age 57 and cutting wages by 10% from age 59.

The protest against the forced resignation of retired union officials is also significantly influenced by the labor policies at the end of the Moon Jae-in administration, which greatly expanded the right to strike for "non-working union members." A representative case is last year's ruling that unions including the Korean Teachers and Education Workers Union (KTU), which include dismissed members (non-working union members), are "not illegal unions," with the government's authority to declare otherwise removed.

Since the passage of the three labor laws (Labor Union Act, Public Officials Union Act, Teachers Union Act) through the National Assembly's Environment and Labor Committee at the end of 2020, justified by ratifying the International Labour Organization (ILO) core conventions, there have been favorable rulings for labor across the board, including the abolition of the "not illegal union" (strike) notification system, the Serious Accident Punishment Act (industrial accidents), and the Supreme Court ruling on the wage peak system (wages). This has led to corporate complaints that if companies violate the judgments of legislative and judicial authorities, they face comprehensive pressure under the logic that such acts are illegal.

A bigger problem is that there are still many major labor-related issues to be resolved in the future. Representative examples include the public institution wage peak system and the public officials' time-off system (full-time union officials) currently under discussion at the Economic, Social and Labor Council (ESLC), and the nationwide employment insurance system to be fully launched early next year. Even though the ESLC is a social grand compromise body, it cannot ignore the opinions of political circles and government insiders during decision-making. For this reason, once public institution labor policies are adopted, their spread to the private sector is considered a matter of time.

Regarding the public institution wage peak system, discussions are underway for its complete abolition, and along with the recent Supreme Court ruling, it is expected to cause significant ripple effects depending on the level of future discussions. The labor director system, combined with the spread of stewardship codes in the financial sector and shareholder-centered stakeholder capitalism, could emerge as a major variable in corporate management.

As for the nationwide employment insurance system, it could lead to uncontrollable variables such as increased costs for companies and the government, a rise in "free riders" who only collect benefits, and a decline in workers' motivation due to an increase in "N-jobbers" (people holding multiple jobs) amid employment market downturns. Unlike the Yoon administration's enthusiastic push for "new industry development and regulatory innovation," this issue is likely to follow a pattern where labor protests begin as soon as related issues spread, rather than the government pushing forward and the ruling party (political circles) accepting it.

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