KB bankers to strike because their bonus isn’t big enoughFor the first time in 19 years, employees of KB Kookmin Bank have decided to go on strike.
The union representative of one of Korea’s leading banks said Friday that 96 percent of its union members agreed on Thursday to go on strike on Jan. 8.
On Thursday, 83.5 percent or 11,990 union members out of a total of 14,343 voted, with 11,511 agreeing to the walkout.
Since September, the bank’s union representatives have held negotiations on 12 occasions with management, but failed to reach an agreement on the wage increase, compensation and when the wage peak system will be adopted.
The union has requested mediation from the National Labor Relations Commission, but in two meetings the two sides have failed to overcome their differences and ended mediation on Christmas Eve.
After negotiations broke down, the union decided to strike.
Even with the mercury well below -10 degrees Celsius (14 degrees Fahrenheit), 5,000 union members gathered at the bank’s headquarters in Yeouido, western Seoul, on Dec. 26 to announce their plan to go on strike.
“An overwhelming numbers of union members supported the strike,” said a union representative. “We will hold a pre-strike event on Jan. 7 and gather in Seoul on Jan. 8 to go on a full strike.”
Ryu Je-gang, senior vice chairman of the bank’s union representatives, argued that management has failed to properly uphold previous agreements over the adoption of the wage peak system and allowing a one hour lunch break.
“They are trying to expand a wage cap system where an employee’s wage raise is limited if they fail to get promoted,” Ryu said. “If employees only focus on their performance results in the hope of getting promoted, it will lead to [employees] only selling products with high commission rates.”
He stressed that as a result, consumers will be negatively affected.
The tensions are especially high in regards to when the wage peak system is adopted.
The wage peak system involves capping the salary that senior employees can get after reaching a certain age. The goal of this system is to allow senior employees facing retirement to work for a longer period with a lower salary.
The union demands that the wage peak should be applied to employees from age 56, which is one year later than the government’s standard of 55.
The bank management agrees on starting the wage peak at 56, but claims that the system should be applied to both the vice branch manager and heads of department simultaneously. Usually, the adoption of the wage cap applies on average 5.5 months later for department heads compared to the higher ranking vice managers.
The union claims that having both the department head and vice manager makes raising the age at which the wage cap is applied meaningless.
The year-end bonus was another major issue. The union has demanded that the year-end bonus should be the same as last year’s at 300 percent of monthly wages, since this year the bank’s performance is at its best.
The bank, on the other hand, claims that it can’t give such a high bonus since it has failed to reach this year’s target and that 300 percent is extremely high compared to other banks.
The bank said the year-end bonus shouldn’t be based on how much the company has earned but whether its return-on-equity has reached 10 percent, which is an indicator of the bank’s efficiency.
“If we change the way bonuses are decided, it will become more difficult to get any,” Ryu from the bank’s labor union said. “KB Kookmin Bank hasn’t been able to exceed 10 percent on its ROE in the last 10 years.”
The public view of the strike isn’t favorable, especially as these employees are high-income earners.
According to the Financial Supervisory Service, the average annual salary of the bank’s 9,500 male employees last year amounted to 110 million won ($98,500) while the 8,700 female employees averaged 71 million won.
The union strike could also affect consumers.
“If KB Kookmin Bank, which has the largest number of branches, goes on strike, consumers could have problems attending to their bank related businesses,” said Cho Nam-hee, head of the Financial Consumer Agency.
The labor union has opened a small window of negotiation with the bank’s management, saying it expects an agreement if management decides to change its mind and negotiate.
BY YEOM JI-HYEON [email@example.com]
More in Finance
Kospi breaks another record as buying spree continues
Samsung Life warned by the FSS about claim denials
Dollar's weakness pushes won to 30-month high
Kospi hits another high on chipmaker optimism
Eight companies agree to share credit card data