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Survey finds public institutions’ ‘party’ nowhere near over

Finance Minister Hyun Oh-seok demands that the public sector undertake management reforms during a meeting with heads of public institutions and companies last year.[JoongAng Ilbo]

Five months after the government’s strongest-ever move to root out lax management at public institutions, nothing much has changed.

According to a survey by the JoongAng Ilbo, 16 of 38 public institutions are unable to make reforms due to strong opposition from their trade unions.

Those institutions promised to cut their welfare budgets by at least half.

The survey found that each employees of the Korea Exchange, operator of the nation’s securities market, still receive about 115 million won ($111,000) in annual salary and 13 million won in benefits after Hyun Oh-seok, deputy prime minister and finance minister, warned, “The party for public institutions is over.”

In only six institutions have labor and management reached agreements on welfare cuts, the survey found. At 21 institutions, negotiations are under way.

Kim Young-hak, CEO of the Korea Trade Insurance Corporation, held 20 rounds of talks and had beer with all employees at least 14 times during the past five months. As a result, 67 percent of union members supported the company’s reform plan.

Grand Korea Leisure, which operates the foreigner-only casino Seven Luck in Samseong-dong, southern Seoul, also achieved an agreement between labor and management in February.

Among 304 public entities across the nation, the securities market operator’s annual salaries and welfare benefits were the highest, the survey found.

The Korea Exchange promised the Ministry of Strategy and Finance that it would cut welfare costs in half by late March.

But the union of the Korea Exchange opposes the cuts and demands the government remove the exchange from the list of public institutions.

“The Korea Exchange was originally a private institution,” said Yoo Heung-ryeol, commissioner of the trade union. “There will be no negotiation on welfare benefits unless the government promises delisting.”

As of yesterday, the Korea Exchange said CEO Choi Kyung-soo met with the trade union and agreed to the “basic principles” of the management’s normalization plan, according to an exchange spokesman.

Other institutions that have failed to carry out their promises are the Korea Securities Depository and the Korea Minting, Security Printing and ID Card Operating Corporation.

CEO of Korea Securities Depository, Yoo Jae-hoon, once said, “We will make painstaking efforts to cut welfare benefits.” But he is now blocked by a labor union that considers the government’s demand excessive.

The trade union of the Korea Minting, Security Printing and ID Card Operating Corporation has postponed the issue until a new CEO is appointed.

The other 13 organizations’ trade unions passed their bargaining rights to upper-level industrial unions, expressing their rejection of negotiations. Their intention is to strengthen their position by mobilizing larger unions, since individual unions can be deterred by the government or management. Those industrial labor unions that are members of the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions have created a joint committee of public institutions’ trade unions and demand direct negotiations with the Finance Ministry.

However, the Finance Ministry’s firm stance is that it cannot be a negotiator when it is a matter between labor and management.

Heads of the institutions that don’t make cuts could be dismissed through an evaluation in June and mid-term assessment in September.

“Employees of the institutions that fail to improve lax management will face wage freezes and no incentives next year,” said Chung Hyang-woo, director at the Finance Ministry.

BY KIM DONG-HO, SONG SU-HYUN [ssh@joongang.co.kr]