Labor talks to resume grudgingly

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Labor talks to resume grudgingly

Under pressure from the government, unions decided to return to the negotiating table to discuss labor market reforms that they firmly rejected four months earlier.

Although a meeting among representatives of labor, companies and the government is expected to take place within the week, unions are maintaining a hard line on the two most sensitive issues on the table: adopting the so-called peak wage system and making dismissals of underperforming employees easier.

“The leadership persuaded the hawks to return to the talks first and then resume discussions on the two issues later,” a member of the leadership of the Federation of Korean Trade Unions (FKTU) told the Korea JoongAng Daily by phone. “But the hardliners, mostly from the metal, government-run companies and chemical unions, haven’t agreed on the issues.”

The FKTU, one of Korea’s two major umbrella union groups, was supposed to hold a leadership meeting last week to make a final decision on the talks. But its leadership could not even enter the meeting room due to a sit-in protest by about 100 hardliners protesting the resumption of talks with the government and companies.

Even at a central executive committee meeting on Wednesday, in which representatives of unions in all industries and sectors made the decision to return to talks, some protestors held banners reading, “[FKTU] President Kim Dong-man should not betray the members” and “Are you more afraid of the Blue House than the one million members of the federation? The return to talks puts the FKTU in President Park Geun-hye’s pocket.”

Labor reform is part of Park’s ambitious plan to reform four sectors in the country: labor, finance, public administration and education. Labor reforms are intended to create more jobs for young jobless people, a serious social problem in Korea, by cutting the wages of senior staff approaching retirement and allowing management to lay off underperforming workers.

Still, the trilateral negotiations did not resume on Wednesday. The talks are basically an arbitration process by the Economic and Social Development Commission, a body under the Blue House.

The trilateral meetings of the past will be expanded to four-party talks with the participation of Minister of Employment and Labor Lee Ki-kweon.

The federation’s return came after Employment Minister Lee effectively laid down an ultimatum at a press meeting on Aug. 20, saying, “If the federation doesn’t return to the table by Aug. 26, the government will unilaterally push the labor reforms.”

The government is threatening to complete legal procedures to legislate the peak wage system and layoff of underperforming workers by the end of this year. Korea’s retirement age will be extended to 60 starting next year, and that is closely connected to the peak salary system. Many unions have already accepted the peak wage system in return for a legally guaranteed extension of the retirement age.

“As we have discussed these issues a lot already, there will be no difficulty in speeding up matters,” said Kim Dae-hwan, head of the presidential commission.

But the possibility of further disputes remains. At Wednesday’s central executive committee meeting, FKTU members agreed to make all decisions on further negotiations at central executive committee meetings and not allow them to be made by their leadership.

“If there is no plan B, there will be no plan A,” said Lee Chae-pil, a former employment minister. “The government should consider the possibility of failure in further talks and prepare its own plan.”

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