It is welcome news that the Federation of Korean Trade Unions has decided to return to the tripartite commission with government and management. It paves the way for the normalization of the commission, which has been on a hiatus for eight months.
The commission will hold a full session Tuesday for the first time since the umbrella union quit the panel last December to protest against the police crackdown on a strike by railroad unionists.
The normalization of the tripartite panel is encouraging because there are many pending labor issues that require national consensus. Moreover, peaceful and stable labor relations are essential for supporting the aggressive fiscal and tax stimulus package pushed by the government to prop up the economy.
There are major labor issues that have to be tackled by the commission, including the definition of “ordinary wages” and proposals to cut working hours and extend the retirement age. All these issues affect most workplaces and relations between labor and management in ways that cannot be dealt with by individual employers and employees alone.
The dispute at Hyundai Motor Co., whose labor union voted last Thursday to strike over the ordinary wage and annual pay raises, attests to the urgency of the need to tackle those pending issues. The escalating dispute over ordinary pay stems from a Supreme Court ruling last December that all fixed bonuses should be counted as ordinary wages.
The ruling expands the payments that are included in the ordinary wages, which can affect allowances given to workers for overtime duties and the level of severance pay, which are based on the legally defined ordinary wages. Some of Hyundai’s rivals have already accepted their unions’ demand to change their wage schemes in line with the court ruling.
These cases awaken us to the need to have a universal guideline on the detailed definition and scope of the ordinary wages. The same consensus is required on the proposed reduction of working hours and extension of retirement ages.
Since its inception in 1998 in the midst of a severe foreign exchange crisis, the tripartite commission has not achieved much because of the continuing standoffs between labor on one side and the government and management on the other. But the panel should be not bound by the past.
What raises hope is the initiatives being taken by Deputy Prime Minister Choi Kyung-hwan, the architect of the government stimulus package nicknamed “Choinomics.”
In an unprecedented move, the deputy prime minister is participating in the tripartite panel as a government representative. He also persuaded other participants to accept the FKTU’s demand to set up a subpanel to tackle the government-proposed reform of public enterprises. The proposal has drawn strong protests from unionists, who are worried about job security.
Choi is also in good position to engage with unions because his stimulus package includes measures to not only raise overall pay for workers but also improve the working conditions and welfare of irregular workers. It could be said that Choi is the most pro-labor economic chief in recent years.
It is hoped that the government keeps such an open attitude and that the unionists also takes reciprocal actions so that they can work out a package deal on major labor issues.