63% Noncompliance with Union Accounting Data Request... "Inviting Blind Distrust"

The Ministry of Employment and Labor requested labor unions above a certain size to submit financial operation data, but it was found that only about 37% complied. The government stated that unions are inviting distrust by engaging in 'black box accounting' and plans to start the penalty imposition process next month.

According to the Ministry of Employment and Labor on the 17th, out of a total of 327 unit unions and federations with more than 1,000 members, only 120 (36.7%) submitted accounting-related data as requested by the government.

Previously, the government operated a voluntary inspection period from December 29 last year to January 31 this year, and on the 1st of this month, based on Article 27 of the Labor Union Act, it demanded that the voluntary inspection results and supporting documents (cover page 1 page, inner page 1 page) be reported to the competent administrative authority by the 15th of this month.

Specifically, 54 unions (16.5%) did not submit any inspection results, and 153 unions (46.8%) submitted either the voluntary inspection results or the cover page but did not submit the inner pages.

The poor submission of accounting-related data by unions is analyzed to be due to the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU) distributing on-site response guidelines instructing refusal to submit inner pages in order to systematically resist the government's request.

In response, the Ministry of Employment and Labor pointed out, "Unions are failing to meet the high public expectations for accounting transparency and are instead inviting distrust as 'black box accounting' by violating current legal provisions related to accounting transparency."

However, despite the FKTU having prepared response guidelines at the federation level to refuse submission of inner pages in advance, 67 out of 173 unions subject to inspection submitted the inner pages.

By higher-level organizations, the submission rates were highest in the order of the National Federation of Trade Unions (Jeon-guk No-chong) / Daehan No-chong / non-affiliated (41.6%), FKTU (38.7%), and KCTU (24.6%).

By organizational type, submission rates were highest for enterprise unions, etc. (46.2%), followed by industrial unions and regional/sectoral unions (trans-enterprise unions) (30.4%), and federations and confederations (20.3%).

The Ministry explained, "Despite their large social responsibility, trans-enterprise unions and federations, which are relatively larger in scale than enterprise unions, had higher rates of non-compliance with current legal obligations."

The Ministry of Employment and Labor will administratively close the cases for the 120 unions that submitted data if there are no issues with preservation and retention, and will proceed with follow-up procedures for the 207 unions that either did not submit or partially submitted data, in violation of Article 27 of the Labor Union Act.

From today, a correction period of 14 days will be immediately granted to unions that did not submit data, and if not corrected, penalty imposition procedures will proceed. The penalty imposition process is expected to begin as early as the 15th of next month.

Even during the correction period and penalty imposition process, if related data is not submitted and no explanation is provided regarding document retention and preservation, on-site investigations will be conducted concurrently. If a union refuses or obstructs the on-site investigation, penalties can be imposed under the Act on the Regulation of Violations of Order.

Minister of Employment and Labor Lee Jeong-sik emphasized, "While encouraging unions to voluntarily correct illegal matters, we will also promptly proceed with follow-up measures for legal violations found during inspections."

[Image source=Yonhap News]

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