Financial Labor-Management Negotiations Fail... Financial Union Preparing for Industrial Action

The National Financial Industry Labor Union held a branch representatives' meeting at the Financial Union conference room from 2 p.m. on the 12th and decided to submit a dispute to the Central Committee. Photo by Financial Union

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[Asia Economy Reporter Kiho Sung] This year's sectoral central negotiations between labor and management in the financial sector for wage talks have collapsed. The National Financial Industry Labor Union (Financial Labor Union) has entered into strike procedures starting this week, raising tensions between both sides.

According to the financial sector on the 13th, the Financial Labor Union held a branch representatives' meeting the day before and is currently conducting a central committee mobile vote for strike procedures today. This follows the union's declaration of breakdown after the fifth round of negotiations on the 8th failed to narrow the gap between the two sides. A Financial Labor Union official stated, "Voting will continue until 5 p.m. today," adding, "If the result is in favor, we plan to immediately apply for labor dispute mediation at the Central Labor Relations Commission."

Once the Central Labor Relations Commission initiates strike procedures and the union passes a strike vote among its members, if the commission decides to suspend mediation, the union will obtain a legal right to strike. The commission's mediation period is 10 days for general businesses and 15 days for public interest businesses. Since an extension of about 5 days is usually granted, the decision on suspension of mediation is expected around early next month.

Since the first sectoral central negotiation on April 20, labor and management in the financial sector have shown significant differences over wage increase rates. Initially, the Financial Labor Union demanded a 4.3% wage increase for regular workers and 8.6% for low-wage groups, but during negotiations, reflecting the Bank of Korea's recent inflation and economic growth forecasts, they raised their demands to 5.8% for regular workers and 11.6% for low-wage groups.

On the other hand, the management side insists on an increase rate below 1%. After proposing an initial 0.4% wage increase, they raised it to 0.9% following union opposition. The management argues that although some financial institutions have good performance, it does not reflect the overall financial sector atmosphere. They also contend that negotiations must align with payment capacity and the government’s wage increase guidelines for public officials. The government decided last September that this year's public official wage increase rate would be 0.9%.

With negotiations breaking down, the six agenda items proposed by the union to the Central Labor-Management Committee are also stagnating. Particularly, some agenda items include sensitive topics such as "simultaneous use of lunch breaks," making discussions expected to be difficult.

However, separately from negotiations, labor and management in the financial sector have gathered opinions and are implementing measures to prevent the spread of COVID-19. At the fifth negotiation on the 8th, they agreed as an emergency agenda that if the new social distancing level is raised to stage 3 or higher, banks and other financial institutions will temporarily shorten business hours by one hour. Following the government's decision on the 9th to raise social distancing in the metropolitan area to level 4, this agreement has been in effect since the previous day.

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