More than half of foreign biz in Korea view management-labor relationship as 'confrontational'

Members of the Korean Confederation of Trade Unions stage a strike in downtown Seoul's Euljiro, July 19. Yonhap

More than half of foreign firms operating in Korea said management-labor relations remain confrontational, a survey showed Monday.

This highlights continued concerns among foreign businesses that find hardline labor groups to be a major deterrent to expanding their presence in an otherwise attractive investment destination.

According to a survey commissioned by the Federation of Korean Industries, out of 439 foreign-invested firms here with at least 100 employees, 52 percent view management-labor relations as “confrontational,” while 5 percent say the relationship is “very confrontational.”

Only 7 percent of firms said relations seem “mutually cooperative.”

Korea’s management-labor relations were seen as less cooperative than other advanced economies, the survey showed.

Assuming Korea’s management-labor relations stand at 100, the figure was 122.0 for the U.S., followed by 120.8 for Germany and 115.0 for Japan. China’s figure came to 83.8.

About 64 percent of the respondents said Korea’s labor market was not flexible, while only 2 percent said it was flexible. A flexible labor market means employers can hire and fire employees easily.

Over 80 percent of the respondents cited management-labor relations and regulatory conditions as two critical factors affecting their long-term business plans.

About 13 percent said they considered reducing or even withdrawing operations from the country, frustrated by industrial and labor regulations.

More than 35 percent of the respondents held the opinion that politically motivated strikes spearheaded by large labor organizations topped the list of areas needing immediate improvements.

Around 26 percent said labor strikes in the form of illegal occupation of the workplace needed to be abandoned.

Some 34 percent said they had difficulty in reassigning employees and carrying out layoffs.

Also cited as hindrances to businesses were the 52-hour workweek system, inflexible wage systems including state-set hourly minimum wage and seniority-based pay.