Massive Branch Shutdown
A conflict between the labor and the management at Citibank Korea is spreading like wildfire, giving rise to a legal battle.
As Citibank Korea decided to cut back on its branches 80% beginning in July of this year, conflicts between the labor and the management has now reached a point where both sides sue each other.
According to the financial industry, the Citibank Korea Labor Union applied for an injunction at the court to request a ban on the closedown of branches against Citi Bank’s application for a restraining order to prohibit the obstruction of business against the labor union at the court in late May.
In particular, the union handed in a complaint to an office of the Ministry of Employment and Labor on June 8, saying that a union official was assaulted by employees of the bank’s personnel management department on May 18.
The bank decided to restructure 126 retail banking branches into 25 in March, saying that it will activate non-face-to-face channels such as mobile and internet banking, which fueled the dispute and spread to a legal battle between the labor and the management.
The management said that there will be no artificial restructuring, when putting out an announcement that they will shut down more than 100 branches. However, the union believes that large-scale branch closures can lead to mass layoffs of about 600 non-regular workers (contract workers). The union added that the shutdown may cause regular full-time employees a sense of job insecurity. Moreover, as a big drop in the number of branches will intensify financial consumers' inconvenience.
In particular, the union side pointed out that if branches in provincial areas are shut down as planned, most of the branches would lose their local bases in provincial areas, eventually leading the bank to a point of abandoning retail financing.
The labor union is claiming that an exodus of customers has already become a reality due to the unilateral decision to integrate branches.
The labor union went on a go-slow beginning on May 16 to oppose the closure. They are neither attending meetings nor selling some products, and a general strike is scheduled for June.
The management also applied for an injunction to prohibit the labor union’s obstruction of business at the court. This is because the labor union was insulting and defaming the management via banners or electric bulletin boards.
The management is sticking to the implementation of branch closedowns as planned and planning to hold an event in honor of the launch of an Internet banking service on June 15 under the management of Park Jin-hee, president of Citibank Korea. Therefore, the labor-management discord will peak on the day.
President Park will introduce a new non-face-to-face service at the event on June 15, and will discuss various controversies that have been aroused since the management’s decision to prune the number of branches.
The conflict sparked off by the announcement to slash branches has made it more likely for the management’s branch restructuring plan to hit a snag. If the court accepts the injunction application from the labor union, it will be inevitable for the management to make a change in its branch closedown plan.
Meanwhile, Citibank Korea announced on May 16 that the bank will collectively convert about 300 temporary non-regular workers such as general office workers and tellers into full-time regular workers. At that time, Park Jin-hee, CEO of Citibank Korea, said through the CEO’s message that the bank will convert 300 full-time irregular employees, including contract general office workers and contract tellers, into full-time regular employees within this year."
This is credited to the banking industry’s active participation in President Moon Jae-in’s declaration to begin an era of zero-irregular workers. The union, however, is skeptical about the management's decision.
“The massive branch shutdown plan will lead to the firing of 600 dispatched employees, including 280 telemarketers, 250 workers at Citiphone (call center) and 60 employees at service desks of Citibank Korea’s affiliated department store (Shinsegae). The mass layoffs of such workers were virtually determined," the Citibank Korea Labor Union claimed on June 2.