The Korea Herald


Standard Chartered avoids labor strike

By Kim Yon-se

Published : Feb. 29, 2012 - 17:02

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Bank and union agree on pay raise, creation of task force on other issues

Standard Chartered Bank Korea has reached a compromise with its union on a wage hike, though there are still unsettled aspects to their talks.

The two sides agreed to pay raises of 2 percent and 4.1 percent for 2010 and 2011 salaries, respectively, late Tuesday.

Their talks on the salary hike have continued over the past two years amid the possibility of a general strike of unionized workers.

They also tentatively compromised another heated issue ― introducing a performance-based salary system after scrapping the seniority-based system.

Instead, the two sides agreed to introduce an incentive system. But they agreed to discuss details among members of a task force.

The coming task force will discuss a variety of pending issues between labor and management.

The union has dropped its earlier stance to protest the management’s move to set up a task force.

With concessions from each side, the bank has avoided seeing the labor dispute enter a critical stage

Though the unionized workers, who went on a walkout between June and August, returned to work, the dispute has been underway until this month.

The union had threatened to stage a strike amid the standstill in their negotiations with the management. It said that it would go on strike unless there is a compromise by the end of February.

Market observers say the strike has apparently lost momentum, as the bank’s branches recently yielded steady profits despite the absence of the unionized workers.

The bank recently accepted the request of all 813 workers who applied for early retirement, cutting 13 percent of its workforce as part of cost cutting reforms.

The bank started taking applications for voluntary redundancy from those who are aged 35 or more and have worked at the bank for over a decade.

It has encouraged senior workers to take advantage of its redundancy payment worth 34 months of pay, offered on top of school expenses for up to two children per worker.

“Laying off 13 percent of their workforce will make their cost management more flexible, but it also faces challenges in its wage payment system,” a banking research analyst said.

In addition, about 20 out of about the 90 executive-level staff left the office under the early redundancy program.

The bank recently dropped the “First” from its name, to become Standard Chartered Bank Korea.

Bank spokespeople said the change will come as it “aims to utilize Standard Chartered’s corporate image” and generate “synergy by coinciding with the bank’s name with the group’s global brand.”

By Kim Yon-se (