FSS Shaken by Public Institution Designation... Facing a 'Total Crisis' Amid Pressure from Major Labor Federations

Employees of the Financial Supervisory Service, who are set to transition into a public institution in January next year, are now facing concerns not only about the transition itself but also about mounting pressure from the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions. This is because both major labor unions are pressuring the Public Institution Management Committee (currently under the Ministry of Economy and Finance) to grant them authority to participate in the committee’s budget management guidelines and organizational management meetings.

On the 21st of last month, members of the Public Transport Union affiliated with the Korean Confederation of Trade Unions held a rally for irregular workers' struggle in front of Seoul Station. Photo by Yonhap News Agency

원본보기 아이콘

According to the financial sector and labor circles on September 10, the Joint Countermeasures Committee for the Public Sector, comprised of the Public Federation under the Federation of Korean Trade Unions and the Public Transport Union under the Korean Confederation of Trade Unions, issued a statement on September 8. In this statement, they called for the passage of the amendment to the Government Organization Act, the establishment of a Public Institution Compensation Committee, and amendments to the Public Institution Management Act to enhance the independence and representation of the Public Institution Management Committee during this month's regular National Assembly session. If the Compensation Committee is established, both major labor unions will be able to participate in the preliminary review process for the committee’s budget management guidelines. In addition, public institution workers will also be included as members of the committee’s management board. In short, this opens the door for public sector unions from both major labor federations to become deeply involved in budget and organizational management decisions of the committee.

About 2,100 employees of the Financial Supervisory Service and the current Financial Consumer Protection Bureau (which will be reorganized into the Financial Consumer Protection Agency next year) are closely monitoring statements and activities related to the committee by both major labor unions. This is because, in addition to the numerous new regulations already expected from the transition to a public institution-such as budget controls, reduced welfare benefits, workforce downsizing, fewer promotion opportunities, and strengthened ESG (Environmental, Social, and Governance) disclosures-there is now the risk of both direct and indirect pressure from the two major labor unions.

A Financial Supervisory Service official said, "Although it is just a statement for now, considering the government's tendency to strengthen labor regulations, there is a possibility that working conditions could worsen after being designated as a public institution." The official added, "Employees are already anxious about the organizational restructuring, and if regulations from the committee become even stricter, not only will morale decline, but there are also concerns that younger investigators may leave for the private sector."

Sehun Lee, Senior Deputy Governor of the Financial Supervisory Service. Photo by Chaeseok Moon

원본보기 아이콘

Not only are both major labor unions a concern, but ambiguous statements from the Financial Supervisory Service’s internal management are also heightening employee anxiety. On September 8, Senior Deputy Governor Sehun Lee stated that, following the separation of the Financial Consumer Protection Agency, the organization is considering "not just simple secondments, but actual changes in employment." However, employees are worried that this means they will be forced out to the new agency. Lee also said, "When implementing organizational changes, the basic principle is to allocate personnel from the 'current status' to the new agency," and admitted, "It will be realistically difficult to fully reflect the wishes of all (Financial Supervisory Service) employees." This has become a point of contention.

Most employees interpreted this as meaning that the majority of the 400 employees currently in the two bureaus under the Financial Consumer Protection Bureau, out of the Financial Supervisory Service’s total of ten bureaus, would be transferred to the new agency, while the remaining 1,700 employees in the other eight bureaus (banking, securities, insurance, small and medium finance, etc.) would experience minimal movement. Many employees have responded sharply, saying this effectively divides and discriminates between the two bureaus and the other eight, calling it a form of "splitting."

A Financial Supervisory Service official said, "Lee’s remarks are being interpreted to mean that even employees who have spent most of their careers in banking, securities, insurance, or small and medium finance, but are currently assigned to the Financial Consumer Protection Bureau, will have to move to the new agency next year." The official continued, "As the perception of splitting between the Financial Consumer Protection Bureau and other bureaus grows, so does internal conflict." Another official added, "Employees believe that Lee’s remarks reflect the intentions of the Governor, and currently, employees in the Financial Consumer Protection Bureau are expressing strong dissatisfaction."

Financial Supervisory Service Headquarters, Yeouido, Yeongdeungpo-gu, Seoul. Financial Supervisory Service

원본보기 아이콘

In the worst-case scenario, there are concerns not only about the departure of young investigators but also about a possible shortfall in new employee recruitment next year. On August 25, the Financial Supervisory Service announced plans to hire 66 new comprehensive employees (Grade 5) for next year. Based on the second written exam’s major subjects, the plan is to recruit 24 in business administration, 16 in law, 12 in economics, 7 in information technology, 4 in statistics, 2 in financial engineering, and 1 in consumer studies. Even in the open recruitment process, only one candidate with a major in consumer studies is being hired, reflecting the low demand and popularity for consumer-related positions within the organization.

The organizational restructuring set for January next year is being criticized as a decision that completely overlooks these organizational realities, and it is said that the current management (Governor, Deputy Governors, etc.) has accepted this. On the Financial Supervisory Service’s job community boards, posts are already appearing questioning "why anyone would want to join the new public Financial Consumer Protection Agency."

A Financial Supervisory Service official said, "The concern that top talent will avoid working at the Financial Supervisory Service has been a core argument made by the labor union and all employees since the launch of the National Policy Planning Committee, and it is already becoming reality." The official added, "Many employees are now worried not only about current staff transfers and departures but also about the possibility of a shortfall in new employee recruitment through open competition."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.