Unionized workers at Seoul City's railway system withdrew their strike plans early Thursday morning after the management agreed not to pursue downsizing unilaterally.
The deal was struck about one hour before the union of Seoul Metro was to strike at 4 a.m., Yonhap News reported quoting a union spokesman.
"The management has agreed to reform management of the company toward the direction of enhancing citizens' safety and convenience," the spokesman said. "That means the management will consult the union before restructuring, although the management has downsized the company unilaterally."
The agreement came at the end of an 11-hour negotiation that began at a cultural center in Yongdap-dong, eastern Seoul.
President Lee Myung-bak warned Tuesday that his government would get tough with any illegal labor action, saying, "We will sternly deal with the illegal strike if (the labor union of) a state-run company launches an illegal strike at this difficult time."
Lee said in Washington Sunday that labor strikes, along with street rallies and security threats from nuclear-armed North Korea, have undermined South Korea's brand value, stressing the need to restore the rule of law and order.
Foreign investors have long complained about lukewarm attitudes of South Korean police in cracking down on illegal strikes and street rallies, apparently due to a decades-old tradition of anti-government rallies under authoritarian governments that pro-democracy forces have dubbed as lacking legitimacy.
Most industrial actions in South Korea are illegal as unionists tend not to abide by the law, which requires them to report to relevant authorities their intention to strike and undergo a cooling-off period and government mediation.
The 9,300-strong union, part of a public corporation that runs Seoul subway lines one through four, is locked in a wage dispute with Seoul Metro over the subway operator's plan to cut jobs by 20 percent and to allow private firms to operate some subway stations in a bid to streamline business operations.
The strike was expected to take place simultaneously with the strike of national railway workers but the union of Korea Railroad Corp. (KORAIL), which operates both inter-city and some subway lines linking Seoul with surrounding satellite cities, also put on hold their strike plans.