[OUTLOOK] A Crushing Defeat for Management

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[OUTLOOK] A Crushing Defeat for Management

Draft Revision Signals Management's Failure to Resist
Pressure from Government And Labor


The government's habit of putting off controversial decisions has not changed. In the latest example, the Tripartite Commission of Labor, Management, and Government decided on a five- year delay on implementing a ban on the payment of wages to full-time union officials and on allow- ing multiple trade unions at the workplace. Bowing to pressure from labor, the government decided to put off the ban on wages for union officials, initially set to take effect next year - proof that it has no intention of putting the ban in effect. If it had plans of doing so, it would have decided on a shorter delay and reduced the scope of application, but instead it expanded the scope to allow officials of unions organized after March, 1997 be paid salaries by their companies, which would be punishable by law if the ban were in effect.

The decision has turned Korea into a strangely compassionate country where the people receive wages from the negotiating partners they battle against, and where the people hand money over to their abusers. Receiving wages from someone you are fighting is no different from receiving military aid from a country you are warring with. Refusing to make any efforts to stand on its own feet, labor concentrated on abolishing this ban despite the flawed logic.

The wages employers pay to union officials, whose duties consist solely of union affairs, have reached 300 billion won ($241million) a year. Management will essentially be contributing the money to the labor sector to strengthen its organization. The nation's businessmen must be either fools or saints to do so.

The latest decision represents management's failure to resist pressure from the government and labor. On February 16, 1998, the ruling party promised the Federation of Korean Trade Unions to abolish the ban on paying wages to union officials, which led to suspicions of a backroom trade-off for allowing companies to layoff workers. By coercing management, the ruling party was able to push ahead with the latest agreement, basically to keep its promise with labor. Consequently, management gained almost nothing from the recent agreement among labor, management and government. But press reports claim that management gained from the delay on allowing multiple trade unions at the workplace when in reality it gained nothing.

The logical foundation of allowing multiple trade unions lies in the freedom of association. As long as Korea is a member of the International Labour Organization and the Organisation for Economic Cooperation and Development, delaying this freedom is disgraceful in view of international standards.

The core issue at forming multiple trade unions is related to allowing unions collective bargaining rights or having them create a single negotiation channel for bargaining with management, as in the United States. The labor sector insists on the former, management calls for the latter, and the government, caught between the two, decided to put off this issue when it amended the labor law in March 1998. In the United States, the union with the majority membership represents other unions, which essentially invalidates the existence of multiple unions. If each unions has collective bargaining rights as labor insists they do, the employer will have to spend the entire year bargaining with different unions. Great confusion will ensue if each union makes different demands, this is the reason management objects to collective bargaining powers.

But even if multiple unions are allowed, they can basically exist as a single union when one channel of negotiations is used. If the employers are prohibited from paying wages to union officials, with their salaries coming from the union instead, the smaller unions will dissolve, as in Japan.

If employers are prohibited from paying wages to union officials starting next year, as originally planned, there will be initial confusion but multiple unions might not necessarily pose a major threat to businesses. Although the labor sector insists on the right to form multiple unions, it does not really welcome it in some aspects. Neither the Federation of Korean Trade Unions nor the Korean Confederation of Trade Unions, the two largest umbrella unions, wishes to see the emergence of rival unions at work sites where they are dominant. Depending on the perspective, some unionists find the prospect of multiple unions even more disagreeable than management.

And thus the claim that the recent agreement at the Tripartite Commission was fair is a fallacy. It was nothing but a crushing defeat for management. As the current administration had intended, management was dragged around by the government and labor. Representatives of management at the Tripartite Commission committed the blunder of setting back normal labor-management relations. They should take responsibility for tarnishing the nation's labor history. Politicians should not relegate the responsibility solely to the Tripartite Commission, but revise the law so that labor-management relations can catch up with international standards.

The writer is the chairman at KSS Line Ltd. and vice chairman at Korea Society for Business Transparency.

by Park Jong-kew

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