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Most Korean Companies Looking Forward to Amicable Settlement of Wage Negotiations
Eternal Tug-of-War
Most Korean Companies Looking Forward to Amicable Settlement of Wage Negotiations
  • By Jung Suk-yee
  • July 9, 2015, 06:45
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The Korea Chamber of Commerce & Industry (KCCI) announced on July 8 that 84 percent of respondents to its recent survey said that they would be able to come to a voluntary agreement at this year’s wage negotiations. The survey covered 300 human resources and labor relation managers working for firms with labor unions.

“Although both the Korean Confederation of Trade Unions and the Federation of Korean Trade Unions called for a strike against the government’s labor market reform plan, the strike’s impact is likely to be limited in individual companies, because their wage negotiations matter more than the strike for them, and any strike can be regarded as having political intentions,” the KCCI explained. Some of the larger unions including that at Hyundai Motor Company refused to participate in the Korean Confederation of Trade Unions’ strike in April, mentioning that it had nothing to do with the working conditions of union members.

Out of the companies that answered the survey, 81.7 percent picked wage increases and welfare expansion as the hottest issues for this year’s talks. Another 32.7 percent mentioned issues such as ordinary wages, working hours, and retirement age. On average, employers suggested a 3.0 percent increase in total pay, while employees asked for a 5.8 percent increase. They answered they were likely to meet at 3.9 percent or so in an amicable settlement, regardless of the ongoing confrontation between employers’ and employees’ organizations. The Korea Employers Federation and the Federation of Korean Trade Unions recently suggested a 1.6 percent increase and a 7.8 percent increase, respectively.

In the meantime, 56.3 percent of the respondents mentioned wage system reform, including the introduction of wage peaks, as the most important variable for the second quarter of this year. It was followed by labor market restructuring (33.3 percent).