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Labour and Society Programme
DP/107/1999
ISBN 9014-615-X
First published 1999
Labour unions in the Republic of Korea: Challenge and choice
By
Ho Keun Song
Department of Sociology, Seoul National University
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| Labour unions in the Republic of Korea: Challenge and choice |
 1. Introduction: Unions in transition
2. Labour politics and the structure of unions
 Labour politics
The growth and structure of unions
Union growth
Union structure
Union activities
Collective bargaining
Routine activities
Industrial disputes
3. Trade unions in the transition to democracy
Democratization in the Republic of Korea
The rise of democratic unionism
Unions in a reform democracy, 1993-1996
4. Challenges to unions: Economic liberalization and globalization
The impact of globalization
Union struggle and labour orientation
The economy, wages and employment
Wages and employment
5. Unions and the politics of crisis management: Labour reform and conflict
IMF regulation
Kim's power base and the first Social Compact
The limits of tripartite negotiation
Unemployment as a bottleneck
Improvement of human rights
6. Politics in unions: Leadership and recent issues
Recent issues
Difficulties of leadership
Union finance and expenditure
Exploring new resources for solidarity
7. Conclusion: Future tasks
Notes
Bibliography
1. Introduction: Unions in transition
For many years unions in the Republic of Korea have struggled for democratic industrial relations
despite repressive policies which continued until the end of the 1980s. Unions have also played
an important role in the country's remarkable economic growth. Since the industrial revolution
really got under way in 1961, state and employers have considered unions as a danger to social
stability and economic growth whenever firms and factories are disturbed by labour disputes.
Politicians and employers have always maintained that workers involved in industrial disputes are
imbued with pro-socialist and communist ideology. This sort of anti-labour feeling is so deeply
rooted in Korean society that organizations such as unions, pursuing social justice and workers'
rights, cannot develop normally.
Apart from public hostility towards trade unions, repressive labour laws were the most serious
impediment to union development. These laws limited union activity and blocked the intervention
of industrial unions in labour disputes and collective bargaining at enterprise level. Labour leaders
who dared to call a legal strike were likely to be arrested on charge of violating other regulations.
In the first half of the 1980s when authoritarian laws were strengthened, more than 2,000 labour
leaders were imprisoned. Many young and innocent workers, male and female, spent years in gaol.
This situation received international attention since labour repression generated serious problems
concerning human rights and workers' rights. The labour movement remembers the 1970s and
1980s as years of bitter struggle against political repression and unfair labour practices. During
this period there were massive and violent strikes at shipyards, automobile factories and steel
mills, some of which received worldwide attention, notably the labour disputes of 1987. These
continued for four months in most factories and workplaces in support of workers' rights and
better working conditions, epitomizing the struggle against state repression and employers' brutal
and inhuman treatment. About 1.3 million workers actively joined these disputes which were a
watershed in Korean labour history, not only in the number of workers mobilized but also in the
impact on industrial relations. The government had to accept workers' demands unconditionally
in face of the breakdown of authoritarianism. As a consequence, repression was relaxed, unfair
labour practices largely disappeared, workers' rights improved, and unions gained some power to
negotiate with government and employers. The era of bitterness seemed to be over. But unions had
to wait a few more years before they had any real influence.
The labour movement had to enter an entirely new epoch after the political opening of 1987
and went through a period of trial and error in adapting to a new environment. The upheavals of
1987 provided a good chance for workers to organize, so that many unions, big and small, were
new. New unions did not have the experience to organize the labour movement effectively and to
manage labour demand. Workers began to organize in all industrial sectors, but there was no
coherent leadership at the top level to control local unions and rank-and-file workers. Unions, old
and new, realized that they had to cope with entirely new issues regarding democratization and
globalization. Thus, the years after 1987 are a period of challenge and response, of success and
failure, and of satisfaction and frustration to Korean unions. They improved their organizing skills
and capacity to manage worker demand, but inter-union alliance and cooperation was seriously
weakened by intensified market competition.
The focus of this study is on the successes and failures of Korean unions since 1987. The paper
analyses the strategies and policies that unions have implemented in a time of democratization and
globalization. It also sheds some light on the consequences, explaining how the labour movement
has been affected, modified and split in the process, and how it has responded to new challenges.
The issues and problems that unions have faced are described in the analysis.
The paper is structured as follows. Chapter 2 provides some basic facts on labour laws and
amendments, union density and development, apex bodies and organizational structure, leadership,
union movements and industrial strikes, the rules and regulations of collective bargaining and
wage negotiation. The next two chapters address the role of unions in democratization and
economic reform. Chapter 3 examines how organized labour was excluded from reform politics
and how it responded to the exclusion. Chapter 4 analyses employer efforts to cope with the
pressure of globalization, focusing on industrial restructuring and re-engineering and their
consequences for the economy. It explains why union orientation shifted from politics to
economics and why working class unity and alliances between enterprise unions declined as labour
market conditions changed.
The next two chapters concern union strategies and responses to structural change. Chapter 5
deals with union efforts in the reform of national labour law and describes negotiations with the
ruling party during the economic crisis of 1998. Labour law was amended twice in the 1990s. Was
this beneficial to industrial democracy? Was it conducive to improving productivity and
competitiveness? The amendments are the subject of heated debate on these questions among
union leaders. Policy packages under the IMF are examined in the discussion of President Kim
Dae Jung's labour politics. The chapter analyses how the government violated human rights by
strictly enforcing the national security laws on strikers and by having labour leaders watched by
police and intelligence agencies. The situation improved significantly under Kim Dae Jung's
government. Chapter 6 looks at union organizations, conflict surrounding the emergence of new
leaders, relations between leadership and rank-and-file workers, union strategy in collective
bargaining and wage negotiation. The chapter examines recent issues, notably the question of
improving their public image, which is essential if unions are to influence society as a whole. They
are now trying to expand their networks and makes alliances with other social movements in order
to develop common interests and cooperation. They exchange information and share ideas on
political and economic issues with organizations representing new social movements. The paper
concludes with a discussion of further ways of improving unions' contribution to social, political
and economic reform and strategies for adapting to globalization.
2. Labour politics and the structure of unions
Labour politics
"Labour politics" refers to the policy packages implemented by government and employers to
achieve their own goals vis-à-vis organized labour. The term covers the political, legal and
institutional instruments regulating interactions between employers and unions in the workplace
and the limits imposed on collective action. It defines the legal status of unions, the structure of
labour relations, the procedures for organizing workers and the role of unions in politics and the
economy. Labour politics are structured through tripartite cooperation between government,
employers and workers in democratic countries, while they are enforced by an authoritarian state
or monopoly capital in non-democratic settings. The Republic of Korea relied on authoritarian
labour politics until 1987.
The approach was authoritarian not only in the workplace but in the control exercised over
workers who rebelled against state policies. The government relied on violent and repressive
means to resolve industrial conflict and subdue worker militancy. The police and intelligence
agencies frequently intimidated labour leaders who expressed discontent and complained of
maltreatment. Industrial disputes were commonly terminated by violent police attacks prior to
1987. The state legitimized repressive labour policies by stressing that workers should accept such
practices until economic prosperity was achieved.
Rapid economic growth was supported by authoritarian labour control, which squeezed
maximum productivity out of workers. Since authoritarian labour control was a common feature
of East Asian NICs, it is often argued that there is a structural affinity between export promotion
strategy and labour repression (Deyo, 1987, 1989; Deyo, Haggard, and Koo, 1987; Gereffi and
Wyman, 1990; Koo, 1987). The argument is particularly true of Korea, which made a radical turn
to authoritarian repression with increasing industrialization in 1972. During the Yushin regime
(1972-1979) state repression was enforced so strongly that organized labour could not expand its
activities and make demands without suffering reprisals.
The labour regime aimed at demobilizing and depoliticizing industrial workers. Demobilization
was designed to discourage unionization and destroy established unions which disturbed industrial
stability through frequent work stoppages and strikes in protest against state policies.
Depoliticization was designed to prohibit organized labour from political participation and deny
opportunities for partnership with the government. Organized labour has been regarded as a
necessary evil throughout the history of the Republic of Korea since the liberation. The odd
combination of rapid growth and anti-labour ideology is an interesting feature of the country's
economic miracle. Repressive politics integrated the economy into a coherent policy of export-led
industrialization.
During the period of legal and political repression, the labour regime had some distinctive
characteristics: enterprise unionism, and administrative and political control. The enterprise union
is the basic unit of worker organization and activity. Only regular blue-collar workers within a firm
are entitled to join the enterprise union. Enterprise unions can be associated with the industrial
union and the Federation of Korean Trade Unions (FKTU), but affiliation is not obligatory. The
state vigorously constrains union activity within the workplace, defining the enterprise union as
an institution for settling grievances and maintaining cooperation between employer and
employees. Apex bodies at both industrial and national level cannot intervene in collective
bargaining at plants. They can only send policy recommendations and, sometimes, petitions to
employers when collective bargaining has reached a stalemate. According to a survey conducted
by FKTU in 1983, only 3 per cent of firms with 500 or more workers engaged in collective
bargaining at all: in these firms bargaining concerned only minor issues like paid vacation, work
allocation, and some trivial aspects of working conditions.
Second, the Ministry of Labour controls the administrative and legal functions of unions. A
new trade union has to get a certificate of registration from the Ministry, known as the Labour
Office until 1981. If no certificate is granted the new union has to be disbanded. Before 1987,
there were numerous disputes about the certificate of registration especially when the Ministry,
in collaboration with employers, refused to issue a certificate to unions that fulfilled all the
qualifications. The labour code also empowered the Ministry to withdraw the legal status of
established unions if they were deeply involved in politically significant industrial disputes, or
accused of agitating violent strikes. Besides this, union leaders had to report on their activities and
submit their annual budget to the Ministry. If the annual budget was not used for activities
permitted by the labour code, union leaders could be charged with violating the law.
Administrative inspection was an efficient way of controlling unions involved in many troubles
and disputes.
Third, the political control of unions relied on institutions such as the police and intelligence
agencies. While the Ministry of Labour inspected and supervised the daily activities of unions,
including disputes on working conditions, wage negotiation, and unfair labour practice, the
intelligence agencies were mainly concerned with security. Their role was to prevent unions from
being connected with and affected by militant groups outside factories. It is not long since security
police disappeared from big factories and industrial parks. During the authoritarian period, the
national intelligence agency frequently intervened in violent strikes which threatened political
stability. In these years, numerous workers were arrested on charge of violating the national
security laws and imprisoned. This explains why unions have pressed for abolition of the national
security laws, as promised by President Kim Dae Jung. Organized labour was thus surrounded with
and regulated by multiple types of surveillance. As a consequence, unions could not develop the
horizontal and vertical linkages which were essential to the growth of the labour movement. Union
activities were confined to the enterprise and those that tried to make alliances across firms were
subject to severe and violent repression.
Union leaders in strikes had no legal protection from dismissal and arrest. Once they were
gone, it took a considerable time to reproduce leadership and to recover solidarity with the rank-and-file. Making use of repressive measures, the state aimed at strengthening enterprise
consciousness as an essential element of the Korean tradition of paternalism. Employers were
basically responsible for the welfare of their employees as sons and daughters, in exchange for
discretionary powers of control. In reality, the system generated wealth for the state and employers
but failed to include employees in the benefits of high productivity because of its exploitative and
repressive character. As social ills such as inequality and political repression became worse,
however, workers gradually turned away from the illusion of government promises and began to
engage in class conflict in close association with revolutionary student groups. This explains why
militant factions of the labour movement were oriented to a radical socialist revolution instead of
gradual social reform in the latter half of the 1980s.
The growth and structure of unions
Union growth
The proportion of organized workers has risen and fallen over the last three decades according to
the political and economic climate, but overall it has fluctuated between 15 and 24 per cent. It
seems that 25 per cent was the highest organizing rate, during the years of rapid growth. Chun Do
Hwan's regime (1980-1987) recorded the lowest figure: unionization was relatively higher during
the Yushin regime (1972-1979) than during the period of democratization after 1987. This does
not mean that union power to negotiate after the transition to democracy is weaker than in the
Yushin regime. The higher rate during the 1970s is mainly attributable to a rapid increase in the
number of industrial workers due to growth in heavy industry and chemicals, and also to relaxation
of political repression by President Park in the late 1970s. Controls were eased in order to placate
growing discontent at workplaces. Unions have grown dramatically in number over three decades
although union density has changed very little. Ten industrial federations have recently been
established, the number of local unions has tripled, and membership expanded from 200,000 in
the early 1960s to approximately two million in the early 1990s. The growth of unionization can
be described under several headings.
First, five industrial federations were established during the labour dispute of 1987 by splitting
existing federations and unionizing previously unorganized white-collar employees. The
Federation of Korean Rubber Workers was created at this time, while newly organized workers
included insurance staff, taxi drivers, clerical and financial workers, and city subway workers. The
new federations had a progressive and somewhat radical orientation in contrast to the passivity that
FKTU maintained over many years. During 1992 five more new federations were created. These
brought together the unions representing journalists, hospital workers, university employees,
maintenance workers, researchers, professionals, and technicians. These federations sprang up
shortly after 1987 and were very active in the period of democratic transition, receiving state
recognition in 1992-93. This was a significant time in Korean labour history because it marked the
establishment of the first white-collar unions, which were unimaginable in the past. Federations
of white-collar unions fought hard for state recognition, in cooperation with progressive groups
of blue-collar unions. After 1987 these industrial federations were allowed to decide freely
whether to choose FKTU as their national centre or to remain independent. As of November 1995,
however, Korea entered an era of multiple unionism at apex level as many unions formed another
national centre, the Korean Confederation of Trade Unions (KCTU), competing with FKTU.
Second, local unions grew fast during the 1970s, reaching 5,000 at the end of the decade, but
then dropping sharply to just over 2,000. Chun Do Hwan's regime was detrimental to union
growth, but the labour dispute of 1987 precipitated an explosion of new activity, and almost 1,500
unions sprang up within six months. Industrial workers had an unprecedented chance to organize
in the transition to democracy and almost 8,000 new unions were created in the two years after
1987, the rate of organization rising from 15 to 23 per cent. But this was the high spot of the
movement.
| Table 1. Growth of unions |
| Year |
Industrial
unions |
Local unions |
No. of
members |
Organizing rate
|
|
|
|
|
Male |
Female |
Total |
| 1963 |
16 |
2150 |
224420 |
20.8 |
18.5 |
20.3 |
| 1965 |
16 |
2634 |
301522 |
23.5 |
19.1 |
22.4 |
| 1970 |
17 |
3482 |
473259 |
20.1 |
19.7 |
20.0 |
| 1971 |
17 |
3507 |
497221 |
20.1 |
18.4 |
19.7 |
| 1972 |
17 |
3391 |
515,292 |
20.3 |
19.7 |
20.4 |
| 1973 |
17 |
3268 |
548054 |
20.3 |
20.0 |
20.4 |
| 1974 |
17 |
3784 |
655785 |
21.3 |
22.9 |
22.1 |
| 1975 |
17 |
4073 |
750235 |
21.4 |
26.6 |
23.0 |
| 1976 |
17 |
4371 |
845630 |
21.6 |
26.4 |
23.3 |
| 1977 |
17 |
4580 |
954727 |
22.6 |
27.9 |
24.3 |
| 1978 |
17 |
4857 |
1054608 |
22.7 |
26.2 |
24.0 |
| 1979 |
17 |
4947 |
1088061 |
22.7 |
25.0 |
23.6 |
| 1980 |
16 |
2618 |
948134 |
18.5 |
23.3 |
20.1 |
| 1981 |
16 |
2141 |
966738 |
18.5 |
21.6 |
19.6 |
| 1982 |
16 |
2194 |
984136 |
18.1 |
21.2 |
19.1 |
| 1983 |
16 |
2238 |
1009881 |
17.8 |
18.5 |
18.1 |
| 1984 |
16 |
2365 |
1010522 |
16.5 |
17.2 |
16.8 |
| 1985 |
16 |
2534 |
1004398 |
15.9 |
15.2 |
15.7 |
| 1986 |
16 |
2658 |
1035890 |
16.2 |
14.2 |
15.5 |
| 1987 (June) |
16 |
2742 |
1050201 |
15.6 |
12.9 |
14.7 |
| 1987 (Dec) |
16 |
4103 |
1267457 |
18.5 |
15.0 |
17.3 |
| 1988 |
21 |
6164 |
1707456 |
23.9 |
18.1 |
22.0 |
| 1989 |
21 |
7883 |
1932415 |
25.8 |
18.5 |
23.3 |
| 1990 |
21 |
7698 |
1886884 |
24.4 |
16.3 |
21.5 |
| 1991 |
21 |
7656 |
1803408 |
22.8 |
14.2 |
19.7 |
| 1992 |
21 |
7527 |
1734598 |
21.9 |
12.2 |
18.4 |
| 1993 |
26 |
7147 |
1667373 |
20.5 |
11.3 |
17.2 |
| 1994 |
26 |
7025 |
1659011 |
19.9 |
10.0 |
16.3 |
| 1995 |
26 |
6606 |
1614800 |
18.7 |
9.3 |
15.3 |
| 1996 |
26 |
6424 |
1598558 |
18.4 |
8.4 |
14.7 |
| 1997 |
26 |
|
|
17.5 |
7.0 |
13.5 |
| Source: Korea Labour Institute: KLI Labour Statistics (Seoul, Korea Labour Institute, annual). |
Third, the proportion of organized workers culminated at 23.3 per cent in 1989 due to expanded
political opportunity, falling back to 13.5 per cent in 1997. The rate will probably go up again to
about 20 per cent when the new labour laws allowing teachers and public sector employees to
organize comes into force in 1999. It is notable that the trends for male and female workers
crossed in the mid-1980s, when more men were joining unions but fewer women. This cross-over
was associated with the transformation of Korean industry from labour-intensive to technology-
and capital-intensive production. The centre of the labour movement shifted from unskilled women
workers in light industry in the 1970s to skilled male workers in the 1980s. The shift altered the
goals and orientation of the labour movement, as detailed in a later chapter.
Union structure
The structure of unions in Korea is relatively simple, since the state did not permit multiple
unionism until recently, and enterprise unions were the basic unit of national organization. For
many years the Federation of Korean Trade Unions was the only national centre which had official
status. However, competing groups of organized labour set up another centre in November 1995,
which they called the Korean Confederation of Trade Unions (KCTU).(Endnote 1) The new centre brought
together progressive and active unions which were dissatisfied with FKTU. The new national
centre strove for government recognition as a legal organization, and this was finally achieved in
1996.(Endnote 2) Thus, organized labour in the Republic of Korea has two national centres. Labour laws
stipulate that enterprise unions can join a national centre but not individual workers. However,
enterprise unions are more closely affiliated with industrial federations than with national centres.
Although the national centre is an apex body regulating both industrial unions and enterprise
unions, labour leaders at workplaces tend to regard the industrial federation as their supreme
organization. The national centre is remote from rank-and-file workers in unionized factories. The
tie between industrial federation and enterprise unions tends to be stronger in industries such as
textiles and metals, which have had industry-wide collective bargaining for a long time. In general,
however, membership in a higher organization meant little because of labour laws that prohibited
third party intervention in disputes at the workplace. But now it is likely that the amendments of
1996 and 1998 which abolished the prohibition will make vertical links stronger and more
meaningful in the near future.
Another sort of federation grouped the occupational unions which mushroomed in white-collar
sectors shortly after 1987. Among the 12 federations of occupational unions that were active at
that time, six were successful in getting legal recognition by 1993. They launched another apex
body, the Korean Congress of Independent Industrial Trade Union Federations (KCIIF) in 1990.
Thus, three kinds of apex body emerged during the transition to democracy.
Union activities
Collective bargaining
Unions are mainly concerned with collective bargaining and daily routine activities. For a long
period, authoritarian governments banned enterprise unions from engaging in collective
bargaining. Instead, the Labour-Management Cooperative Council (LMCC) was set up to deal with
working conditions and grievance settlement, while unions were concerned with welfare and safety
in the workplace and also outside. The Ministry encouraged monthly meetings of the LMCC,
which was composed of managers and worker representatives, and mandated to report on its
discussions and decisions to the government. A department of the LMCC was established in the
Ministry of Labour to guide and regulate the Council and to send guidelines on state policies to
all factories. Collective bargaining was not illegal but was politically banned.
But rules and customs changed dramatically after 1987. Most enterprise unions, old and new,
claimed the right of collective action and wage negotiation, sometimes with support from the
industrial federation, but mostly on an independent basis. It was a tradition to carry out collective
bargaining and wage negotiation separately in the Republic of Korea, even under an authoritarian
government. Wage negotiations take place in all industries every spring, as in Japan, while
collective bargaining begins early in September and continues until November or December. The
system probably originated when the Japanese implanted company welfarism in the colony.
Unions deal with job security, worker participation in management and welfare issues through
collective bargaining. This dual system actually prolongs the bargaining period over the entire
year. However, a consensus between employers and unions emerged in the early 1990s on ways
to curtail institutional inefficiency and reduce unproductive costs. The result was a rapid shift from
the dual system to a single round of negotiations. Now, most large firms hold wage talks and
engage in collective bargaining simultaneously.
Routine activities
Since 1987 enterprise unions have been overwhelmed by large and small demands from rank-and-file workers. Employees in trouble resort to union representatives first instead of seeking help from
the head of their production team or a supervisor as in the past. This shows that unions have gained
the confidence of the rank-and-file in most factories. To counteract the increasing influence of
union representatives in the workplace some employers have attempted to strengthen the
managerial hierarchy by giving more power to section heads and supervisors. This caused serious
conflict between employers and unions concerning the direction of managerial innovation in the
early 1990s. In addition to dealing with the concerns of individual workers, most large unions have
started to publish newsletters which discuss broad labour issues ranging from unfair labour
practice to firms' reinvestment schedules.
According to a survey (Yee and Kwon, 1995, p. 180), the priority activities for unions are: wage
negotiation, worker welfare and fringe benefits, industrial accidents, organizational consolidation,
job security, solidarity with other unions, work sharing, union democracy, job grading,
development of policy packages, abolition of discrimination, and reform of work organization.
Industrial disputes
Unions in the Republic of Korea are well-known for their militancy. Labour militancy is ascribed
mainly to a repressive state that closes the political space through which organized labour
expresses and accomplishes its political and economic demands. Factory size and worker
homogeneity are other factors enhancing militancy. Chaebol firms (conglomerates) employ over
half of all industrial workers and they are not split into different groups by race or religion. Some
researchers argue that a high degree of egalitarianism in national society is conducive to labour
militancy, which is interpreted as an expression of frustrated upward mobility and income disparity
(Kim, 1992).
It is widely accepted that the main causes of labour militancy are political repression and
perceived economic inequality. These two factors are closely interwoven in an authoritarian setting
in which the ruling groups always emphasized a "development-first-and-distribution-later" policy
when confronted with worker demands. The worker challenge has taken various forms according
to perceptions of isolation and discrimination. As economic success reduced absolute poverty in
the 1970s, the focus of discontent shifted to the relative deprivation that most workers thought was
the result of government reluctance to distribute wealth equally. Worker discontent was amplified
by illegal property accumulation through speculation and corruption. Bognanno (1988, p. 435)
observed: "at some point during the past five to ten years workers and the public seemed to shift
from a concern over absolute poverty to a concern over relative poverty."
Relative poverty and corrupt links between politics and business explain the "strange paradox"
that although Korean citizens, including industrial workers, received economic benefits, workers
expressed anger at their government, political leaders and business managers (Lindaeur et al.,
1997). Research identifies four factors which explain the paradox: the excessive prolongation of
authoritarian controls that favoured management over workers; outrage at disrespectful treatment
by superiors; an acute sense of relative deprivation; the perception that wealth was acquired by
illegitimate means (pp. 111-113).
A great many industrial disputes occurred after decades of rapid economic growth. Unions were
well-prepared to embark on strikes, demonstrations, and sit-ins at a time of frustrated collective
bargaining, illegal dismissals, and unfair labour practices. But a careful look at the statistics
reveals that, except at the time when the government changed, there were relatively fewer
industrial disputes in the Republic of Korea than in some advanced European countries such as
France and Italy. The two periods around 1980 and 1987 were extremely unstable. In 1980, most
industrial workers took part in strikes and demonstrations, demanding political freedom, equal
distribution of wealth, and humane treatment. In that year, a violent revolt occurred in a mining
village in protest against a supervisor's appropriation of worker wages and an employer's unfair
labour practice. The industrial disputes of 1987 are known as the "Ulsan Typhoon" since they
were ignited by violent turmoil in the Hyundai Heavy Industry Co. located in Ulsan. About 1.3
million workers in 3,300 firms all over the country were involved in these disputes. This was
unprecedented in Korean labour history. Blue-collar workers fiercely attacked employers and
managers in a kind of class war. This vociferous and unstable atmosphere continued over two more
years of numerous industrial disputes. But the frequency of disputes has declined since the early
1990s and fell below one hundred in 1997.
Labour statistics on type of conflict, number of participants and working days lost indicate that
work stoppages and sit-ins are the most common type of dispute in Korea. Whereas industrial
disputes were ignited mainly by wage-related issues in the 1970s, workers' concern shifted to
diversified issues including collective bargaining, dismissal, and unfair labour practices in the
1980s.
3. Trade unions in the transition to democracy
Democratization in the Republic of Korea
Undoubtedly, the Republic of Korea has made remarkable progress towards democracy since the
political opening of 1987. First of all, the machinery of authoritarian politics was removed and the
rules of fair competition were introduced into the political and economic arenas. National politics
now satisfy the criteria of procedural democracy suggested by Dahl (1971). In 1998 the door was
opened to organized labour when worker representatives were invited to take part in tripartite
negotiations, i.e. almost ten years after the political opening. Although the ruling party invited
organized labour to the politics of crisis management in January 1998 under IMF regulation, how
far this process will go and how it will be institutionalized remain uncertain.
How have unions organized their struggle for better democracy? What did they do during the
ten-year transition to democracy? What are the political and economic consequences of the
struggle? How have unions themselves been affected? The present chapter addresses these
questions. It is helpful to begin with a brief description of the democratization process with regard
to the structural obstacles that hindered the political participation of organized labour at national
level.
Democratization proceeds through three consecutive phases; political opening, transition and
consolidation (O'Donnell and Schmitter, 1986). It is widely accepted that the Republic of Korea
successfully passed through the first two phases in a short span of time. Political opening began
with the general election of February 1985, when the opposition party won a majority in the
National Assembly. This phase culminated in the Announcement of 29 June 1987, which set out
the political concessions to civil society. The country began its transition to democracy with the
Rho Tae Woo regime (1987-1992) at the end of 1987. The Rho regime can be defined as a
restricted democracy since it reduced political repression but the nucleus of power remained
unchanged from the previous Chun regime. Its contribution to democratization was the
appointment of Kim Young Sam, an opposition leader, as presidential candidate for the ruling
party. This appointment meant the end of authoritarianism strongly backed by the military. The
Kim Young Sam government (1993-1997), the first civilian government since the military coup
of 1961, started democratic consolidation by carrying out a series of reforms during the first half
of its term. But the effort was only partly successful due to the lack of political skill and strong
reactionary attacks from conservative power groups. Consolidation is protracted. Although it is
too early to say whether it will proceed successfully under the Kim Dae Jung government (1998
- present) there are many positive signs.
What role did organized labour play during these three phases? Did unions succeed in
expanding organizational and political space as a supreme goal of the labour movement? Have
they strengthened their bargaining power vis-à-vis the government and employers? It is notable
that organized labour actually gained much less than it contributed to democratization. Organized
labour pushed the authoritarian regime to relax political repression by calling mass strikes in the
years after 1985, and it expanded the organizational foundation of opposition movements by
making alliances with student and religious groups. Finally, it triggered the transition to democracy
in 1987 by repudiating labour laws that upheld authoritarian repression. The abolition of
authoritarian rules and the achievement of political freedom are by no means negligible. But labour
problems were not included in the package of reform policies of the Kim Young Sam government
and it was not until April 1996 that the government announced the schedule of labour reform.
Gains are observable in the fact that wage and fringe benefits almost doubled in a short time.
Although many warned that the sudden increase in labour costs would eventually ruin national
competitiveness it was more urgent to satisfy worker demands than to avoid future economic
problems.
Democratization in the Republic of Korea shows distinctive characteristics. First, the process
falls into the category of reform democracy rather than rupture democracy. Reform democracy
occurs when old authoritarianism does not collapse completely and political power is shared
between the old élites and opposition leaders. In this model, authoritarian élites adopt a passive
strategy to accommodate the demands of opposition groups. The advantage of reform democracy
is that political stability is maintained throughout the process, but fundamental changes are hardly
expected. In the Republic of Korea democratization resulted in the removal of authoritarian rules
but there was no fundamental change in the party system, electoral system or power structure. In
these circumstances it was natural that labour codes remained almost untouched until 1996, and
organized labour had no part in reform politics.
Second, Korean politics do not reflect class interests since these were long suppressed by
authoritarian governments that gave priority to public rather than private interests, and national
rather than individual causes (Stepan, 1978). In this context, labour leaders could not penetrate the
power nucleus that was monopolized by politicians.
Third, organized labour did not have access to "the ultra-élitist agreements" which facilitated
the transition to democracy. Political agreement commonly emerges in a period of transition to
minimize socioeconomic costs and political instability. But in the Republic of Korea, organized
labour was alienated not only from these ultra-élitist agreements but also from policy
implementation in the absence of "a social pact".
The factors described above determined union experience during ten years of democratization.
The consequence is the disparity of union power between national and enterprise levels: union
influence is still limited at national level, while it has grown much stronger within the firm.
Bridging this gap became the supreme goal of union movements after 1987.
The rise of democratic unionism
A careful examination reveals that the labour dispute of 1987, called the "Ulsan Typhoon", was
not an organized and strategic strike with a clear purpose but an explosion of worker protest
against authoritarian repression. Thus, it seemed that meeting worker demands was the best
strategy for the state in crisis. The government accepted and announced its intention to reform the
labour code. The strike gave an impetus to the emergence of informal and progressive groups of
workers, who developed a revolutionary and socialist ideology. These groups initiated strikes and
street rallies during the labour disputes, supported by student activists, religious groups and
political opposition factions. They emphasized the importance of unionism in eradicating
authoritarian repression and achieving the "liberation of labour". More radical factions of workers
proclaimed a socialist ideology as the most viable ideological weapon against the state and
monopoly capital. Consequently, the new unionism grew in pursuit of the liberation of labour and
presented a radical and progressive vision of future society. Establishing the Korea Trade Union
Congress (KTUC), an apex body independent of FKTU in 1990, unionists rigorously pursued the
amendment of labour codes as the platform for mobilizing workers. The new unionism was known
as "democratic unionism" because of its goal of abolishing authoritarian repression.
A close look at the components of the new unionism gives us useful information about the
origin and nature of democratic unionism. First, the new unionism developed in labour-intensive
industries, characterized by low wages and long hours of work. During the 1970s, a period of
heavy industrialization, the labour movement was mainly led by workers in textiles and
electronics. They adopted desperate means such as suicide and self-immolation to protest against
labour repression under the Yushin regime. A militant and revolutionary vision of the new
unionism was the legacy of the labour movement in this sector. It also indicates that the new
unionism, which had a radical and militant orientation, could not easily penetrate capital- and
technology-intensive manufacturing.
Second, owing to its industrial origin, the new unionism had a closer affinity with young female
workers at the lowest level of the labour market pyramid. Simply put, workers in lower and less
advantageous positions were more likely to support democratic unionism than FKTU compliance
with authoritarian rule. The disparity by age and sex is also closely associated with the
generational change in the labour movement. The rise of democratic unionism was closely
associated with the new generation of workers who were less tolerant of economic inequality and
political repression. This was the result of a learning process that was closely linked to student
movements and to the presence of student activists in factories.
Third, KTUC workers strongly pursued the "liberation of labour" as a common vision of future
society. However, its meaning and the strategy to achieve it showed wide variation. The moderates
thought of the liberation of labour in terms of economic affluence but the radicals thought in terms
of the political domination of the working class over the state and the bourgeoisie. While the
moderates asserted that power should be gained through electoral means, the radicals used
revolutionary methods to build a socialist society as an alternative to bourgeois politics. Since the
revolutionary ideology was, of course, a menace to the National Security Law, the state imprisoned
a number of students and union activists when KTUC was established. This created human rights
issues that will be described later.
Comparing the power of FKTU and KTUC, it was reported that KTUC workers numbered
193,000 when the Congress was established compared with 1,739,000 in FKTU. This means that
KTUC membership was only one-tenth that of FKTU and only 2.7 per cent of the industrial
workforce. Simply put, KTUC represented only a small fraction of industrial workers with a
radical and militant ideology. Though the new unionism successfully launched its apex body as
the headquarters of worker struggle, it faced formidable pressure. The pressure included state
repression, the lack of consistent programmes, and competition with FKTU for members. It is
understandable that the democratic unionism could not assure autonomy from the beginning.
Unions in a reform democracy, 1993-1996
The reform politics of the Kim Young Sam government excluded organized labour from
policymaking and implementation. Although it satisfied the requirements of formal democracy,
political power was largely monopolized by individual élites who were loyal to the former leader
of the opposition. In contrast to claims made in his election campaign, President Kim did not offer
an opportunity to social groups to participate in central politics. Instead, he attempted to bring the
leaders of social movements into the ruling party as members of the Assembly, and appointed
influential leaders to important government positions. Organized labour was no exception. Some
prominent figures in the labour movement became members of the Assembly, while others became
independent researchers on labour problems or consultants on labour relations. Political
democratization at state and national level weakened political unionism, which emphasized inter-union cooperation and collective action.
Nevertheless, organized labour continued trying to strengthen its influence on politics and the
economy. Union leaders adopted various strategies to increase their political influence; these
included attempts to establish a labour party, strengthen industrial unions, amend labour laws, and
construct a strong national centre by mobilizing the unorganized. Competition between two
national centres was a noticeable feature of this period. The centres were FKTU and KCTU
(Korean Council of Trade Union Representatives, which was established by combining KTUC and
KCIIF in 1993). In 1995, a new KCTU-Korean Confederation of Trade Unions was created. The
two national centres sometimes cooperated in pressing the government to start amending the
labour code, but there were significant differences between the centres in their approach to most
labour issues. Government opened channels for negotiation and discussion only to FKTU because
KCTU was not officially recognized. KCTU grew faster in size and influence in the first half of
the 1990s by incorporating large unions in strategic industries such as automobiles, shipbuilding
and metals. FKTU abandoned its passive and submissive attitude to government in order to cure
the identity crisis accelerated by its declining membership, but this strategy did not slow the
growth of KCTU. KCTU functioned as a centre of the working-class struggle during these years.
As a centre of democratic unionism KCTU gained great influence over most large unions in
manufacturing industries, as well as over the new white-collar unions. What did the centres do in
these years? And what were the main goals they pursued? These can be summarized as follows.
First, amendment of the labour laws was the prime goal that FKTU and KCTU pursued together
without discord. The two national centres demanded the repeal of laws which violated ILO labour
standards, insisting that the ban on political activity and third party intervention in labour disputes
should be abolished first. However, the state did not accept this demand since it would have meant
a fundamental change in labour relations, giving more power to unions.
Second, the demand for third party intervention was closely related to the long-term goal of
strengthening industrial unions. Industrial unions were a desirable alternative to company unions,
as these limited union activity to the enterprise. While the state objected strongly to industrial
unionism, the national centres made strenuous efforts to accomplish it. Local union attitudes varied
according to labour orientation. A survey reported that labour leaders at plant level who favoured
enterprise unionism outnumbered those who preferred industrial unionism (Song, 1992). A survey
conducted by Song in 1992 gave further support to this finding. The study of 250 labour leaders
in small and large manufacturing firms dealt with union activities, worker attitudes, financing, and
other issues. It seemed that labour leaders had less toleration of control by a higher organization.
Political liberalization with economic recession pushed labour leaders to be more inward-looking.
Third, KCTU lobbied the government to legalize multiple unionism at both national and firm
levels. FKTU strongly opposed this for fear that multiple unionism would wipe out the FKTU
advantage and make collective bargaining less effective at workplaces.
Fourth and finally, the two national centres put the emphasis on rapid and broad-based social
reform. They pressed for the eradication of links between politics and business, punishment of
corrupt politicians and bureaucrats, the introduction of transparency in banking transactions, and
finally, tax reform. In April 1993, FKTU accepted wage concessions on condition that the
government would immediately implement social reforms. Even though KCTU criticized FKTU's
decision at that time, it did not repudiate the social reforms set out in the wage agreement.
In this respect, the contribution of organized labour to democratization is not negligible. It put
formidable pressure on government to implement a package of reform policies, regardless of the
final outcome. But organized labour continued the struggle to gain its goals until April 1996 when
government announced the schedule for labour law amendments.
It is peculiar to the Republic of Korea that white-collar unions collaborated with blue-collar
unions in pursuit of social reform in the process of democratization. Most white-collar unions
emerged shortly after 1987 as a result of political concessions to worker demands for union
freedom (see table 2 for unionization of white-collar workers). Of the many new unions those
representing journalists, hospital workers, clerical and financial workers were influential in terms
of size and activities. The journalists' unions achieved solidarity and extended a strong influence
on the media through a massive and violent strike at KBS, the public television station, in 1990.
They demanded free speech and protested against government control over news broadcasts and
other programmes. Workers in all the media joined and supported the KBS strike as a symbol of
resistance to state control. The journalists' unions thus earned an image of pioneers at the frontier
of democratic labour relations. In 1993, six out of 13 white-collar unions acquired legal status
through decisions of the Supreme Court. The struggle of the hospital unions to acquire legal
recognition is well-known. Members of these unions were mainly nurses, mechanics and other
low-paid workers who had many complaints about working conditions. Their demand for better
conditions was naturally connected to the quality of public service. The clerical and financial
workers' unions made it their prime goal to implement banking transactions under real names
immediately. They claimed that new institutions were needed to eliminate corrupt links between
politics and business. It should be pointed out that worker demands for economic well-being and
better working conditions included social and political reforms in the three sectors represented by
the unions of journalists, hospital staff, and financial and clerical workers.
The white-collar unions established a national centre to organize workers and promote
independent occupational unions. In May 1990, the Korea Congress of Independent Industrial
Trade Union Federations (KCIIF) was created as an umbrella organization for white-collar unions.
It participated actively in general strikes, street rallies, and other public events demanding
amendment of the labour laws and union freedom in support of KCTU. (Needless to say, some
elements in KCIIF were closer to FKTU.) But, in general, KCIIF contributed to social and political
reform by improving the quality of public services and pressing government and employers to
change the authoritarian regulation of jobs and workplaces.
The white-collar unions are significant in three respects. First, they are occupational unions
mobilizing workers in similar jobs with no distinction between private and public sectors.
Occupational unions can easily penetrate the public sector in spite of the legal ban on unionization.
Thus, the emergence of white-collar unions was a serious threat to state labour regulation. Second,
they have a strong preference for industrial unionism because of occupational similarities across
firms. Third, it is highly likely that their economic interests are associated with social and political
reform since their jobs are mainly in the public services. These features are well described in an
analysis of white-collar unions by Suh (1998, p. 9).
The two characteristics of the contemporary white-collar movement in Korea - the
promotion of social reforms and the intensification of interunion solidarity - are,
therefore, a reproduction of the historical tradition of the labour movement on the one
hand, and the representation of white-collar workers' collective will to overcome the
weakness of enterprise unionism on the other. In view of the institutional and structural
context, it is remarkable that the contemporary white-collar labour movement in Korea,
even in its beginning stage, is in a transition period from business unionism to social
unionism and from enterprise unionism to industrial unionism.
| Table 2. Some features of federations of occupational unions |
| Name |
Date of
establishment |
No. of
affiliated
unions |
Membership |
| Council of Researchers' Professionals'
and Technicians' Unions |
32339 |
38 |
12000 |
|
| National Federation of Clerical and Financial
Workers' Unions |
27 Nov. 1987 |
85 |
25000 |
|
| National Federation of Journalists' Unions |
26 Nov. 1988 |
43 |
13600 |
|
| National Federation of Hospital Unions |
17 Dec. 1988 |
98 |
35000 |
|
| Council of Democratic Publication
and Press Unions |
16 Jan. 1988 |
18 |
1752 |
|
| National Council of University
Employees' Unions |
1 Feb. 1999 |
54 |
9200 |
|
| National Council of Unions of Facility
Maintenance Employees' |
28 Jan. 1989 |
50 |
4500 |
|
4. Challenges to unions: Economic liberalization and globalization
The impact of globalization
As political liberalization contributed significantly to the introduction of "new rules of the game"
in the political arena, so open competition was encouraged in the national economy. In the state-led capitalism practised in the Republic of Korea, the market had long been distorted by
government intervention. Strategic industries and big business enjoyed tremendous benefits in the
shape of cheap loans, tax exemptions and tariff rebates. The government invested heavily in
strategic industries and protected big business from foreign competition. But the structure of
market competition suddenly changed as the state retreated from the forefront of the national
economy in response to external pressure to open national markets and follow the international
trend towards free trade.
Changes in economic structure and in markets took place in two stages: economic liberalization
from1988 to 1993 and globalization from 1994 to the present. This distinction is peculiar to the
Korean context in that people began to pay attention to globalization when the Kim Young Sam
government used the concept (segeywha in Korean) as a political slogan. The economic changes
after 1987 were understood as a parallel between economic liberalization and political
liberalization with a withdrawal of state intervention in the national economy. In fact, globalization
attracted public attention with the sudden collapse of socialist countries and the establishment of
WTO in 1993, as a consequence of the Uruguay Round. However, neither government nor
business knew how to prepare for the changes in world markets. Organized labour was no
exception.
The Kim Young Sam government turned the focus of economic policy onto globalization in
1994, when the national economy entered a serious recession as a consequence of incomplete
industrial restructuring. At that time the Korean economy was fully incorporated into the global
economy. In the global economy, capital and services move fast and without restriction across
national boundaries, due to advanced information technology. As many writers stress,
globalization fundamentally changes the traditional relations between capital and labour since it
enhances the fluidity of capital and services across nations, while information technology lowers
the input of labour in manufacturing goods. In a global economy capital can move anywhere in
pursuit of cheap labour and less regulation. Thus, globalization reduces employers' need to
negotiate with unions when they demand higher wages and better protection. Globalization has
become so universal in capitalist countries that business takes full advantage of it to avoid
challenges from unions and state regulation, while unions have to lower their voice to maintain
job security in the face of flexible production. Just as unions in advanced capitalist countries are
all in trouble under a global economy, so the worldwide change may inflict a fatal blow on the
Korean unions which have only just settled after from the turmoil of 1987.
First of all, the introduction of flexible production is a menace to unions. Flexibility has three
distinct aspects: employment, wages and skills. Employment flexibility means job instability for
workers and a fundamental change in their perception of firms. Workers are no longer paid by
contribution and seniority but according to merit and ability once wage flexibility is introduced.
Finally, workers are obliged to learn a range of skills in preparation for product diversification and
new production technology. The shift in managerial strategy to flexibility was a great shock to
Korean workers who were familiar with life-long employment, high commitment to the firm and
a seniority-based wage system. Management attempts to introduce flexibility thus provoked very
severe conflict between capital and labour. The situation caused tension during the Kim Young
Sam regime from 1993 to 1996, but unions had to accept these changes when the government
decided to join OECD in 1996. The changes brought about by flexible production and union
response can be summarized as follows.
First, numerous workers lost their jobs because of the closure of many labour-intensive firms,
notably in the clothing industry and textiles. Rising labour costs were the main reason for
bankruptcy, and many employers decided to move to less developed countries in central America
and South-East Asia in search of cheaper labour. Capital flight and overseas investment affected
the industrial parks and export-processing zones where light manufacturing was concentrated. This
caused a sudden drop in the membership of FKTU and KCTU during these years.
Second, the conglomerates began to downsize and lay off workers in order to reduce their debts
and increase profitability. This was the first time that the employees of conglomerates experienced
job instability and the collapse of life-long employment. FKTU and KCTU expressed strong
opposition to the managerial strategy but could not stop it.
Third, the privatization of state-owned enterprises and public services was a controversial topic
because of their accumulated deficits and negative effect on economic growth. Globalization
legitimized and strengthened the argument that public enterprise cannot compete with the private
sector in terms of efficiency and productivity. It is commonly accepted that a bureaucratic
hierarchy, lack of incentives and guaranteed job security are the main factors undermining
efficiency and productivity in the public sector. When government started to discuss the possibility
of selling and privatizing state-owned enterprises in 1994, public-sector unions expressed strong
and persistent opposition, and called a general strike when it was carried out. As the public utilities
had long held a monopoly position, the unions in that sector were well-organized with a high
commitment to leadership. Thus, the government inevitably collided with strong unions such as
the Korea Electronic Power Corporation and Korea Telecommunications. Public-sector unions set
up a joint committee to oppose privatization and waged serious and violent struggles in 1994 and
1995. KCTU supported the struggle and public-sector unions became the main agent of so-called
democratic unionism. The confrontation continued until 1998 when the Kim Dae Jung government
announced an official schedule of privatization to overcome the economic crisis. At this time, no
opposition was heard because it was channelled through tripartite negotiations that included FKTU
and KCTU.
Fourth, the conglomerates took huge foreign loans in order to move into new areas such as
information and financial services as a means of industrial restructuring. Unfortunately, the new
industries in which they invested had little effect on job creation and the reduction of
unemployment. Instead, financial deficits accumulated and eventually exploded into the foreign
debt crisis of December 1997.
Union struggle and labour orientation
FKTU and KCTU began to cooperate in the struggle to gain managerial initiative. From 1993 to
1995 there were large-scale strikes against the government's privatization policy and downsizing
in the conglomerates. The national centres, FKTU and KCTU, cooperated closely at this time to
achieve their common goals of maintaining job security and protecting the rank-and-file from
massive lay-offs. They also drew up alternatives to the new wage and promotion system that big
firms were trying to introduce. Employers wanted to reduce the seniority element in wage scales
and promotion systems and to reward workers according to merit and ability. Unions contended
that this would undermine the national employment system which maximized worker commitment
to the company. In spite of strong union opposition, the new pay schemes and promotion systems
were gradually introduced in most big firms during these years and FKTU and KCTU finally set
the amendment of labour codes as a new target.
The conflict surrounding job security and pay schemes significantly affected labour orientation.
First of all, political unionism began to lose its attraction for the working class. The "democratic
unionism", which was associated with politically active and radical factions of the working class,
dwindled and shrank. Attention was focused instead on union democracy. This does not mean that
political unionism died out completely or disappeared from the scene. There was a disparity
between the national centre and local unions. As Ramos (1981) observed in the case of Japan,
while the national apex body attempted to pursue worker interests through political routes, local
unions were more concerned with economic well-being and better working conditions.
The rapid economic transition altered the structure of the labour market. Workers who were
laid off by large firms tried to find new jobs in the service sector. Small-and-medium-sized firms
in competitive industries went out of business or relocated to less developed countries in search
of lower wages. Managerial innovation and industrial restructuring fragmented the labour market
and disrupted industrial relations. Increasing heterogeneity in labour markets and intensifying
market competition turned yesterday's colleagues into today's rivals.
The economy, wages and employment
The turn to a market-oriented policy yielded considerable results in the first half of the 1980s
owing to the sudden economic recovery in world markets and an improvement in the domestic
industrial environment. High economic growth continued until 1988. Surprisingly, the political
turmoil and labour disputes of 1987 did not disrupt economic growth. On the contrary, the growth
rate was over 10 per cent for three years before and after 1987. A sudden drop occurred in 1989
and the decline continued thereafter. Although there were no signs of crisis in terms of economic
indices, the economy has experienced various "crisis phenomena" since 1989 (see table 3 for
economic indices, wage trends and employment). The Rho and Kim governments warned that
economic decline would result from political turmoil and labour unrest. Unions accused the
government of using the term as a political tactic to suppress the legal demands of workers. For
instance, an official alert about economic recession was made every spring when wage
negotiations started in all industries. Almost a decade after 1989, and after government warnings
of recession, numerous crisis symptoms were actually observed. They included a growing balance
of payments deficit, high inflation,(Endnote 3) wage hikes,(Endnote 4) excessive expansion of service-related
consumption, external pressure to open the domestic market especially from the United States, and
finally, the decline of international competitiveness. The GNP growth rate was only 5 per cent in
1992, the lowest since the collapse of the Yushin regime. This rate, still better than the European
average, was hardly acceptable to the Korean people who had become accustomed to high growth
of about 10 per cent for many years. The economic crisis afflicting the Roh and Kim governments
had many causes: exhaustion of the government's export-promotion strategy, the partial failure
of structural adjustment in industry, delayed technological upgrading, market opening to foreign
manufacturers and foreign capital, and skyrocketing labour costs caused by the wage explosion
after 1987.
| Table 3. The economy, wages and unemployment: Increase rate (%) |
| Year |
GNP |
Investment |
CPI |
Real wage |
Unemployment |
| 1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997 |
9.3
5.4
13.5
8.3
7.1
12.9
10.1
9.7
7.6
-2.2
6.7
7.3
11.8
9.4
6.9
12.4
12.0
11.5
6.2
9.2
9.1
5.1
5.8
8.4
8.7
6.9
5.5 |
24.8
20.9
25.2
31.8
28.6
26.5
28.3
32.5
35.8
31.9
29.9
28.9
29.4
30.6
30.3
29.2
30.0
31.1
33.8
37.1
39.1
36.8
35.2
36.2
37.4
38.8
35.3 |
13.4
11.7
3.2
24.3
25.3
15.3
10.1
14.4
18.3
28.7
21.3
7.3
3.4
2.3
2.5
2.6
3.0
7.1
5.7
8.6
9.3
6.2
4.8
6.2
4.5
5.0
6.6 |
7
5.2
8.0
6.1
3.3
17.5
19.9
18.0
8.4
-4.1
-0.5
7.9
7.4
6.3
5.6
5.4
7.1
8.4
15.4
10.2
6.9
8.9
5.8
8.7
5.2
6.9
2.4 |
4.5
4.5
4.0
4.1
4.1
3.9
3.8
3.2
3.8
5.2
4.5
4.4
4.1
3.8
4.0
3.8
3.1
2.5
2.6
2.4
2.3
2.4
2.8
2.4
2.0
2.0
2.6 |
| Source: Ministry of Labour, Yearbook of Labour Statistics, annual; National Statistical Office, Social Indicators in Korea, annual. |
Two points are worth mentioning.
First, business made huge investments in information and advanced technology during the Kim
government (1993-1997) as reflected in the high investment rate during this period. This indicates
that business chose investment as the best strategy for crisis management. But, unfortunately, most
investment was procured from foreign loans and government could not control the conditions of
such loans. The annual repayments caused a sudden drain of foreign currency holdings in the
second half of 1997 and, eventually IMF intervention in December 1997.
Second, unions distrusted attempts by government and employers to weaken worker demands
for new labour laws by stressing the economic crisis. Although there were signs of a downturn in
the economic indices, unions contended that this was by no means a "crisis". In addition, the
national economy made a sudden recovery in 1994/1995 mainly owing to the short-lived boom in
semiconductors. Most conglomerates reported higher profits in these two years. Firms seemed
prosperous and money flowed everywhere. In this atmosphere, union distrust of government and
business deepened. No one recognized, however, that the national economy would soon be in real
trouble.
Wages and employment
It is worth studying the effect of the wage explosion in connection with the decline in political
activism among labour unions. In spite of the rapid decline in international competitiveness and
firms' inability to pay, wages have risen steadily at a pace well above productivity rates since
1987. Moreover, working conditions have gradually improved, with a shorter working day and
better fringe benefits including children's education and housing allowances. Improved working
conditions, the valuable fruit of the great struggle, promote worker compliance and commitment
to firms, bringing employees back from street rallies into the workplace. As usual, the unlimited
labour supply in the private sector weakens workers' bargaining power so that unskilled workers
are prone to political activism. But better working conditions and a labour shortage in the new
sectors of industry caused worker interest to shift from political unionism to economic unionism.
Intensified competition in domestic markets as a consequence of economic liberalization and
globalization favours compromise between employers and workers in their common fear of
bankruptcy and unemployment in the midst of economic recession. This explains the change in
labour orientation from the political to the economic and pragmatic.
5. Unions and the politics of crisis management: Labour reform and conflict
IMF regulation
In 1998, the Republic of Korea introduced an IMF austerity policy. The Kim Dae Jung government
had no other option but to accept the terms of the IMF intervention, whose main goal was
economic stabilization. The direction of the reform policies was imposed before Kim's
government was inaugurated. However, implementing the policies and resolving conflicts of
interest depended on the political capacity of the new regime. It is not surprising to find more
congruencies than divergencies between IMF recommendations and Kim's reform which had been
presented to the public during the Presidential election. But it remained uncertain how far the IMF
package was consistent with and supportive of Kim's political platform, described as a "democratic
market economy". This is a broad and abstract concept that fits different types of liberal and
capitalist economies, in contrast to the German concept of a "social market economy" which is
closer to welfare capitalism. There was no disagreement with Kim's strategy of strengthening the
market function in the national economy through a series of deregulation and privatization
policies, but how far, in what ways, and in which direction, caused heated debate and conflict
between government, employers and workers.
This explains the delayed reform of conglomerates and financial institutions, which is the key
to economic recovery. The "democratic market economy" has three elements that distinguish Kim's
government from previous regimes: a better balance between large and medium-sized firms in the
national economy, more equity, and more reliance on the market. President Kim Dae Jung is well-aware of the inefficiency and negative effects of state-led capitalism and rapid growth with heavy
reliance on conglomerates. But the crisis management policies prepared and implemented by the
Kim government included remedies that were challenged by business and the upper class. The
government planned to break up the conglomerates into smaller and more manageable units, but
employers argued that restructuring these "chaebols" would ruin national competitiveness. The
business community and shareholders were alarmed by the policy emphasis on more equity since
this was conceived as income transfer from the upper class to the workers. In addition, people
asked how the government could improve welfare under an austerity policy. Some critics stressed
that more reliance on the market could be detrimental to social justice, as was the case in the
United States.
Kim's government imposed a variety of reforms on the conglomerates. These included reducing
the firm's debt ratio to 200 per cent, increasing transparency in all transactions, and selling
unproductive and inefficient firms to foreign investors. Government empowered the Bank
Surveillance Office to terminate financial transactions and recall bank loans if chaebol firms could
not satisfy these conditions. As the IMF package emphasized deregulation and structural
adjustment, Kim's government put more emphasis on the market economy than on democratic
issues such as equity and welfare. In the economic crisis efficiency took priority over social
justice. This provoked discontent among wage earners in the lower and middle classes who had
voted for him in the Presidential election. Employers and shareholders also expressed strong
doubts about some aspects of the economic reform, contending that selling out strategic firms
would lead to the breakdown of industrial competitiveness in world markets. Crisis management
meant implementing unattractive and unpopular policies, but without economic recovery conflicts
of interest between different social groups would constrain the capacity of the ruling party.
Kim's power base and the first Social Compact
Kim Dae Jung's election victory did not lie in convincing voters of his party's capacity but in the
sudden breakdown of the national economy. Voters' confidence in the ruling party collapsed with
the foreign debt crisis that occurred a month before the Presidential election. President Kim's
power base is much weaker than that of the previous regime in several respects.
Even though the ruling party is supported by workers, the middle classes and intellectuals, its
power to force the conglomerates to restructure is very limited. The austerity policy is likely to
raise popular discontent against the Kim government. With inflation above 10 per cent, a large
proportion of Koreans are suffering from wage cuts and drastic increases in interest rates. Mass
unemployment has hit consumption and deepened the recession. The longer the austerity policy
continues, the more discontented the population becomes.
President Kim decided to construct a consensus-building mechanism, i.e. a tripartite committee
of government, employers and workers. In January 1998, shortly after his election victory, he
announced the creation of a tripartite committee responsible for negotiating pending issues and
setting reform agendas. After three weeks of heated debate, the committee reached a compromise
on ten areas of reform, which specify 90 items regarding the social protection of workers,
economic restructuring, economic policies, industrial relations and labour laws. They include the
structural reform of conglomerates, economic stabilization, legalization of lay-off, government
protection of the unemployed, improvement of social security and the construction of a social
safety-net. This is the first Social Compact since the liberation. It contains agreements on various
issues as follows:
(i) Government and employers will construct nation-wide organizations and prepare a policy
package to combat unemployment;
(ii) All parties represented on the tripartite committee will help improve job security by
introducing work-sharing.
(iii) All parties will strive to minimize lay-offs and to support firms in financial trouble.
(iv) All parties will do their best to eliminate unfair labour practices and establish monitoring.
(v) The policy-making process will be open to labour unions. Unions will participate in making
and implementing important policies affecting wage-earners' standard of living.
(vi) All parties have rights and duties in restructuring conglomerates.
(vii) The reform of public enterprises will reflect labour-manager agreements.
(viii) The teachers' union will receive official recognition.
(ix) All parties will strive to improve worker participation in management.
(x) Labour laws will promote industrial democracy.
The items listed above indicate that government and employers accepted worker demands
for participation in policy making in favour of industrial democracy. The agreement helped to
placate angry workers and labour unions that blamed government and employers for the foreign
debt crisis. Without this agreement worker discontent could have exploded into massive turmoil
and labour unrest just after the IMF intervention and the serious economic recession of 1998. In
this respect, Kim's government succeeded in including organized workers in the politics of crisis
management and persuading them to support the restrictive economic policy imposed by the
"Technical Agreement" with IMF. However, the success of the first phase of crisis management
did not last long before the government was confronted with a serious dilemma in that it was
unable to implement the Agreement fully. The government could not pacify employers who
insisted that massive lay-offs were essential in a period of austerity. Unions contended that
employers were betraying the spirit of the Social Compact. A tremendous number of firms
collapsed during the first half of 1998. Government ordered 15 financing companies to shut down
as well as two conglomerates. As unemployment soared with the passage of time, unions began
to demand job security in accordance with the Agreement. Workers at Hyundai Motor Company,
the largest automobile firm in the country, went on strike in protest against a management decision
to lay off a large number of regular workers and reduce production lines and facilities. The
struggle was not violent as in the authoritarian past, but continued for almost two months with
KCTU support. KCTU leader Kap-Young Lee mobilized 120,000 workers from 16 major cities
in the struggle against the lay-off policy and job instability. In spite of government efforts to act
in the spirit of the Social Compact, the economic crisis and soaring unemployment undermined
the tripartite committee. There was a lack of trust between the three parties and increasing
discontent among the rank-and-file.
The limits of tripartite negotiation
The compromise satisfied the conditions of the "Technical Agreement" signed by the previous
government. The Social Compact provided President Kim with a firm foundation on which to base
the rigorous reform policies. During the first half of 1998 he frequently reminded the public of the
spirit of compromise whenever the media accused the government of delaying the necessary
reforms. At first he succeeded in gaining working-class confidence and meeting challenges from
business and shareholders. But KCTU threatened to withdraw from the tripartite committee unless
the other members accepted the employment security laws. Finally, the Confederation pulled out
in February 1999, claiming that the committee had no power to implement any agreement that it
reached. FKTU, another labour member of the committee, also threatened to withdraw unless its
demands were satisfied. These demands corresponded closely with the points that caused KCTU
to withdraw: they included six important questions that had remained unresolved since the labour
code was amended. The unions wanted to stop employer-led lay-offs and to ensure labour-manager
consensus prior to dismissal. They also wanted to introduce an Employment Security Act, to
prepare complete unemployment protection, and to improve worker participation in management.
They wanted to introduce work-sharing programmes without wage cuts, and finally, to ensure full
implementation of the tripartite agreement and recognition of the legal and political status of the
tripartite committee. In other words, the second tripartite committee achieved no more than the
first committee. In fact the first agreement, containing 90 items of reform, exceeded the political
capacity of Kim's regime and, to make matters worse, the relative success of the first Social
Compact turned out to be a tremendous political burden. Trade unions began to organize a general
strike just after they withdrew from the committee in the spring of 1999.
There are several reasons for the very limited success of tripartite negotiation in the Republic
of Korea. First of all, although it takes the form of a tripartite agreement, any compromise is in fact
an élitist agreement between leaders at national level. Participation in making policy and
monitoring its implementation is required for tripartism to be effective. An organizational and
administrative infrastructure is needed to put any tripartite agreement into effect. However, there
are no organizational and administrative bodies at regional and local level through which
employers and workers can collabo rate in implementing policies. It is true that the Social Compact
as a national consensus helps to calm unrest and reduce social costs; it also strengthens the
political platform on which the ruling party has based its reform policies. However, it is an élitist
committee without official networks through which business and labour can work together to
produce results at local level; it is therefore extremely fragile. When KCTU threatened to strike
just after it withdrew, employers found that the committee was not an effective channel of
communication. As the economic crisis continued deeper and longer than expected, serious doubts
arose about the role of the tripartite committee and its political significance. The broad and vague
political slogan "democratic market economy" could not persuade the partners to be faithful to the
spirit of compromise. Of the many doubts and questions raised, three are worth mentioning here.
First, to what extent should conglomerates implement downsizing and was the restructuring
imposed by IMF and government truly necessary for economic recovery? President Kim seemed
to emphasize the role of small- and medium-sized firms in the national economy but that did not
have to mean the entire break-up of chaebols into independent firms. It meant that economic
concentration should be reduced so that conglomerates would have less influence on politics and
society. But, how far, in what degree, and in which direction remained uncertain. It is still
questionable whether downsizing chaebol firms to fulfill government guidelines ensures
competitiveness in world markets.
Second, the legalization of lay-off promotes labour market flexibility whereas long-term
employment increases labour costs. However, mass lay-offs reduce organizational adaptability to
new technology and rapidly changing business environments. Since the mid-1980s some Japanese
firms have adopted American-style employment systems in response to the rapid decline in
international competitiveness. But will American-style flexibility result in productivity
improvement in the Republic of Korea, where firm-centred employment is a long tradition, and
to be dismissed means "social death", as there is practically no chance of re-entry into larger firms
which prefer to recruit young workers without job experience? Firm-centred employment
maximizes functional flexibility as employees acquire multiple skills by rotating through many
tasks. Does the replacement of functional flexibility with flexibility in the size of the workfroce
guarantee a rapid recovery from economic recession and high productivity growth, as neo-liberal
market theorists claim? No clear answer has emerged as yet.
Finally, will the austerity policy be conducive to economic recovery in spite of the drastic
decline in domestic consumption as a result of wage cuts, tax increases and soaring inflation?
Wage earners are very doubtful about the government policy of "hardship-sharing" manifest in
the sudden reduction of annual income by almost 30 per cent. It is now believed that the debt crisis
was caused by an inflow of tremendous foreign loans to conglomerates and undisciplined
investment in production facilities. If we admit that large firms and financial institutions are
primarily responsible for the foreign debt crisis, does it help the situation to make them bankrupt?
What compensates for numerous medium-sized firms, financially solid and prosperous in the
product market, if they are in danger of bankruptcy because of the frozen money market? If we
accept that there is no other option except to endure economic hardship, what can console
frustrated and distressed wage earners? All these questions await a clear answer. The "democratic
market economy" is not so clearly thought out as to persuade wage earners to sit and wait until
living conditions get better. Moreover, misgivings are growing, since government policy packages
have frequently revealed inconsistencies and contradictions.
Unemployment as a bottleneck
Unemployment is a situation that wage earners cannot tolerate over a long period. Whereas
inflation is the most urgent issue for business, wage earners are mostly concerned about
unemployment. The National Statistics Office announced that the number of unemployed had
almost tripled in the year after the IMF intervention, reaching 1,850,000 at the end of 1998. The
unemployment rate soared from 3.1 per cent in December 1997 to 4.5 per cent in January, 5.9 per
cent in February, and 6.5 per cent in March 1998. When underemployment was included, i.e. 17
hours or less in a week, the rate was over 10 per cent, the highest for 40 years. Statistics for 1961-1998 show that the GDP growth rate fluctuated between 5 and 15 per cent except for a sharp drop
to -5 per cent in 1981. Inflation was also unstable during the 1960s and 1970s, culminating at 29
per cent in 1979, the year when the Yushin regime collapsed with the assassination of President
Park. Since then, inflation has been relatively stable throughout the 1980s and 1990s. However,
the foreign debt crisis terminated the stability and inflation went up to 13 per cent within a few
months of the IMF intervention.
Inflation is not new to the Republic of Korea, where rapid growth was inevitably accompanied
by moderate rates of inflation. However, high unemployment is entirely new to the Korean people
and the government. As reflected in the overall trend, successful economic growth curbed
unemployment for four decades, the rate remaining below 5 per cent since the early 1970s. Korea
has been praised for achieving almost full employment without a rigorous labour market policy.
But the record has been broken by an 8 per cent unemployment rate that approximates the average
for European countries. Although it may be inevitable, the steep increase in unemployment is
problematic.
More serious is the fact that the government is unprepared for mass unemployment. It is often
contended that the country is least prepared for unemployment and worker protection since
joblessness has been solved by the "growth-first policy". Policy-makers in government were
convinced for decades that speedy growth would create plentiful jobs for skilled and unskilled
workers alike, and that allocating a government budget to unemployment programmes was
wasteful. This explains why the government did not respond to unemployment until the mid-1990s
and delayed the introduction of employment insurance until 1995.(Endnote 5)
Unemployment policy differs considerably in advanced capitalist countries, but all
governments make use of three programmes with varied emphases: unemployment benefits,
macroeconomic policies to stimulate the economy, and direct intervention in the labour market.
Some governments choose passive measures, concentrating on unemployment benefit and indirect
macroeconomic policies. Others adopt active labour market policies (ALMP) in a combination of
job creation, job replacement and job training. Major research in European countries shows that
ALMP can be a valuable and effective method placing the unemployed in job vacancies, training
workers with obsolete skills for new demand, and creating new jobs. The Republic of Korea lacks
this concept. ALMP does not exist and there is no agency responsible for coordinating and
managing complicated labour administration, such as the Swedish AMS and the German
Bundesanstalt.
President Kim has attempted to expand government intervention in order to keep the Social
Compact, allocating a very large special budget to this policy area. The unemployment budget for
1998 amounted to US$11 billion, one-third of which was reserved for unemployment benefits and
living allowances; a small portion was for job creation, job replacement and job training. The sums
allocated represented about 13 per cent of the government budget for 1998. The allocation was
increased to US$16 billion in 1999. As far as the size of the budget is concerned, the government
effort was remarkable. The reverse side of the policy was to alleviate the burden on employers by
permitting the right of lay-off. Policymakers believed that foreign capital would come back once
the right of lay-off was guaranteed, and unemployment would then be resolved naturally. President
Kim repeatedly emphasized that it would not be long until the crisis ended, possibly within one-and-half years. At the beginning stage of policy implementation, however, the unemployment rate
was still expected to go up as a result of the massive downsizing of chaebol firms that would be
completed in the second half of 1999.
Continuing high unemployment puts tremendous pressure on Kim's regime. It is both a cause
and an effect of the politics of reform. If unemployment continues over a considerable period and
other reform programmes are delayed, it is likely that the government will face a serious political
challenge from its supporters, i.e. wage earners. In addition, the lack of experience in labour
market intervention and the loose organization of labour administration make labour politics
ineffective. Unemployment is a bottleneck in the politics of reform. It is fair to say that the success
of reform depends on maximizing the feedback effect, curbing unemployment effectively,
introducing active labour market policies and establishing an administrative infrastructure to carry
out the spirit of the Social Compact.
Improvement of human rights
The Republic of Korea is notorious for human rights abuses - civil rights, political rights and
worker rights. For three decades of authoritarian repression, torture, imprisonment and illegal
dismissal were inflicted on political dissidents and social and labour activists. Human rights are
the most sensitive issue for leaders of the labour movement and rank-and-file workers alike, since
political oppression is an obstacle to the improvement of working conditions and workers'
standard of living. It has been widely recognized that the Republic of Korea is not among the
countries with advanced human rights by international standards. This explains why Amnesty
International has always expressed deep concern at the country's record, especially with regard
to the labour movement. In this arena the violation of human right occurs frequently and
apparently through both formal and informal methods. However, President Kim Dae Jung
promised to improve human rights and eliminate illegal and unfair treatment of political dissidents
and labour activists in his inauguration speech. The recognition of human rights has been improved
under the present government. In this regard, President Kim deserves praise for taking some
positive steps.
In June 1998 when President Kim visited the United States he announced a political schedule
for the establishment of a National Human Rights Committee to monitor and indict illegal and
violent actions on the part of ruling groups including bureaucrats, the police and employers. His
promise was fulfilled in March 1999 when a law was passed creating the National Human Rights
Committee. The committee is a politically neutral and financially independent organ in charge of
all official tasks concerning the violation of human rights. It is too early to say how much it will
contribute to improving human rights and to eliminating brutality and violence at workplaces.
However, the establishment of the Committee is a sign of progress. Before the law was passed the
government released most of the labour activists who were in prison, in celebration of March 1st.
Over 400 activists were imprisoned in 1998 but many were released in 1999. There are still many
laws that hold back the progress of human rights; these are the focus of discussions on legal
reform.
In spite of the improvement, there are still many human rights abuses in the labour movement
and employment relations. Such cases increased dramatically with the deepening of economic
recession and mass dismissals during the foreign debt crisis. Unemployment hit disadvantaged
groups disproportionately, so that women, unskilled workers and casual labourers were the first
to lose their jobs. Although legislation to prevent discrimination against women at work was
introduced by the previous government, young women workers were the first to be dismissed since
people did not think of them as the family bread-winner. This was accepted without resistance in
the unprecedented economic crisis, but the process hid many cases of abuse. Male workers
threatened with dismissal were no exception. Most employees were forced to accept sizeable wage
cuts in the face of economic disaster. Otherwise their firm would close down because of
bankruptcy and restrictive government policy.
Democratization has promoted concern for human rights since the early 1990s. Leaders of
social movements criticized government for using riot police to break industrial strikes and for
banning collective action and street rallies. Violation of rights falls into four categories.
First is unfair labour practice. Before democratization, unfair labour practice occurred in most
workplaces, regardless of firm size. Physical punishment was not uncommon. Employers enforced
overtime and if employees refused to work more than their regular hours they could be dismissed
without notice.
Second is the imprisonment of unionists who organize protests and strikes. Industrial disputes
tended to result in damage to all parties: wounded police officers, arrested workers and broken
production facilities. The government used riot police to suppress worker protest, while employers
hired guards to protect their production facilities. Even when workers declared a peaceful protest,
riot police were deployed in front of the factory. Unionists who organized protests and respected
all the procedures stipulated in the Labour Union Laws and the Laws on Arbitration of Industrial
Disputes were also subject to arrest on charge of "obstructing business". In1998, when KCTU
called a general strike against the restructuring policy that generated and legalized massive lay-offs, many strike leaders were imprisoned. The story of Mando machinery indicates how strikes
were destroyed by the riot police and the NSL(National Security Law). The Mando strikers were
attacked by 10,000 riot police and dozens of workers were arrested and beaten by armed
policemen. The strikes occurring in the years just before and after IMF intervention yielded a long
list of arrests (Amnesty International, 1999). Most were important union figures, including the
Secretary-General of KCTU and the President of the Korean Federation of Public Sector Unions.
The number of arrests fluctuated over time, culminating with 611 detentions in 1989. It then
declined gradually but began to show a steep increase with the amendment of labour laws in1996
and the economic crisis of 1998. Table 4 shows the number of workers imprisoned from 1987 to
1995 and the charges made against them.
| Table 4. Number of workers in prison by charge, 1987-1995 |
| Cause of imprisonment |
No. of cases |
| Obstruction of business |
1433 |
| Use of violence |
892 |
| Violation of Arbitration Law |
513 |
| Violation of association and demonstration |
377 |
| Obstruction of government administration |
185 |
| Violation of prohibition on third party intervention |
163 |
| Violation of NSL |
144 |
| Forfeit of official document |
64 |
| Violation of Labour Union Law |
54 |
| Illegal intrusion |
50 |
| Use of explosives |
48 |
| Source: Korean Confederation of Trade Unions, 1996. |
Third, illegal dismissal caused concern during the economic crisis of 1998. As mentioned
earlier, the number of unemployed increased dramatically from 500,000 in 1997 to 1,850,000 in
1998. It is difficult to calculate how many people were dismissed illegally and how many were
allowed to petition their employer. Workers dismissed during this period rarely had an opportunity
to appeal because of the economic crisis and firms' desperate battle for survival. Unemployment
statistics indicate that the massive lay-offs mainly affected disadvantaged groups in the labour
market, who lacked skills, experience and education.
Fourth, discrimination on the basis of gender or physical defect is a serious problem. The
Republic of Korea is one of the countries that offer lower wages and fewer opportunities of
promotion to women and disabled workers. During the last two decades the average wage for
women was 60-70 per cent that of men, and disabled people could not find jobs in the formal
sector. Ironically, however, female workers were over-represented in export manufacturing in
those years. Employers with labour-intensive factories liked to hire young female workers to
operate assembly lines in order to reduce labour costs and to accelerate labour turnover. Moreover,
female workers could not appeal to courts or resist employer decisions on termination of
employment. This explains why female workers constituted the main force of the labour protest
in the 1970s. But this climate has changed rapidly since the labour dispute of 1987.
The Kim Dae Jung government introduced legislation to outlaw gender discrimination in
employment and promotion in 1998. The law stipulates equality of job opportunity and promotion
in internal labour markets between men and women, with sanctions against employers who do not
respect the law. Government also encourages the recruitment of disabled workers by providing
wage support to employers who offer them jobs and training. Despite these efforts, feminist groups
and social organizations claim that female workers were the main group to be sacrificed in the
massive lay-offs of 1998. This claim is supported by statistics that show a sharp decline in the
number of young, female, and unskilled workers compared to other demographic groups.
There are many legal and institutional constraints that undermine trade union activities and
workers' rights to organize, negotiate and express opinion. Trade unionists began to request
international organizations to exert pressure on the government. Such organizations have sent
inspectors and observers quite frequently since the labour dispute of 1987. Their reports to the
Government of the Republic of Korea contain a common recommendation that labour laws and
other legislation should be reformed in the light of ILO Conventions. The ILO examined two
complaints from Korean trade unions and sent an official letter to the government in November
1998 (Amnesty International, op. cit.). It reads: "The Committee must express its deep concern
over the fact that trade union leaders and members are still detained or on trial, it would appear,
for activities linked to collective labour disputes. The Committee is convinced that it will not be
possible for a stable industrial relations system to function harmoniously in the country as long
as trade unionists are the subject of detentions and judicial proceedings." Although the Republic
of Korea became a member of ILO in 1991 and joined OECD in 1996, the government has still
not ratified ILO Convention No. 87 on freedom of association or Convention No. 98 on workers'
right to organize and to bargain collectively.
6. Politics in unions: Leadership and recent issues
Recent issues
In the midst of the economic crisis of 1998, workers at the Hyundai Motor Company went on
strike to demand the unconditional repeal of the company's lay-off policy, claiming that it violated
the spirit of the Social Compact which required that efforts be made to avoid lay-off prior to the
final decision. Since the Hyundai Motor Company, the number one auto manufacturer in the
country, was a major contributor to exports, government observed the strike carefully and studied
its effect on unions in other sectors. The strike continued for two full months from June to July
with no intervention from outside, e.g. shutdown of factories or attack by riot police. Government
tried to conciliate angry workers who were protesting against the mass lay-offs which were
declared unilaterally without negotiation with company unions. Workers claimed that the dismissal
of 10,000 workers within a few months was illegal and immoral. After two months the strike was
resolved peacefully with government mediation. Government successfully persuaded the employer
to minimize the lay-offs and also persuaded the union to accept the employer's promise of
maximum severance pay for dismissed workers. Government also accepted the union request that
strike leaders should not be punished or arrested and that the employer should not indict the union
for lost production.
This outcome gives the impression that the union won the strike and strengthened its power
to negotiate with the state and employers. But the opposite is true. The union lost the game and
lost its power to negotiate in the midst of unprecedented economic recession caused by the
austerity policy. The union of the Hyundai Motor Company is one of the strongest and most
militant in the Republic of Korea. The fact that Hyundai workers finally accepted the government
recommendation and the employer's lay-off schedule had a tremendous impact on the unions in
FKTU and KCTU. Lay-off was accepted. After this event workers main attention turned from
aggressive attitudes to defensive and pragmatic issues such as compensation and severance pay.
Industrial disputes rarely occurred in the latter half of 1998 and compensation became the most
important issue in dismissal.
In 1998, the government undertook four important tasks under IMF surveillance: legalization
of lay-off for labour market flexibility; privatization; reform of financial institutions;
rationalization of chaebol firms (conglomerates). All these programmes had a negative impact on
unions in terms of job insecurity, declining membership, and especially loss of the leading unions
in KCTU, i.e. unionized public enterprises. FKTU and KCTU collabourated in the struggle against
government policy, KCTU being more active and aggressive than FKTU. KCTU elaborated
counter-agendas: job sharing against lay-off, opposition to privatizing public enterprises and
introduction of Employment Security Laws. FKTU expressed support for this platform. They
developed six agendas in opposition to the second tripartite committee, claiming that the
committee functioned only to induce work |
