From August, Public Institutions Implement Labor Director System... Labor Directors Must Resign from Unions

[Asia Economy Sejong=Reporter Kwon Haeyoung] Starting from August, the labor director system will be introduced in public institutions such as Korea Electric Power Corporation (KEPCO) and the Korea Deposit Insurance Corporation (KDIC). Public institutions that appoint executives must select labor directors, and workers appointed as labor directors are required to resign from their labor unions.

The Ministry of Economy and Finance announced on the 10th that it will deliver the "Guidelines on the Management of Public Enterprises and Quasi-Governmental Institutions," which include qualifications, authority, and duties of labor directors, to public institutions. This is a follow-up measure following the passage of the "Act on the Management of Public Institutions (Public Institution Act)" in February, which centers on the introduction of the labor director system, along with the legislative notice of the amendment to the enforcement decree on the same day.

The labor director system is a system that allows worker representatives to participate in corporate management, including decision-making processes of the board of directors. The biggest issue regarding the introduction of the labor director system in public institutions has been whether labor directors can maintain their status as union members. According to the new management guidelines, labor directors will no longer be able to maintain union membership. This takes into account the potential conflict with the current "Labor Union and Labor Relations Adjustment Act (Labor Union Act)," which stipulates that union members lose their status if they act on behalf of the employer. Labor directors are both workers and part of management. The business community has also argued that, considering the possibility of the labor director system spreading to private companies in the future, union resignation should be mandatory during the labor director’s term.

The amendment to the Public Institution Act passed by the National Assembly did not include provisions regarding the union membership status of labor directors, but the government has clarified the loss of union membership through these management guidelines. The fact that 14 local governments, including Seoul City, which have introduced the labor director system, mandate union resignation for labor directors was also taken into consideration. On the other hand, Europe, which has introduced the labor director system, does not have regulations that revoke union membership or force resignation, so some opposition from labor groups is expected. Additionally, the management guidelines include principles such as the labor director being unpaid and prohibitions against disadvantageous treatment.

The Ministry of Economy and Finance also announced the legislative notice of the amendment to the enforcement decree of the Public Institution Act, which stipulates the principles of the labor director appointment process. The labor director system will be implemented in public institutions that form executive recommendation committees (ERCs) after August 4.

According to the amendment to the enforcement decree, public institutions with a majority labor union must have the union representative recommend up to two candidates to the ERC. In cases where there is no majority union, up to two candidates who have obtained the consent of the majority of workers through direct, secret, and anonymous voting must be recommended. The ERC then selects one labor director from among the candidates.

The labor director system will be introduced in a total of 130 public institutions, including 36 public enterprises such as KEPCO, Incheon International Airport Corporation (Inkukgong), and KDIC, and 94 quasi-governmental institutions.

A Ministry of Economy and Finance official stated, "The government plans to continuously support the successful establishment of the labor director system in public institutions through workshops related to the introduction of the labor director system and labor director education."

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