Lawmakers push for stronger regulations on labor unions

President Yoon Suk-yeol presides over the first 2023 policy briefing by the Finance Ministry at the Blue House's Yeongbingwan state guesthouse in central Seoul on Wednesday. [YONHAP]

Lawmakers proposed a series of bills strengthening audit regulations for labor unions as President Yoon Suk-yeol gears up for a labor reform.

On Tuesday, Rep. Ha Tae-keung of the conservative People Power Party (PPP) proposed revisions to the country's Labor Union Act.

The revision stipulates that labor union auditors must hold legal qualifications and that accountants within the union are excluded from audit activities. The current union law does not take issue with accounting officers' conducting an audit on themselves.

Rep. Ha also required unions with 300 or more members to report their accounting records to executive authorities. The revisions also required the larger unions to prepare a specific list of accounting materials, to be available for their members.

Deputy Speaker of the National Assembly Chung Woo-taik of the PPP also submitted an amendment to the National Assembly to limit the qualifications of labor union auditors and to mandate the labor unions of large companies and public institutions to report their audit data to the executive authorities every year.

“The current system is like putting a fox in the henhouse,” Rep. Ha said. “The improvement of the blind [bookkeeping] practices will further strengthen the labor unions’ democracy and autonomy.”

The PPP has recently been raising questions concerning the financial transparency of labor unions and proposed a bill to strengthen regulations on labor unions' accounting audits. The PPP believes labor unions have been under lax rules regarding their financial transparency on accounting reports, especially compared to their size and social influence. The annual budget of unions, such as of the Korean Confederation of Trade Unions (KCTU), a major umbrella labor union, is estimated to be as large as 100 billion won ($77.8 million), but how the money is spent is undisclosed.

“We need to properly shed light on union activities for the public to know,” Prime Minister Han Duck-soo said during a meeting between the presidential office, the Cabinet and the PPP at his office on Sunday.

“Since democratization in 1987, labor unions in Korea have continued to grow systematically and have become an important socio-political force,” Rep. Joo Ho-young, the PPP chairman, said during a party meeting at the National Assembly on Tuesday. “Nevertheless, the financial transparency of labor unions is outside the eyes of external auditors, which does not match their high social status.

“In the case of the KCTU, its members reach some 1.13 million and the annual membership fees are estimated to cost over 170 billion won, and other unions are receiving billions in government subsidies,” Joo said, calling for a law revision to legally enable the government or an independent accounting agency to audit the accounting records.

President Yoon has declared major reforms in three major areas — labor, pensions and education — and highlighted labor issues as his administration’s top priority for 2023, which will be his second year in office.

He defined union corruption as one of three major corruptions, alongside corruption among public officials and corporates, and warned of strict law enforcement in a government meeting on Wednesday.

The president cited the transparency in labor union accounting as one way to prevent union corruption.

“The first thing in preventing corporate corruption is the transparency of corporate accounting," Yoon said in a remark at the Blue House's Yeongbingwan state guesthouse in central Seoul on Wednesday. “Union activities can only develop in a healthier way on a transparent accounting basis.”

Labor unions strongly protested to the government’s plan, calling them a violation of the unions’ sovereignty.

In a statement under the name of its spokesman, the KCTU wrote, “After the prime minister's remarks on labor unions, Rep. Ha’s proposed revisions to the labor union law is a shameless treatment," and, “It is a serious violation of the three rights of labor guaranteed by the Constitution and anti-labor initiatives against international standards.”

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]