Industrial unionism has been a hot issue in Korean industrial relations in recent years. It differs from the enterprise-level organization that came to dominate union structure after it was enforced by the military regime in the early 1980s.
Due to its decentralized structure, the Korean labor movement has shown notable growth since political democratization and the "Great Labor Struggle" in 1987.
However, enterprise unionism began to reveal structural limitations in the eyes of the union leaders. The fragmented union movement was unable to cope with the government-led neo-liberal reforms in the wake of the economic crisis in 1997. It also failed to resolve the union members` growing concern over job insecurity stemming from a wave of corporate restructuring.
Furthermore, enterprise unionism, which is geared to the protection of its members` interests within the corporate boundary, tends to be indifferent to the sharp increase in irregular workers and their vulnerable employment conditions. This thereby contributes to the polarization of labor markets - between organized workers at large firms and unorganized workers at small firms or on irregular employment contracts - and leads to a crisis of solidarity in the labor movement. In this context, union leaders have given priority to an organizational transformation toward industrial unionism. This is a strategic move to cope with the weakening leverage of the union movement and the growing segmentation in the labor market.
Industrial unions have been built through the strenuous efforts of union leaders and activists over the past 10 years. After some union mergers to form "sectoral" or "occupational" unions in the mid-1990s - for example, the National Science and Technology Union (1994), the Regional Health Insurance Union (1994), and the National University Union (1997) - the first industrial union was born in February 1998. This was the Korean Health & Medical Workers` Union (KHMWU), which was transformed from the Korean Federation of Hospital Trade Unions. It was followed by a series of industrial unions - the Korean Financial Industry Union (KFIU, 2000), the National Union of Mediaworkers (2000), the Korea Metal Workers` Union (KMWU, 2001), the Korean Public Service Workers Union (KPSWU, 2006), and the Korean Transport Workers` Unions (2006).
In mid-2006, many large enterprise unions in the metal industry and the public sector, including the Hyundai Motor Workers Union, the Kia Motor Workers Union, the Korea Social Insurance Union, and the Korea Rail Workers Union, joined the trend toward industrial unionism.
As a result, industrial unions have had a greater membership than enterprise unions. The Korean Confederation of Trade Unions (KCTU) has been more active in transforming the union structure than the Federation of Korean Trade Unions (FKTU).
As of the end of 2006, 76.5 percent of the KCTU members have become affiliated with industrial unions, in accordance with its four-year plan of organizational transformation (2003-2007). By contrast, around 30 percent of the FKTU membership belongs to industrial unions, and only two industrial unions (Korean Financial Industry Union and Korean Taxi Workers Union) were formed in the 2000s.
The advent of industrial unions has posed new challenges and tensions in industrial relations. Those industrial unions have strongly called for centralized collective bargaining, but employers are reluctant to accept it. In particular, the industry-level bargaining imposed by industrial unions has generated some new issues that didn`t exist in traditional enterprise-level bargaining. First, employers do not have centralized associations to represent their collective interests in each industrial sector. This means that industrial unions have no bargaining partner.
Therefore, the unions have pressured employers to form industrial associations over recent years. Some industrial unions, such as KHMWU, KFIU, and KMWU, succeeded in forcing employers to establish their associations.
However, those employer associations have limited coverage and little experience in centralized representational functioning, and most of the large enterprises in the metal industry have refused to join the associations. As a result, the centralized bargaining pursued by the industrial unions is still not as well-established as intended.
Secondly, a couple of structural issues, dwelling in industrial bargaining, have led to employers` recalcitrant attitude toward the new bargaining system. Some industrial unions (i.e. KMWU and KPSWU) have demanded a multi-tier bargaining structure, comprised of nationwide, regional and enterprise-level bargaining, in their own industrial sectors. And, they have also allowed "dual strike action" in their by-laws, implying that industrial unions and their affiliated local unions are both able to take strike action.
The multi-tier bargaining structure and dual strike action have been the core issues leading employers to complain about the increasing bargaining costs and resist industrial bargaining. In addition, a wide gap in wages and in fringe benefits between union members at large firms and their counterparts at small firms and on irregular employment - which reflects different payment capabilities of those firms and has been fostered by enterprise bargaining - is a crucial barrier to industrial unions pursuing centralized bargaining.
Given those constraints, the new framework of industrial bargaining has yet to be stabilized in most sectors, and has shown diverse progress among industrial unions. The KMWU, having the largest membership (around 150,000) and most powerful leverage among industrial unions, began developing its industrial bargaining system in 2001.
Over the past years, through its militant action it has built a three-tier bargaining structure in the face of employers` resistance, and has succeeded in pushing employers into establishing their association as the centralized bargaining partner in 2006.
However, the KMWU, which gained new membership of large enterprise unions, such as Hyundai and Kia in mid-2006, was confronted with new challenges in its 2007 collective bargaining, which concluded last month.
Most large enterprises, including the Hyundai Automotive Group, refused to participate in the central bargaining with the KMWU and kept to the existing enterprise bargaining. In particular, the anti-FTA strike led by the KMWU caused those employers to further strengthen their abhorrence toward industrial bargaining.
Since the KMWU pressured the large enterprises to attend to its industry-level negotiation by strike action, the collective bargaining of the metal sector became the eye of a typhoon in the industrial relations of 2007. The leadership of the KMWU, however, who have a relatively moderate position on their bargaining strategy, has been weakened, in that their activity is constrained by the illegal political strike and internal union politics, derived from strong pressure from militant activists.
By contrast, the KHMWU showed a greater advance in developing its sectoral bargaining than other industrial unions, although it began its industrial bargaining in 2004. The KHMWU, which has negotiated with the sector`s employer association from the beginning, made a notable success in 2007 in reducing the discrepancy of employment conditions between regular and irregular employees, by constraining wage increases of regular workers and obtaining employer`s consent to convert irregular employees to regular status.
Moreover, most employers (and local unions) have become comfortable with centralized wage bargaining, because they can get free from competition of wage increases between them. The KFIU, an affiliate of the FKTU, has adopted a peaceful approach toward industrial bargaining, without resorting to strike action. Its industrial unionism has developed a looser bargaining structure, compared to the KCTU affiliated industrial unions, in that it has left local unions with substantial decision-making power over key bargaining issues.
The hottest issue of the 2007 bargaining by the KFIU is about the reduction of working hours.
The recent changes in industrial relations in Korea have two implications with regards to countries of the West like the United States and the EU states.
Industrial unionism is the universal form of union structure in Western countries and so the move away from enterprise unionism brings Korean unions to a point of convergence with the Western model.
At the same time, the centralization of bargaining structure in Korea is quite the opposite to the decentralizing trends in Western countries. In fact, most Western countries have witnessed the decentralization of the existing bargaining structure (for instance, from nationwide bargaining to industrial bargaining in Sweden, or deviation from strict industry-wide bargaining in Germany) in the context of growing global market competition.
It is noteworthy that Korean unions have made conscious efforts to transform their existing enterprise unionism toward the centralized industrial unionism in the face of globalization, which has driven the decentralization of the industrial relations system in the Western countries.
It is hardly conclusive how industrial unionism has affected the national economy in Western countries, according to the existing research literature. As exemplified in the experience of the Western countries, industrial unionism has contributed to stable industrial relations and reduction of bargaining costs, whereas it has constrained employers from flexibly responding to the changing market conditions and, as a result, incurred rigid employment practices and high unemployment in the labor market.
Therefore, whether industrial unionism benefits or harms our economy and society depends upon the strategic choice and mutual attitude of industrial actors.
If labor unions and employers are cooperative in reducing the transition cost toward industrial unionism and creating an effective industry-wide bargaining model, this new unionism would help stabilize the country`s industrial relations and alleviate the crucial problem of labor market segmentation.
The "wasteful" tension and conflict between two parties with regard to the implementation of industrial unionism would further worsen industrial relations, constraining the country`s economic competitiveness and social cohesiveness.
In this light, the government has not played an active role in promoting the "soft-landing" of industrial unionism over the recent years. Although the current administration announced a policy plan to help a smooth transition toward industrial unionism at its early stage, it has done little, in face of employers` strong opposition and due to its unfavorable stance on industrial unions` militant action.
The future of industrial unionism is very uncertain, given the present relationship between the three parties. If industrial unions stick to their old way of militancy, industrial unionism will not be accepted by employers and the government, and it will not only become a detonator of industrial conflicts, but also will further the vicious circle of confrontational industrial relations in the country.
If the KCTU-led industrial unions and employers give mutual recognition to each other as bargaining partners, assisted by the government`s facilitating role, industrial unionism would contribute in promoting productivity coalition in the workplace and peaceful industrial relations at a national level, thus coping with the structural issue of labor polarization. Hence, the future of the country`s industrial relations as well as industrial unionism is in the hands of the unions and employers themselves.
* Source: Korea Herald: 7 August, 2007 By Lee Byoung-hoon