Making layoffs fairer

Hanjin Heavy Industries and Ssangyong Motor are back in the headlines with contract and laid-off workers resorting to extreme measures such as protesting atop power pylons, hunger strikes and even suicides. Their desperate and self-destructive demonstrations have brought back the so-called Hope Buses, which ferry hundreds of sympathizing labor activists across the nation to the sites of their protests.

We can look to Europe, which has been through similar labor unrest, for inspiration as to how we can make a breakthrough in our labor conundrum. Seven years ago, British leftists and unionists issued a statement to underscore why British workers are in greater danger of being laid off than their French counterparts.

I have added the conditions in Korea to accentuate the comparison.

First of all, French employers are required to inform employees of their being laid off five months in advance. The British give a three-month statutory notice and Korea 50 days.

Second, management in France is bound by the law to go through a certain number of discussions with labor before downsizing. Such regulations do not exist in Britain or Korea.

Third, in the case of France, a labor union can hire an outside auditor to examine the state of management to see whether layoffs or downsizing are justifiable. This decision is entirely up to the employer’s conscience in Korea.

Fourth, the French government can contain the scale of an industrial downsizing depending on the management’s efforts to turn its operation around. Our Labor Ministry in Korea only interferes if the layoff violates the law.

Fifth, France pays an average of 170 million won ($160,000) per employee in compensation. Such compensation packages do not exist in Korea.

Sixth, French politicians put pressure on companies that resort to massive layoffs. In Korea, the ruling party heads for the wings and the opposition revs up the Hope Buses.

France’s redundancy programs and employment legislation are the result of a hefty price paid. French laborers are famous for violent protests. They throw Molotov cocktails, block streets and even kidnap management. In 2000, workers at a Cellatex factory in Ardennes demanding more money and new jobs dumped 5,000 liters of sulphuric acid into a stream that runs through France, the Netherlands and Belgium. It worked. The laid-off workers at Cellatex won generous compensation, and other French workers resorted to similar extremes. The transportation union of France threatened to pour toxic chemicals into the Seine.

There is no solution in sight for the problems of Ssangyong Motor and Hanjin Heavy Industries. Legislative interference and investigations do little help. Last year’s legislative hearing on the Hanjin Heavy crisis only caused more harm by increasing labor insecurity. The symbolism of the Hope Bus strike only fanned insecurities and fear about job losses.

It is hardly likely that the Ssangyong workers who have been protesting for nearly four years now will get their old jobs back. Even if the financial state of the automaker improves, they are last on the list. There are 90 people on paid leave, 455 on unpaid leave and 1,904 voluntary retirees. There has been no promise about when the workers on unpaid leave can return to work. It would be better for the state to claim the industrial site as an unemployment zone and use public funds to help the laid-off workers.

Our labor market does not work in a pyramid structure. Once dismissed from a permanent job, you are out alone in the cold. But large companies are bragging about their custom of downsizing.

It is time we approach layoffs reasonably and not merely with the utmost emotion. The reason why there are complaints and protests about layoffs is a lack of trust and transparency in the management’s decisions. The workers and management clash because they do not trust each other.

We need to re-examine the redundancy program altogether. First of all, I suggest giving advance notice of dismissals of at least three months. Workers will feel less insecure if they know their future earlier. Second, we need an independent audit body to scrutinize the state of the company to see if the management has done all it can through asset sales and capital restructuring to avoid a liquidity crunch before it implements downsizing. The workers too would better understand that a restructuring was unavoidable and be less resentful about the management decision.

Today’s world is turning crueler for workers. Gone are the days when a strong union could protect jobs. Companies must set aside employment insurance funds to prepare for rainy days. But we no longer trust the money with the Employment and Labor Ministry, which used hundreds of millions of dollars from the funds to build training centers.

In the longer run, we must rebalance the employment discrepancies. While some laid-off workers stake their lives to fight for their lost jobs, there are many who want to pocket early retirement funds and walk away from their workplaces. Teachers, soldiers and civil servants on public pensions can get more than 70 percent of their monthly income from the age of 60 to their dying day from pension funds.

Some people lose everything when they lose a job. Others enjoy retirements more comfortable than in Europe. This inequality must be fixed.

*The author is an editorial writer of the JoongAng Ilbo.

by Lee Chul-ho