Korea's militant labor influence to continue

The Strategy and Finance Committee is in session at the National Assembly on Yeouido, Seoul, Wednesday. Yonhap

Presidential candidates seek union votes at expense of corporate efficiency

By Lee Kyung-min

The extremely militant labor unions in Korea are expected to wield an even stronger influence this year, empowered by the National Assembly's Strategy and Finance Committee swiftly pushing forward a bill whereby the boards of state-run organizations will be mandated to include a member representing unions, Wednesday.

The bill, if passed at the Jan. 11 plenary session of the National Assembly, will require 131 state-run and government organizations including the National Pension Service to include a union representative on its board of directors.

Also to be advanced is a related initiative of the country's financial unions that have long sought to legitimize appointing labor-recommended outside directors at financial services firms, including state-run lenders.

The Export-Import Bank of Korea (Eximbank) remains the first and sole state lender to have adopted the left-leaning, politically charged initiative last year. But its peers will come under mounting pressure to follow suit, cornered by the bill with a much broader mandate embraced increasingly by the two major presidential candidates mindful of the voting power of the country's over 2.8 million union members.

Whether and how fast the move will be followed by privately run financial service providers remains to be seen, given their longstanding reluctance to indulge risk factors undermining efficient corporate management.

The Korea Enterprises Federation issued a statement decrying the bill soon after it passed through the finance committee. “The bill will interfere with the function of the board of directors and hamper effective decision-making, thereby undermining corporate competitiveness,” it said.

Presidential candidates in rush

Lawmakers of the ruling Democratic Party of Korea and the main opposition People Power Party passed the bill only two and a half hours after a subcommittee under the National Assembly Strategy and Finance Committee convened.

This was an unexpected, unheard-of swift move that bypassed a 90-day deliberation that would have been overseen by a separate bipartisan committee.

Behind the rush was PPP presidential candidate Yoon Suk-yeol, who announced recently that he would make it a labor policy priority during his visit to the Federation of Korean Trade Unions, one of the two leading umbrella unions in Korea alongside the Korean Confederation of Trade Unions.

The opposition party candidate sought to win over labor votes, the significance of which is well understood by his opponent, Democratic Party of Korea candidate Lee Jae-myung. Lee through his aides had conveyed to key ruling party lawmakers that their inefficiencies came at the expense of the bill, which he views should have been passed months earlier.

Also indicative of the labor issue increasingly taking the center stage is the unified move coming on the heels of the approval of a separate thorny bill during a meeting of the National Assembly Environment and Labor Committee.

The so-called “time-off” bill recognizes hours worked by union members for labor-related issues as part of regular work, thus making them eligible for the same amount of monthly pay received by members of teachers' unions at state-run schools and educational entities.

The passing of the pro-labor bill was a major win for unionized teachers, a breakthrough from six failed attempts over the past few years at having it pass in a subcommittee for deliberation of the standing committee.