KT wins by sticking to dialogue

At 3 a.m. last Tuesday, Lee Young-kyung, 60, chief executive of KT Corp., and Ji Jae-sik, 42, head of the fixed-line telephone giant’s labor union, were engaged in a marathon negotiation that had commenced at 2 p.m. the previous day. The talks over the union contract had started on June 16. It was their 27th meeting. A settlement hinged on the union’s demand that the company notify the workers 90 days in advance of the firm spinning off a division or outsourcing jobs ― and that the union be given the right to block any such plan. Mr. Lee, the chief executive, asked the union representatives: “Isn’t that a management decision, an exclusive right of the company?” Mr. Ji answered: “It is directly related to the survival of the union members.” “To be competitive in the fast-changing telecommunications market, a company must be able to change fast in its organizational structure. Why don’t we go with a ‘negotiate first’ policy?” Mr. Lee said. “The union exists for the company,” Mr. Ji said. “We accept.” And just like that, labor and management at KT reached agreement on the contract. Union members voted on the draft and passed it, and Mr. Lee and Mr. Ji signed the final document on Friday night. It marked the first peaceful settlement of a labor agreement since the company’s union was formed in 1994. KT stands out in the recent trend of labor negotiations at large Korean companies, which tend to end in scars following drawn-out disputes. Reaching an agreement without a strike is especially noteworthy because the phone company union is a major part of the Korean Confederation of Trade Unions, which has made its mark leading walkouts that often turn violent. “When people who use our services witness the scene where hundreds of workers are picketing, they might think, ‘When does this company find time to serve its customers?’ and the corporate image gets tainted,” Mr. Ji said. So before the time came to negotiate a new contract, he announced to the union members that he would not call for a walkout but would hammer out a deal through dialogue ― no matter how long it took. Both sides pointed to the wage talks as a good example of the new spirit of give and take at KT. The union initially demanded a 9.1 percent raise, while the company wanted to freeze wages for a year due to recent stagnant revenues and profit. In the end, the union accepted a 2 percent raise. In addition, workers who have been with the company long enough will be allowed to take a paid one-year sabbatical. It’s a win-win strategy: workers get paid time off, while the company saves on bonuses and overtime to senior employees. by Kwon Hyeok-joo