General understanding on General understanding on Korean industrial relationsKorean industrial relations

August 2005reported by Joung, Kyoung Eun

Korea has...Korea has...

Been located in the end of north-east Asia. Got about 22-31°C in summer and minus 9-0°C in winter

in temperature. Got about 45 m. in population. Capital ; Seoul Been divided into two countries after liberation. Quickly industrialised during 70-80s. And, main staples

are cars, mobile phones, semiconductors and so on. has the highest broadband internet penetration rate in the

world. Financial crisis has occurred at the end of 1997.

Economic Background 1Economic Background 1

Economy in 2005 would be recession– GDP growth in 1987-1996 ; over 5%– GDP growth in 2005 ; 4%– Inflation in 2005 ; 3%

Unemployment rate ; 3%

Table 1. GDP growth and inflation since financial crisis

  1998 1999 2000 2001 2002 2003

GDP growth -6.7 10.9 9.3 3.1 6.3 3.1

Inflation 7.5 0.8 2.3 4.1 2.7 3.6

Pay rates 2.4 1.7 3.0 6.6 4.9 6.2

Economic Background 2Economic Background 2 Pay distribution has been worsen

– Pay distribution rates flows ; 61.9% in 1998, 59.7% in 2003

– Labours/jobs flows ; 61.7% in 1998, 65.1% in 2003

– Gini Coefficient ; 0.283 in 1997, 0.3 since 1998

Table 2. Pay distribution flows and labours/jobs flows, Gini Coefficient

  1998 1999 2000 2001 2002 2003

Pay distribution 61.9 59.5 58.8 59.5 58.2 59.7

labours/jobs 61.7 62.4 63.1 63.3 64.0 65.1

Gini Coefficient 0.316 0.320 0.317 0.319 0.312 0.306

Economic Background Economic Background 33

Actual Pay increase rates is under Productivity– Actual Pay increase rates ; 2.2% in 2000, 3.6% in

2003

– Productivity ; 9.2% in 2000, 8.2% in 2003

– Value added ; 8.6% in 2000, 9.0% in 2003

Table 3. Productivity and Actual pay increase rates flows

  2000 2001 2002 2003

Productivity 9.2 0.7 11.8 8.2

Value Added 8.6 0.4 8.8 9.0

Actual Pay rates 2.2 4.1 2.7 3.6

Political BackgroundPolitical Background Constitutional democracy Been ruled by military dictatorship from 60-80s. Democratized since 1987 following great mobilization of

people. President serves only once for five year by direct election. Anti socialist law still exists, which was the main method to

repress student movement and labour movement. Mainly conservative 2 parties ruling system, the biggest

opposite party(ultra conservative) ruled by 1997. Labour party(KDLP) has been founded since 2000 and it

finally has got 10 seats of the parliament in general election of 2004.

KDLP is strongly supported by KCTU.

Trade UnionsTrade Unions

union density ; 12%– its peak point is over 19% in 1991 and after

that it goes downmembers ; about 1,700,000basic structure ; enterprise based union

system2 national centres ; KCTU and FKTU45 industrial union(federation) and over

1,800 enterprise union

KCTUKCTU has been built in 1995 members ; 680,000 in 2002 17 affiliates and 15 regional branches decision-making structure ; annual conference in

January, general conference in a half of year, executive committee meeting every months.

represents autonomous, democratic and militant trade unionism.

Lee, Su-ho, new president has been elected in the annual conference in 2004 and his strategy in industrial relations is to build new social dialogue system.

KCTU’s objectives in 2005 areKCTU’s objectives in 2005 are to abolish to discrimination against irregular workers and their job

security. to defend the government attempts to retrogressively revise labour

laws and to set equal industrial relationship. to change its structure to industry based union system and to

strengthen its capacity. to develop its solidarity with civil movements on anti-us, anti-

globalisaion, anti-new liberalism. to evolve to reform social safety nets. to stimulate reunification movement and relation with KDLP. to strengthen its representation in relation with the government and

employers and to begin to make its long term strategy.

Breakdown of tripartismBreakdown of tripartism Tripartite committee has started since the early 1999 to solve

economic and social problems which are prospected their expansion after financial crisis.

After that, the first social consensus was made on employment and industrial policy in fev, 1999 that means adoption of procedure of redundancy and lay-off by the trade union.

The consensus was rejected by the annual conference of KCTU and under that result all leadership of KCTU was resigned.

Government accepted its resolution on redundancy policy very quickly but never legislated on labour law which expands trade union rights. Besides, tripartite committee was go-stop, go-stop repeatedly. And finally KCTU has been decided its non-participation to tripartite committee.

FKTU has been also decided its non-participation in 2005 following the industrial relationship has been worsen.

Threats to TUThreats to TU increase of scale of irregular workers and of discrimination on pay

and social securities they have been taken new liberal government is trying to retrogressively revise the labour

law which is understood as deregulation of the procedure on redundancy and expansion of irregular workers.

Although KCTU’s basic strategy is to change its affiliates to industrial union system, collective bargaining in industrial level has its vulnerability and difficulties for settlement.

trade unionists in grass-root level are weaken and the fact that TU movement highly depends on large sized enterprise union.

ResolutionResolution

Economy in 2005 is going to recession.-Politics are ruled by two major

conservative parties.-Industrial relationship is unstable

following the government’s attempt to retrogressively revise on labour law and breakdown of tripartism.