Labor union blocks new IBK head from entering office over wages

Industrial Bank of Korea CEO Chang Min-young, right, remains blocked from entering the bank’s headquarters in Seoul, Jan. 23. Yonhap

Chang Min-young, the new Industrial Bank of Korea (IBK) head, remains blocked from entering the bank’s headquarters in Seoul amid disputes with the state-run lender’s union over unpaid overtime wages and demands that they be exempt from the government-imposed total wage cap system, market watchers said Tuesday.

Authorities reportedly prefer paying the roughly 780 billion won ($580 million) in unpaid wages over time to ease the impact on IBK’s capital.

However, the union has rejected this, claiming that installment payments only exacerbate what they consider “ongoing wage theft.”

As for the wage cap, the Financial Services Commission is in a bind due to fairness concerns. The cap applies broadly to state-run institutions, so granting the IBK union’s labor demands could trigger opposition from other entities that have long complied with budget limits.

According to the financial market, the IBK union has blocked Chang from entering bank headquarters for 19 days. Chang maintains that discussions with the government are underway and progress is being made in forming “a broad consensus.”

The union, however, said it would continue blocking his entry until management provides a concrete answer on whether it can secure an exemption from the wage cap system.

The union says that the system has led to unpaid overtime, as those hours are compensated in the form of “leaves” that employees are unable to use the way they want.

This is not the first standoff between the IBK labor union and bank head.

A similar confrontation occurred with former IBK head Yoon Jong-won, whose first successful day at work came only after 27 days of union protests in 2020. It was the longest protest in the bank’s history.

The union also argues that the estimated amount of 780 billion won should be increased in line with a recent Supreme Court ruling.

The top court recognized that “ordinary wages” should be defined more broadly to include certain allowances, bonuses and fixed payments.

This expanded definition leads to higher overtime pay as it is calculated at 1.5 times the hourly ordinary wage.