Employment relations in South Korea

Full text

263
11
Employment Relations in
South Korea
Byoung-Hoon Lee1
South Korea (hereafter Korea) is an exemplary case of successful late industrialisation.
Its late development can be attributed to Japanese colonial occupation (1910–45),
division of the nation (1945–48) and the Korean War (1950–53). Despite its late indus-
trialisation, the country has achieved ‘compressed development’ since the early 1960s,
due to remarkable export growth at an annual rate of 30 per cent, as well as average
economic gross domestic product (GDP) growth at an annual rate of more than 8per
cent for 30 years. Until 1987, the ‘compressed economic development’ was led by
the authoritarian state, pursuing a policy of export-oriented industrialisation. Korea
has a population of more than 50 million, and is ranked 11th (US$1,655.6 billion) in
the world in terms of GDP in 2018. Korea’s per capita gross domestic product (GDP)
has risen from US$87 in 1962 to US$31,937 in 2019, and it has been a member of the
Organisation for Economic Co-operation and Development (OECD) since 1996.
Korea had a tumultuous trajectory towards democratisation, especially before 1987.
After national liberation in 1945, the country was governed by a US military government
until 1948. Syngman Rhee was elected as first president in the country’s republican
system. But he was ousted by student demonstrations in 1960. President Chung-hee
Park, who took power through a military coup in 1962, built an authoritarian regime to
lead the export-oriented industrialisation over his 18-year presidency (1962–79), which
ended with his assassination. President Doo-hwan Chun, who gained power by military
coup in 1980, continued the authoritarian leadership. In June 1987, the growing power
of the civil society pressured the ex-military ruling group to proclaim the Declaration
of Democratisation, which provided critical momentum for political democratisation.
After the two terms of Presidents Tae-woo Roh and Young-sam Kim, Dae-jung Kim
won the presidential election against the backdrop of the economic crisis at the end
of 1997; this was the first peaceful power shift to an opposition party in the history of
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Korea. After a decade (1998–2007) of liberal governments led by Presidents Dae-jung
Kim and Moo-hyun Roh, Presidents Myung-bak Lee and Geun-hye Park (the daughter
of Chung-hee Park) won the elections of 2007 and 2012 respectively. Their conserva-
tive governments pursued ‘business-friendly’ economic deregulation and labour mar-
ket reforms. In 2017, when President Park was impeached owing to her corruption
scandal, President Jae-in Moon was elected with his pro-labour policy pledges.
The regime of Korean political economy has thus shown remarkable evolution
since the 1960s. During the pre-democratisation period (until 1987), it was character-
ised as a developmental market model, in which the authoritarian state played a key
role in driving the compressed economic development. The political democratisation
of 1987 and the economic crisis of 1997 combined to fundamentally transform the
country’s political economy regime and labour market system toward a hybrid of lib-
eral market economy (LME) and coordinated market economy (CME) elements.
This chapter delineates the historical evolution of employment relations in Korea,
mainly focusing on the post-1960s period of industrialisation, and discusses the prin-
cipal characteristics of key parties and the processes and issues in the employment
relations system.
Historical development of employment relations
Until the early 1960s, Korea was an agricultural economy: 63 per cent of the national
labour force worked in the primary sector in 1963. As the government led by Presi-
dent Park launched successive economic development plans after 1962, the country’s
economy was transformed by export-oriented industrialisation over the next three
decades. The ‘Korean model’ of industrialisation was shaped by the government-led
economic development (Lee 2003). During this period, it was the government that set
the goals and policy of economic development, determining the allocation of financial
capital and the application of industrial technologies. It promoted the growth of busi-
ness conglomerates, called chaebol, as partners in its export-driven policy, resulting in
their dominance in Korea’s current economic structure.
From 1962 to 1987, employment relations in Korea were controlled by the govern-
ment’s interventionist labour policy, geared to guarantee the supply of cheap and strike-
free labour deemed necessary for economic growth. The so-called developmental state
made it unfeasible for workers to take collective industrial action and to organise inde-
pendent unions. Under this setting, employers were able to exercise their managerial
prerogatives unilaterally in setting pay and working rules, since unions were too weak
to voice their members’ discontent until 1987. The Federation of Korean Trade Unions
(FKTU)2 and its affiliates were under strict state control, and colluded with management
instead of actively representing rank-and-file interests. As a result, employment relations
were largely quiescent under state-led industrialisation, which led unemployment to fall
from more than 8 per cent in 1963 to less than 4 per cent in 1986 (Kim & Sung 2005).
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Union membership gradually increased as Korea industrialised in the 1960s and
1970s. However, it plunged in the early 1980s, as illustrated in Table 11.1, and con-
tinued to decline into the mid-1980s as President Chun pursued a hardline policy
towards unions. Nonetheless, independent union activism associated with the student
movement challenged the government and the impotent FKTU leadership from the
late 1970s.
Table 11.1 Indexes of employment relations in South Korea
Year
Unions Labour disputes
Union
members
(000s)
Union
density
(%)
Number
of labour
unions
Number
of
strikes
Strike
participants
(000s) Unemployment (%)
1970 473 12.6 3 500 4 1 4.4
1975 750 15.8 4 091 52 10 4.1
1980 948 14.7 2 635 206 49 5.2
1985 1 004 12.4 2 551 265 29 4.0
1986 1 036 12.3 2 675 2 76 47 3.8
1987 1 267 13.8 4 103 3 749 1 262 3.1
1988 1 707 17.8 6 164 1 873 293 2.5
1989 1 932 18.6 7 883 1 616 409 2.6
1990 1 887 17.2 7 698 322 134 2.4
1991 1 803 15.4 7 656 234 17 5 2.4
1992 1 735 14.6 7 527 235 105 2.5
1993 1 667 14.0 7 147 144 10 9 2.9
1994 1 659 13.3 7 025 121 104 2.5
1995 1 615 12.5 6 606 88 50 2.1
1996 1 599 12.1 6 424 85 79 2.0
1997 1 484 11. 1 5 733 78 44 2.6
1998 1 402 11. 4 5 560 12 9 14 6 7. 0
1999 1 481 11. 7 5 637 198 92 6.3
2000 1 527 11 . 4 5 698 250 178 4.4
2001 1 569 11. 5 6 148 235 89 4.0
(Continued)
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In late 1987, following political democratisation, the Great Labor Struggle disman-
tled the state-controlled employment relations system. Under the context of politi-
cal democratisation, the government abandoned its interventionist labour policy and
officially recognised workers’ labour rights to organise their own unions. As a conse-
quence, the number of unions nearly tripled (from 2,742 to 7,883) between 1986 and
1989. During the same period, union membership doubled from 1 million to almost
2million, while union density grew sharply from less than 12.3 per cent to 18.6 per
cent. The explosive growth of the labour movement caused a change in the power
balance between workers and management. Employers had to accept pay increases,
Year
Unions Labour disputes
Union
members
(000s)
Union
density
(%)
Number
of labour
unions
Number
of
strikes
Strike
participants
(000s) Unemployment (%)
2002 1 538 10.8 6 506 322 94 3.6
2003 1 550 10.8 6 257 320 13 7 3.7
2004 1 537 10.3 6 107 462 18 5 3.7
2005 1 506 9.9 5 971 287 118 3.5
2006 1 559 10.0 5 889 13 8 131 3.2
2007 1 688 10.6 5 099 115 93 3.2
2008 1,666 10.3 4,886 108 114 3.6
2009 1,640 10.0 4,689 121 81 3.7
2010 1,643 9.7 4,420 86 40 3.4
2011 1,720 9.9 5,120 65 33 3.2
2012 1,781 10.1 5,177 105 134 3.1
2013 1,848 10.3 5,305 72 113 3.5
2014 1,905 10.3 5,445 111 133 3.6
2015 1,939 10.2 5,794 105 77 3.7
2016 1,996 10.3 6,164 120 226 3.7
Notes: Union density = union members ÷ total number in the labour force x 100; Unemployment rate = the unemployed
(in one-week job search) ÷ total number in the economically active population x 100; the unemployment rate was estimated
by the relative ratio of job seekers for one week until 1999, but has been calculated by that of four weeks since 2000.
Source: Korea Labor Institute (2018)
Table 11.1 Indexes of employment relations in South Korea
(Continued)
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improve working conditions and establish corporate welfare programs, while unions in
many large enterprises took control of the shop floor. Between 1987 and 1989, average
nominal annual pay increases exceeded 12 per cent in all sectors. In manufacturing,
average nominal pay increased by 18 per cent annually during this period.
Union membership began to fall in the early 1990s for several reasons, such as an
economic slump, the government’s return to interventionist-style labour policies, sig-
nificant improvements in working conditions including pay, and waning public sym-
pathy towards militant unionism after the collapse of the Soviet bloc in the early 1990s
(Lee & Lee 2003). The downward trend in union membership continued until1998.
By the early 1990s, globalisation had increased the government’s concern with the
competitiveness of its national economy. To lessen labour–management confronta-
tion, the government adopted a social dialogue model, involving tripartite consultation
among unions, employers and government. With the assistance of the government, the
FKTU and the Korea Employers Federation (KEF) reached nationwide agreements on
pay increases and employment policy in 1993 and 1994. The FKTU–KEF agreements
were used as a guideline for pay negotiations at the enterprise level. In 1995, however,
these nationwide consultations were halted, as the FKTU was discredited for support-
ing the government’s wage restraint policies.
The government led another tripartite initiative, the Presidential Commission on
Industrial Relations Reform (PCIRR), in May 1996. The commission, consisting of rep-
resentatives from unions, employers, public interest and academic groups, was formed
as a presidential advisory body. The PCIRR provided an open forum for social dia-
logue among those various stakeholders with regard to labour law reform. The PCIRR
included representatives of the Korean Confederation of Trade Unions (KCTU) which
was founded as the national centre of democratic unions in November 1995, but was
not legally recognised.
Following a series of public hearings, sub-committee workshops and plenary ses-
sions, the PCIRR submitted recommendations for labour reforms to President Young-
Sam Kim. On 26 December 1996, however, the government and the ruling party passed
their own bill revising the existing labour laws, while opposition law-makers were
absent from parliament. The government’s unilateral revision of labour laws, which
placed more emphasis on labour market flexibility than on labour rights, triggered
nationwide strikes and anti-government protests in late 1996 and early 1997. Con-
fronted with the strong resistance of the unions and civil societies, the government
abandoned its unilateral revision of the labour laws and re-amended them after con-
sultation with the opposition parties in March 1997.
The foreign exchange crisis of November 1997, which precipitated an unprece-
dented economic recession, fundamentally affected employment relations. It triggered
extensive restructuring and massive downsizing by the government and businesses.
The focus of employment relations shifted from economic issues, such as pay and
fringe benefits, to employment-related ones. This change was accompanied by a sharp
increase in industrial conflict. Unions made unprecedented concessions in 1998 and
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International and comparative employment relations
1999 by accepting pay freezes and reduced welfare programs. For example, the pay
decrease in 1998 was 2.7 per cent. Widespread downsizing caused union membership
to decline sharply, by 197,000 between 1997 and 1998. However, union membership
and density rose slightly in 1999 when a new law allowed teachers to form unions.
Since then, union membership rebounded to nearly 2 million in 2016, while union
density remained at around 10 per cent (see Table 11.1).
The government resumed social dialogue policy to deal with the economic crisis.
President-elect Dae-jung Kim established the Tripartite Commission in January 1998 to
promote cooperation between the employment relations actors in overcoming the eco-
nomic crisis. In February 1998, the commission reached a historic social pact covering
an extensive agenda, including the extension of employment insurance coverage, legal
procedures for redundancies and dispatched labour, and guaranteed labour rights for
teachers and public servants (Lee 2003). The social pact helped end the economic crisis
by enhancing the country’s credibility among foreign financial institutions. Immediately
after signing the social pact, however, the KCTU leadership faced strong criticism from
members for agreeing to the dismissal of redundant workers. As a result, the KCTU with-
drew its participation from the commission, bringing the policy consultations to a halt.
The second round of Tripartite Commission consultations began in June 1998. The
main objectives in this round were to monitor the implementation of agreements made
in the first round, and to promote policy consultation on the restructuring of the bank-
ing, finance and public sectors. The second round reached some agreement on policy
proposals, including the legalisation of teachers’ unions and integration of the two-
tier health insurance system. This round ended in early 1999 when the KCTU again
withdrew from the commission. Although a third round of consultations began in
September 1999, the commission’s role in promoting tripartite dialogue was seriously
weakened by the confrontations between the KCTU and the government.
Since 2000, crucial labour issues have come to fore, such as labour market seg-
mentation, the proliferation of non-regular employees, and jobless economic growth.
Such issues were precipitated by neo-liberal reforms following the economic crisis (Lee
2005). The quality of working life has polarised since 1997. There has been a rapid
increase in the size of the non-regular workforce, discrimination against non-regular
workers and a decrease in decent jobs. Issues of employment status, enterprise size,
and gender have combined to produce the growing segmentation of labour markets,
and resulted in polarised job quality. In the aftermath of the economic crisis, there
have been increasing disparities between regular employees of large enterprises and
the remainder of the workforce, in pay, welfare benefits, job training, employment
conditions, and legal and union protection. Meanwhile, the employment relations sys-
tem has undergone structural change – for example, the spread of industrial unionism
and the revision of labour laws to meet global standards. In particular, institutional
reforms, including allowing multiple unionisation at the establishment level, have had
a profound impact on the reshaping of employment relations, mainly weakening the
leverage of unions.
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In summary, since the 1960s, employment relations in Korea have been transformed
by industrialisation, democratisation, globalisation and neoliberal reforms. Employ-
ment relations, controlled by the state until 1987, changed to embrace more social dia-
logue and regulation in a democratised context, albeit in the face of a steady decline
in union density. Post-1997 employment relations have included problematic aspects of
recurrent confrontation and labour market polarisation, along with sustained attempts
at social dialogue.
The employment relations parties
Unions
The late 1980s was a period of remarkable change in the composition of unions, as
well as explosive growth in the labour movement. First, the most unionised sector,
which had been textiles, where the workforce was predominantly female, became the
metal and chemical industries, mostly employing men.3 This reflected the change in
Korea’s economic structure in the 1980s. Since 1987, male-dominated unions, organised
in heavy industries, have led the union movement. The membership of non- manual
unions in such industries as banking, mass media and health care also rose sharply in
this period. Second, many of the newly organised unions were critical of the FKTU’s
submission to the government’s labour control policies before 1987, and consequently
rejected affiliation with the FKTU. Those independent unions espoused ‘democratic
unionism’ and formed their own federations, which merged with the KCTU in 1995.
The union movement is divided into three groups, as illustrated in Table 11.2. The
FKTU is the largest national centre with 27 affiliates as of 2016. It has taken a mod-
erate stance towards the government and employers. By contrast, the KCTU, which
gained legal recognition in 1999 and has 12 affiliates, tends towards militant activism.
The FKTU’s membership fell to 755,000 by the mid-2000s, but rebounded to 841,000
in 2016. The KCTU continued growing, from 420,000 in 1995 (at its establishment) to
Table 11.2 Composition of labour unions by national centre affiliation
No. of unit unions No. of union members (in 000s)
FKTU 2,395 (38.9) 841.7 (42.8)
KCTU 368 (6.0) 649.3 (33.0)
Independent unions & others 3,401 (55.1) 475.8 (24.2)
Total 6,164 (100.0) 1,559.2 (100.0)
Note: The figures in parentheses represent the percentage of unit unions and union members.
Source: MoEL (2017)
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649,000 in 2016. The membership of independent unions and federations that with-
drew their affiliation from the FKTU and the KCTU almost doubled from 176,700
in 2006 to 475,800 in 2016, as shown in Table 11.2. The increased membership of
independent unions is mainly explained by the prohibition of employers from paying
wages to union officials since 2010, which is having a damaging impact on unions’
finances. The increase in independent unions might also be explained by their choice
to distance themselves from the two national peak unions’ confrontation with the con-
servative government over labour policy.
The majority of unions in Korea are enterprise based. Enterprise unions have con-
siderable autonomy in union administration and collective bargaining at the workplace
level. In the early 1960s, President Park forced unions to restructure along industrial
lines, but President Chun legislated for enterprise unions in the early 1980s. Since the
late 1990s, unions have reverted to industrial unionism and centralised bargaining to
strengthen their socio-political power. In 1998, the Korea Health and Medical Workers
Union (KHMWU) was the first to convert to industrial unionism. Subsequently, oth-
ers followed suit, including the Korea Finance Industry Union (KFIU) and the Korea
Metal Workers Union (KMWU). As a consequence, membership in industrial unions
grew from 10 per cent of total union membership in 1996 to about 55 per cent in
2016 (MoEL 2017). In particular, the KCTU resolved to complete its organisational
transformation towards industrial unionism by the end of 2007 so that 84 per cent of
its members were affiliated with industrial unions in 2012. As shown in Table 11.2, the
KCTU, largely comprising industrial unions, has only 6 per cent in the number of unit
unions, while it has 33 per cent of total union membership. In contrast, the FKTU has
been less active in organisational restructuring, and only 20 per cent of its members are
organised in industrial unions. Non-regular workers made another attempt to organise
community-based unions to cope with the growing flexibility and mobility of labour
markets. Even though union density remains very low at only 10 per cent, 55 per cent
of the total workforce employed at large establishments with more than 300 employ-
ees are unionised (MoEL 2017). The unionisation of regular workers is 17.1 per cent,
whereas that of non-regular workers is only 2.9 per cent (KLI 2018).
Employers
Until 1987, employers, who relied on the government’s interventionist labour policies
to restrain workers’ collective activities, imposed authoritarian supervision of workers
by practising militaristic control by force (Park 1992). However, the explosive growth
of unions in 1987 transformed corporate-level employment relations from domination
by management towards a more balanced power relationship. Unions exercised a
degree of shop-floor control in many enterprises, while pressing employers to concede
high pay increases and improvements to working conditions and welfare programs.
Moreover, unions forced management to abolish job evaluation schemes, which had
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been used to determine employees’ pay in a discriminatory manner, and were there-
fore a cause of discontent.
From the early 1990s onwards, employers took a hard line on labour relations.
Against the economic downturn, employers launched their ‘new management strate-
gies’. These strategies had three pillars: new personnel policies, flexible working sys-
tems, and union suppression. The new personnel policies included the introduction of
flexible pay systems (e.g. pay for performance and job capabilities) and the restoration
of job evaluation. At the workplace level, employers extended the use of automation
technologies to promote flexible labour processes and increased labour productivity.
The growing implementation of advanced production technologies was also intended
to reduce management reliance on a recalcitrant workforce. Considerable manage-
ment efforts were expended on restricting the militant activities of unions by imposing
strict penalties on union officials and activists for engaging in illegal industrial action.
As a core part of their union-suppression strategy, the ‘no work, no pay’ policy was
implemented to constrain unions from taking strike action. Therefore, new manage-
ment strategies were intended primarily to weaken unions’ shop-floor power and make
labour processes more flexible.
Extensive restructuring took place against the backdrop of the 1997 economic cri-
sis, particularly in the finance and public sectors, and among large private enterprises.
Management at those large enterprises took action to downsize regular employees
by permanent layoffs and/or early retirement in the context of economic crisis, while
extending the use of the non-regular labour force and outsourcing business operations
in the later period of business recovery. As a consequence, internal labour markets
developed by those large enterprises in the period of economic prosperity, and which
had followed the Japanese model, were dismantled during the economic crisis. In the
post-1997 period, it has been common for large enterprises to resort to external labour
markets by increasing the use of a non-regular workforce and undertaking organisa-
tional re-engineering, imitating the American business model.
It is noteworthy that wide variations of employment relations exist among the so-
called chaebols, Korean business conglomerates, which have exerted a dominant influ-
ence over the national economy and employment relations. For instance, Samsung,
the largest chaebol, has strictly pursued a human resource management (HRM) model
that avoids unionisation; Hyundai Motor Group, the second largest conglomerate, has
taken a confrontational stance towards unions; SK (the third largest conglomerate)
and LG (the fourth largest) have had cooperative relationships with their unions. By
contrast, small and medium-sized enterprises (SMEs) have poor employment relations
practices, sometimes below statutory labour standards. This reflects their inferior finan-
cial capabilities and outdated management styles.
There are three significant employers’ organisations that have substantial influence
over national-level employment relations: the KEF, the Korean Chamber of Commerce
and Industry (KCCI), and the Federation of Korean Industries. The KEF was established
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in 1970 and represents about 4,317 enterprises in the manufacturing and service sec-
tors, as of April 2019. It has been the official voice of employers at national-level nego-
tiations and consultations regarding employment relations issues. The KEF was invited
to be the employer representative member of the Tripartite Commission. Rapid growth
in the labour movement in the late 1980s and the government-initiated tripartite dia-
logue since the 1990s have made the KEF an agent of growing significance. The KCCI
is the oldest employers’ association, founded in 1884. It represents about 180,000 enter-
prises in all business sectors, based upon the Chambers of Commerce and Industry
Act. In recent years, the KCCI has been treated as an employer representative for social
dialogue to deal with labour law reforms and socio-economic policy. The Federation
of Korean Industries, which was formed in 1961 and comprises 380 large enterprises
(mainly chaebol affiliates), has also exercised substantial influence on the government’s
labour policy and legislation on behalf of business conglomerates’ interests.
Government
Before 1987, the government played a key role in promoting economic growth and sup-
pressing workers’ collective action. During the period of pre-democratisation, it focused
on the effective mobilisation of a cheap and educated labour force into the state-led
economic development and paternalistic control of employment relations. After 1987,
however, the government shifted its labour policy from authoritarian control to social
dialogue. In the early 1990s, Roh Tae-woo’s government, concerned that national eco-
nomic competitiveness might be damaged by recurrent labour– management confron-
tation, adopted a tripartite model for promoting cooperative relations between unions
and employers.4 Tripartism, led by the government, started with the National Economic
and Social Council, formed in 1990. It went through the stages of the national-level
FKTU–KEF pay negotiations in 1993 and 1994, and the PCIRR’s policy consultation for
labour law reforms in 1996, to the Tripartite Commission in early 1998. The Tripartite
Commission gained the legal status of a presidential advisory body for Korean social
dialogue in 1999, when the Act of Tripartite Commission was legislated. The Tripartite
Commission expanded its policy consultation agenda in 2007 and was reshaped into
the Economic, Social and Labor Commission in 2018, which was enhanced to expand
the representation of unorganised workers. From 1998 to 2017, the Tripartite Commis-
sion produced 80 social agreements and 47 policy recommendations. Despite three
decades of tripartism and some notable achievements, particularly in overcoming the
1997 economic crisis, social dialogue has gained little credit with unions, which claim
that it has been a cover for government-initiated policy-making. In addition, union
members have stigmatised the commission as being responsible for the adoption of
neo-liberal policy to deregulate labour markets, and for achieving little to resolve the
social problems resulting from labour market polarisation.
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An independent office was established to administer labour policies in 1963, and
became upgraded to the Ministry of Labor in 1981, which was renamed the Ministry
of Employment and Labor in 2010. The ministry covers all work-related areas, includ-
ing labour standards, employment relations, employment insurance, equality, voca-
tional training and occupational safety. It consists of three divisions (Planning and
Coordination, Employment Policy, and Labor Policy) and three departments (Inclu-
sive Employment Policy, Vocational Skills Policy, and Industrial Accident Prevention
and Compensation). The ministry has six regional administration offices located in
major cities – Seoul, Pusan, Incheon, Daegu, Incheon and Kwangju – and 40 regional
offices. In the regional offices, around 2,100 labour inspectors are charged with polic-
ing and supervising working conditions and industrial safety, and taking action to
prevent and respond to employment relations disputes and industrial accidents in the
workplace. Two commissions, affiliated with the Ministry of Employment and Labor,
play a crucial role in shaping nationwide employment relations. The Labor Commis-
sion, which consists of three parties – unions, employers and public-interest groups–
adjudicates such illegal cases as unfair labour practices, unfair dismissal and work
discrimination, and mediates industrial disputes. The Minimum Wage Commission,
comprising 27 members evenly representing unions, employers and the public inter-
est, manages negotiations among the three parties and the determination of annual
minimum pay.
Unions have been critical of the submissive role and position taken by the Min-
istry of Employment and Labor and its predecessors, giving priority to economic
growth throughout Korea’s post-war development. The People’s Government (1997–
2002), led by President Dae-jung Kim, promoted labour–management partnership
and workplace innovation, as it regarded confrontational labour–management rela-
tions as a major constraint on national competitiveness. In contrast, the conservative
government (2008–17), led by Presidents Lee and Park, took an anti-union policy
stance to deprive unions of the existing labour contracts and aggravate union busting
and organisational division, while officially pursuing business-friendly economic and
labour policy.
It should be noted that the government is the largest employer in Korea, employing
1.62 million people, including civil servants (around one million), public school teach-
ers (330,000) and employees of public enterprises and institutes (250,000). Teachers
and civil servants were given legal labour rights to organise and bargain (excluding
strike action) in 1999 and 2004 respectively. Despite the statutory constraints on union
activities, the public sector is highly organised, with a union density of 68 per cent for
organisable civil servants and 44 per cent in public enterprises, whereas only 2 per
cent of teachers were unionised in 2016 (MoEL 2017). Therefore, the government has
substantial influence over the employment relations of the private sector through its
collective bargaining with large unions in the public sector.
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Processes of employment relations
Collective bargaining and dispute resolution
Collective bargaining, which is regulated by the Trade Union and Labour Relations
Adjustment Act (TULRAA), is largely conducted at the enterprise level, in accordance
with the enterprise-based union structure. The transport (e.g. taxi and bus) and con-
struction sectors are exceptions, in that those sectors have maintained regional or
sectoral bargaining practices. As the TULRAA, amended in 1997, stipulates that no col-
lective agreement shall have a valid term exceeding two years, collective bargaining
takes place every year in most unionised enterprises. In practice, collective bargaining
on pay is conducted every year, while bargaining to determine working conditions and
other contractual terms is conducted every two years.
Even though the collective bargaining structure is primarily decentralised, two
national union federations and the employer associations have had substantial influ-
ence on enterprise-level bargaining through their nation-level proposals. As demon-
strated in Table 11.3, the FKTU and the KCTU have proposed bargaining guidelines for
pay increases and contractual changes (e.g. a reduction in working hours, employment
security, regular employment of non-regular workers, in recent years) every year; these
serve as an influential reference to enterprise-level collective bargaining. In response to
the national union federation bargaining proposal, the KEF offers its own bargaining
guidelines to member enterprises. Moreover, the national union centres and the KEF
are involved in bargaining processes to set the minimum wage through the Minimum
Wage Commission every year.5
Table 11.3 Trends in labour–management wage proposals and contractual wage increases
Year Average increases of wage
contracts
Wage bargaining proposals
KEF FKTU KCTU
1988 13.5 7.5–8.5 29.3 –
1989 17.5 10.9 (8.9–12.9) 26.8 37.3
1990 9.0 7.0 17.3–20.5 23.3
1991 10.5 7.0 17.5 22.2
1992 6.5 5.7(4.7–6.7) 15.0 25.4
1993 5.2 4.7–8.9 National level agreement
by KEF and FKTU
18.0
1994 7.2 5.0–8.7 16.4
1995 7.7 4.4–6.4 12.4 14.8
1996 7.8 4.8 12.2 14.8
1997 4.2 Wage freeze 11. 2 10.6±3
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Industrial unions, reorganised by the organisational integration of enterprise unions
over the past 20 years, have demanded centralised bargaining, which is distinct from
the decentralising trends of bargaining structure in Western countries. In particular,
three major industrial unions, the Korea Metal Workers Union (KMWU), the Korea
Health and Medical Workers Union (KHMWU) and the Korea Finance Industry Union
Year Average increases of wage
contracts
Wage bargaining proposals
KEF FKTU KCTU
1998 0.0 Labour cost
reduction by 20%
4.7 5.1–9.2
1999 2.1 Wage freeze 5.5 7.7±1.5
2000 7.2 5.4 13.2 15.2
2001 6.0 3.5 12.0 12.7
2002 6.7 4.1 12.3 12.5
2003 6.4 4.3 11.4 11. 1
2004 5.2 3.8 10.7 10.5
2005 4.7 3.9 9.4 9.3
2006 4.8 2.6 9.6 8.0–12.6
2007 4.8 2.4 9.3 9.0
2008 4.9 2.6 9.1 8.0
2009 1.7 – – 4.9
2010 4.8 Wage freeze 9.5 9.2
2011 5.1 3.5 9.4 –
2012 4.7 2.9 9.1 9.3
2013 3.5 – 8.1 –
2014 4.1 2.3 8.1 –
2015 3.7 1.6 7. 8 –
2016 3.3 Wage freeze 7. 9 –
2017 3.6 Wage freeze 7. 6 –
Source: Korea Labor Institute (2018)
Table 11.3 Trends in labour–management wage proposals and contractual wage increases
(Continued)
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International and comparative employment relations
(KFIU), have made progress in establishing national agreements with their employ-
ers’ associations. The KMWU has a three-level bargaining structure, comprising the
national, regional and enterprise levels, while the KHMWU and the KFIU have two
tiers: national and enterprise levels. Centralised industrial bargaining, however, has
declined, due to opposition from employers – particularly business conglomerates –
and from conservative governments.
The dispute procedure is stipulated in the TULRAA. According to this law, the par-
ties are obliged to enter into mediation with the Labor Commission. Prior to the revi-
sion of the TULRAA in 2007, the government was able to award compulsory arbitration
for resolving disputes at public enterprises that provide essential services (water, elec-
tricity, gas, oil, telecommunications, railroads, hospitals, inner-city bus services, and
banking services). The revised TULRAA abolishes compulsory arbitration, and instead
prohibits unions from engaging in strike action in the essential services of public
enterprises.
In 2010, when multiple unionism was allowed at the establishment level, an addi-
tional legal procedure was required to regulate bargaining among multiple unions.
Multiple unions can agree to form a joint bargaining team to negotiate with their
employer. If multiple unions fail to form a joint bargaining team, the union that repre-
sents a majority of workers in the establishment can have the exclusive right to bargain
with the employer, and minority unions have to accept the majority union’s bargaining
outcomes.
Labour–Management Council
The Labour–Management Council (LMC) is an institutionalised channel for promoting
communication and cooperation between employees and management. The govern-
ment enacted the Labour–Management Council Act in 1980, making it mandatory for
all establishments with more than 50 workers to establish a council. Despite this statu-
tory obligation, only a limited number of enterprises formed LMCs before 1987. Con-
fronted with increasing disputes following 1987 democratisation, management tried
to promote cooperation with workers by implementing the LMC. Consequently, the
number of enterprises with an LMC rapidly increased to over 14,000 in the early 1990s.
In 1997, the Labour–Management Council Act was replaced with the Act Concern-
ing the Promotion of Worker Participation and Co-operation. The new Act stipulates
that all enterprises with more than 30 workers must form a council and hold meetings
every quarter. In accordance with the new law, the number of enterprises that formed
LMCs almost doubled from 15,234 to 29,348 between 1996 and 2001. The number of
LMCs continued to grow, reaching 51,047 in 2016 (KLI 2018).
The LMC is composed of equal numbers of representatives from employees and
management. When an enterprise has a union that represents a majority of the workers,
the union’s leaders are entitled to participate in the LMC as employee representatives.
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According to the Act Concerning the Promotion of Worker Participation and Coop-
eration, workplace issues to be dealt with by the LMC fall into three categories:
issues requiring prior consent by employee representatives (i.e. training and devel-
opment plans, fringe benefit programs, in-house welfare funds, grievance handling,
and operation of joint labour–management committees); issues of consultation with
employee representatives (i.e. human resource planning, workplace renovation and
new technologies, prevention of industrial accidents, redundancy adjustment, working
time rescheduling, pay system changes, and revision in work rules); and issues to be
reported (i.e. corporate strategies and performance, quarterly production plan, person-
nel issues, and the enterprise’s financial situation). Unions often use the LMC as an
extension of their bargaining, while top management at many enterprises is indifferent
to the feasibility of cooperation and communication promoted by the LMC.
Key issues
Non-regular labour, widening pay gap and working hours
The 1997 economic crisis was a complete shock to labour markets. Most enterprises
that had achieved sustained growth and maintained ‘lifetime employment’ policies
before 1997 undertook extensive restructuring of their businesses and employment
practices. This resulted in a fundamental change to Korean employment relations.
According to a survey conducted in 2000, 66 per cent of enterprises downsized follow-
ing the economic crisis (Park & Roh 2001). This shows the huge extent of corporate
restructuring at the time. The survey showed 74 per cent of respondent enterprises
fostered spin-off business and 58 per cent outsourced part of their operations. Moreo-
ver, many enterprises recruited non-regular labour to fill previous regular jobs during
economic recovery in 1999. After a sharp rise in unemployment during the 1997 eco-
nomic crisis, there was a notable reduction in unemployment in the recovery phase.
The unemployment rate remained low, at 3.56 per cent on average, from 2001 until
2008 – the lowest among the OECD countries. Immediately after the post-2007 global
financial crisis, unemployment in Korea was only 3.7 per cent in 2009, while declining
to 3.1 per cent in 2012 and again rising to 3.7 per cent by 2016.
The biggest problem with Korean labour markets is the worsening job quality and
polarising employment structure, mainly resulting from the sustained reduction in good
jobs and the widening disparity between good and bad jobs. The decrease in good jobs
at large enterprises was mainly due to management policies of downsizing and out-
sourcing. The employment size of enterprises with more than 500 employees decreased
from 2.1 million in 1993 to 1.3 million in 2005 (Kim 2005). Moreover, the process of de-
industrialisation has accelerated since the mid-1990s, leading to a reduction in manufac-
turing jobs. This change in the composition of sectoral employment is associated with
a worsening quality of jobs. Between 1997 and 2017, the percentage of employment
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278
International and comparative employment relations
accounted for by the manufacturing sector declined from 21.4 per cent to 16.9 per cent,
whereas that sector’s share of GDP increased from 26.7 per cent to 30.4 per cent.
The size of the non-regular workforce soared sharply after the economic crisis of
1997, as demonstrated by an increase in the share of contingent employment in the
total working population, which increased from 41.9 per cent in 1995 to 51.6 per cent
in 1999. Thus, the over-use of and discrimination against such non-regular employees
has become a hot labour market issue since the early 2000s. The relative share of the
non-regular workforce declined from 37.0 per cent in 2004 to 33.0 per cent in 2018.6
The decrease in the non-regular workforce is explained by the government’s strength-
ened regulation to protect non-regular workers in response to societal concern about
their vulnerable employment conditions.
The growing polarisation of labour markets is exemplified by the widening gap in
overall employment conditions, including pay and fringe benefits, between the pri-
mary segment for regular workers at large enterprises and the secondary segment for
workers in small enterprises and non-regular employment. There has been an increas-
ing pay discrepancy between large and small enterprises. For example, the average pay
in small enterprises with 10–29 employees declined from 90 per cent of the average
pay in large enterprises with more than 500 employees to about 59 per cent between
1986 and 2007 (see Figure 11.1).7 The pay level of small enterprises between five and
nine workers amounted to 54 per cent of the pay in large enterprises with 300 or
more employees in 2017. The pay gap between regular and non-regular workers also
100.0
90.0
80.0
70.0
60.0
50.0
40.0
10–29 30–99 100–299 300–499
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Figure 11.1 Trends in monthly wage discrepancy by firm size
Source: Korea Labour Institute (2018)
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Lee: Employment relations in South Korea
279
increased. For instance, the monthly pay of non-regular workers dropped from 61 per
cent of regular workers’ pay in 2003 to 55 per cent in 2018 (KLI 2018).
Labour market polarisation is also evident in fringe benefits and HR development.
The discrepancy in enterprise-level expenditure on fringe benefits and training between
large and small enterprises has been constant since the early 2000s. Large enterprises
with more than 1000 employees expended twice as much on fringe benefits, and eight
times more on training, than small enterprises with 10–29 employees. Many non-regular
workers have been excluded from statutory welfare and labour standards. In 2018, about
40 per cent of these workers benefited from statutory welfare programs, such as a
national pension (37 per cent), medical insurance (46 per cent) and employment insur-
ance (43 per cent). Only 25–42 per cent of non-regular workers are protected by statu-
tory labour standards, including extra work premiums, paid vacations and severance pay.
As in Japan, another problem with polarised labour markets is the lack of job
mobility between the primary and secondary segments. Many studies have shown that
non-regular jobs are dead end in the peripheral sector, rather than functioning as ‘step-
ping stones’ to regular employment (Han & Jang 2000; Lee & Shin 2017; Nam & Kim
2000). Note that employees at large enterprises have a much shorter tenure than their
counterparts in the United States and Japan (Jung 2006). Even workers at unionised
large enterprises have been threatened by management-led restructuring initiatives,
including outsourcing, spin-offs, business re-engineering, the reallocation of produc-
tion facilities and the use of non-regular labour.
Labour market polarisation results not only from the external shocks of an eco-
nomic crisis, but also from the strategic choices of key actors and their interactions
in the (re)shaping of labour market institutions. Growing labour market segmentation
can be attributed to: neo-liberal economic reforms, led by various governments in the
post-1997 period; captive value chains dominated by large enterprises pursuing profit
maximisation, which makes small suppliers more inferior and results in an increase of
non-regular labour; and business unionism focusing on the representation of union
members’ interest and excluding unorganised workers in small firms and non-regular
employment. These factors have led to a worsening polarisation of the labour market.
There has been growing concern that labour market polarisation causes social disinte-
gration, as exemplified by a sharp rise in both crime and divorce, and that it weakens
sustained economic development (Lee 2005).
Although Korea introduced the 40-hour working week by law in 2003, it has
recorded the second longest annual working hours of the OECD member countries.
In recent years, the government has made efforts to reduce working hours as a policy
mechanism to widen the share of decent jobs. While the Lee Myung-bak government
attempted to constrain extra working hours and holiday work, the Park Geun-hye gov-
ernment took steps to create permanent part-time jobs, with its policy goal of increas-
ing the level of employment. Under the Moon government, the Labor Standards Act
was amended to limit the legal maximum of weekly working hours to 52 in early 2018.
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International and comparative employment relations
Box 11.1: Reduction in working hours at
auto plants
In 2012, management and unions at Hyundai Motors reached a historic agreement to
implement a two day-shift system to reduce working hours and remove night-shift work.
Before this agreement, workers at Hyundai auto plants had worked in the day–night
work-shift system, under which they were scheduled to work the day shift for 10 hours
(from 8:00 am to 8:00 pm) one week, and the night shift for another 10 hours (from 8:00
pm to 8:00 am) the next week. Under this system, Hyundai auto workers were reporting
to work for around 2,500 hours per year, when their extra work was estimated which
included weekends as well as regular working days. In the new work-shift system, which
abolishes night-shift work and caps daily extra working hours, Hyundai workers are
scheduled to work two rotational day shifts (the day one shift is 6:00 am–3:00 pm and
the day two shift is 3:00 pm–1:00 am). This change in the work-shift system, implemented
at Hyundai auto plants by the 2002 agreements, has since diffused through other auto
companies, including Kia Motors and General Motors, and auto parts suppliers. It should
also be noted that a micro-corporatist approach, equipped with a process of corporate-
level consultation by three parties – management, union, and auto industry and industrial
relations experts – was applied to the design and implementation of the new Hyundai
work-shift system.
Confrontational industrial relations and new organising approaches
Despite the decreasing trend in disputes, industrial relations continued to be adversar-
ial in the post-1997 period. As illustrated in Table 11.1, the number of labour disputes
dropped to below 100 in the mid-1990s, but grew sharply after 1997 and peaked at 462
in 2004. The number of labour disputes continued declining, down to 65 in 2011, but
increased to 120 in 2016, reflecting a mistrust between unions and management. This
has been seen as a crucial constraint on national economic competitiveness, with the
International Institute for Management Development (IMD)’s World Competitiveness
Report indicating that Korea has fallen considerably in relation to, for example, Japan,
Taiwan and Singapore.
While labour disputes during the economic crisis of 1998 and in the following
years took place largely due to government-led and employer-driven restructuring,
many labour disputes in the 2000s have been associated with non-regular employment
and industrial bargaining. Since the early 2000s, the growing presence of non-regular
labour has brought forth a contentious industrial relations issue. National labour cen-
tres and non-government organisations (NGOs) have launched campaigns demanding
legislation to constrain employers in their use of non-regular employment.
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Since the late 1990s, non-regular workers, who have suffered from disposable
employment and discriminatory working conditions, have attempted to organise their
own workplace unions in sectors such as auto manufacturing, transport, construction
and public administration. These workers have also engaged in militant collective
action, demanding improvements to their working conditions, and regular status. Most
of these unions, however, have failed to achieve organisational sustainability as well
as their intended bargaining outcomes, due to employers’ harsh suppression as well
as regular workers’ unions’ indifference or interference (Lee 2005). After 2006, when
laws to protect contingent labour were enacted, many enterprises terminated their
contracts with non-regular workers and replaced them with subcontracted labour,
which resulted in intense confrontations with dismissed non-regular workers. Even
though the unionisation of non-regular workers was less than 3 per cent during the
2000s, the excessive use of, and discrimination against, non-regular labour has created
acute tensions in industrial relations at the national and enterprise levels. Since the late
2000s, subcontracted workers in the manufacturing industries have been at the centre
of non-regular labour issues, in that many have organised themselves to protest against
employers’ illegal use of those subcontracted workers, to engage in law suits and to
take industrial action. In addition, the large-scale downsizing at Ssangyong Motors
in 2009 and Hanjin Heavy Industries in 2011 produced severe union–management
confrontations and triggered citizens’ voluntary campaigns to protest against manage-
ment’s unilateral layoffs. Industrial unionisation, led mainly by KCTU affiliates, whilst
successful until the late 2000s, has a shallow presence in each sector, with a limited
concentration of organisational resources (e.g. financial funds and union staff). The
industry unions have faced employers’ strong opposition to centralised bargaining, so
that there has been little extension of industry-wide contracts to the unorganised or
non-regular workforce (Lee 2002).
Laws prohibiting wage payments to union officials and allowing multiple unioni-
sation at the establishment level8 were implemented in 2010. These changes in the
institutional industrial relations framework have had a negative impact on unions,
particularly KCTU affiliates. Employers encouraged the organisation of a pro-com-
pany second union to weaken the existing militant unions by taking advantage of
the multi-unionisation clause. Some employers resorted to union-busting consultan-
cies to destroy recalcitrant unions, which became a crucial labour scandal during Lee
Myung-bak’s government. Given the prohibition of employers from paying wages to
union officials, paid time off was provided to them instead. The paid time off system,
however, has reduced the number of full-time officials working on union activities by
24 per cent.
The Park Geun-hye government imposed a large sum of compensation as dam-
ages on the striking Korean Railway Workers Union, which launched collective action
against the government’s plan to privatise the national railways in 2013. Claims for
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International and comparative employment relations
compensation against unions’ collective action have become a focus of labour law
reforms, demanded by unions and NGOs. Public sector unions have raised other
issues: civil servants and teachers have complained about the restriction on collective
bargaining and industrial action by the current laws. They have also been critical of the
statutory extension of ‘strike-free’ essential services, a legal clause introduced in 2007.
Therefore, industrial relations in the public sector remain contentious.
Confronted with an unfavourable change in labour laws and the sustained anti-union-
ism of employers and conservative governments, unions have lost their bargaining power
and organising capacity. Since the late 2000s, however, new organising approaches to
representation of the unorganised on the margins of the labour market (i.e. non-regular
and small firm workers, and youth and the aged under precarious employment or unem-
ployment) have been observed in the terrain of labour movements. Given a recurring
failure to recruit non-regular workers at the enterprise level, new attempts to organise
those precarious workers into community-based unions were initiated in the late 2000s.
The exemplar case of community unionism is the Hope Solidarity Union (HSU), formed
in 2009. During the 2010s, this union launched a series of active organising campaigns
and was successful in unionising over 4,000 contracted workers at various work sites
(including call centres, cable TV engineering shops, and mobile phone service centres)
in the Seoul metropolitan area. The HSU has devised and operated a variety of com-
munity-based solidarity networking activities, such as cultural concerts, liberal arts and
media study programs, community gardening, and international exchange for immigrant
workers, to assist and involve non-regular workers in Seoul (Park etal. 2014).
There has been a series of innovative attempts to unionise by a new organisational
logic of age cohort groupings during the 2010s. Such new unionisation is exempli-
fied by the Youth Union. The Youth Union was formed in 2009 as the first age-cohort
union, which aims to organise and represent young precarious workers aged between
15 and 35 years. The union has effectively launched a series of targeted campaigns to
protest against the so-called ‘black companies’, which treat young workers in an inhu-
mane and illegal manner in coffee shops, fast-food chains and pizza restaurants. The
Youth Union reached a policy agreement with Seoul City in 2013 to undertake joint
efforts to expand job opportunities for young workers, and enhance their job quality.
Owing to its successful activities to represent young workers via protest campaigns and
policy consultation, the Youth Union’s membership has increased sharply from 472 in
2012 to 1,270 in 2016, and its number of non-member supporters has also grown from
244 to 604 during the same period. It is noteworthy that a number of worker centres
were formed with the aims of representing non-regular workers’ rights and carrying
out various activities to protect those precarious workers. These worker centres have
proliferated nationwide since the Korean Contingent Workers’ Centre was established
in 2000. As local governments, including Seoul Metro City, offered financial assistance
to the establishment and operation of local labour centres in the 2010s, the number of
worker centres had increased to 37 by 2017 (Jung etal. 2017). The Korean Non-Regular
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Lee: Employment relations in South Korea
283
Worker Centre Network, formed in 2012, has engaged in a variety of solidarity actions
to mutually support non-regular workers’ struggles across the country, and put pressure
on the government to adopt policy solutions to improve precarious workers’ employ-
ment conditions.
Conclusion
During the past 30 years, Korea, which had a tragic modern history in the first half of
the 20th century but has achieved remarkable economic development in the second
half, has experienced a fundamental transformation in its political economy regime
and labour market system, mainly resulting from democratisation in 1987 and the eco-
nomic crisis of 1997. Since the 1997 economic crisis, in particular, consecutive govern-
ments have adopted neo-liberal reforms and institutionalised social dialogue among
interest groups (Lee & Lee 2003). In this light, the Korean political economy regime
appears to have evolved into a hybrid model of LMEs and CMEs (Lee & Kang 2012),
going beyond the theoretical dichotomy of LMEs and CMEs outlined above (Hall &
Soskice 2001). In other words, the country’s political economy has been reshaped by
the neo-liberal deregulation policy of the LME model, while simultaneously embracing
the persistent ‘strong state’ legacy and the involvement of interest groups in CME-style
social dialogues, within the context of globalisation.
Under the developmental regime (1961–87), employment relations in Korea were
largely shaped by government-driven economic development policies. From 1987,
remarkable changes occurred in employment relations at the national level as well
as at the workplace level, along with the democratisation of the political regime. The
post-democratisation period has been characterised by the growing segmentation of
labour markets and the institutionalisation of labour–management relations. After the
1997 economic crisis, employment relations witnessed another round of structural
transformation, approaching a market-driven LME model aided by the government’s
neoliberal reforms. Employment relations in the post-1997 era might be featured as
precarious and polarised, as exemplified in the proliferation of a non-regular work-
force and a widening pay gap, as well as employer-dominated industrial relations. At
present, social dialogue, led by the Tripartite Commission (renamed the Economic,
Social and Labor Council in 2018), is marginalised, while organised labour continues
to be weakened. Hence, key aspects of Korean employment relations seem to move
primarily towards the LME-style pattern, albeit with some mixed characteristics of
Asian legacies and CME-style social dialogue. Note that tripartite cooperation became a
significant condition for coping with the disease and economic crisis of the COVID-19
pandemic in the early 2020s; the three parties have reached a series of social accords
to overcome the coronavirus catastrophe through a union–employer compromise of
‘no layoff and no strike’ at the national level and in some industrial sectors (e.g. the
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Discussion questions
1. How do two critical junctures of the Korean political economy – democratisation in
1987 and the economic crisis of 1997 – affect the reshaping of employment relations?
2. What are the pros and cons of Korean enterprise-based industrial relations in com-
parison to the industry-based industrial relations of European countries?
3. How have the neoliberal reforms to deregulate labour markets affected employment
relations in Korea?
4. Using the Varieties of Capitalism framework, where would you position Korea’s politi-
cal economy and employment relations system on the spectrum between LMEs and
CMEs?
5. In the context of labour market polarisation, how might greater solidarity between
regular and non-regular workers be built?
Further reading
Choi, J. (1989) Labor and the Authoritarian State: Labor Unions in South Korean
Manufacturing Industries, 1961–1980. Seoul: Korea University Press.
Kim, D. & Bae, J. (2004) Employment Relations and HRM in South Korea. Aldershot: Ashgate.
Koo, H. (2001) Korean Workers: The Culture and Politics of Class Formation. Ithaca, NY:
Cornell University Press.
Lee, W. (ed.) (2004) Labor in Korea, 1987–2002. Seoul: Korea Labour Institute.
Lee, Y. & Kaufman, B. (eds) (2018) The Evolution of Korean Industrial Relations and
Employment Relations. Cheltenham, UK: Edward Elgar.
Useful websites
Human Resources Development Service of Korea: www.hrdkorea.or.kr/ENG
Korea Employment Information Service: http://eng.keis.or.kr/main/eng.do
Korea Enterprises Federation (KEF): www.kefplaza.com/kef/kef_eng_intro_1.jsp
Korea Labor Foundation: http://inosa.or.kr/eng/front/main.act
Korea Labor Institute: www.kli.re.kr/kli_ehome/main/main.jsp
Ministry of Employment and Labour: www.moel.go.kr/english/main.jsp
medical and airline industries). It remains to be seen how tripartite partnership is
working in dealing with the COVID-19 crisis, and whether it can be sustained in the
post-COVID-19 era.
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A chronology of Korean
employment relations
1876 Japan forcefully opens up feudal Chosun
1888 First unionised strike by gold miners
1898 Korea’s first union, the Seongjin Stevedores’ Union, formed. Chosun mining
strike
1910 Japan occupies Korea
1919 National Independence Movement (1 March)
1920 First national labour organisation, Chosun nodong-kongjeahoe (Chosun
Labour Fraternal Association), led by liberal intellectuals
1922 Socialist-led Chosun nodongyeon-maenghoe (Chosun Labour Confedera-
tion) formed
1924 Chosun nonong chongyeonmaeng (Chosun Labour and Farmer Confedera-
tion) formed. Law and Order Maintenance Act represses union and labour
movements
1929 First general strike in Wonsan
1938 Unions prohibited with onset of China–Japan War
1945 Korea is liberated from the Japanese, and US AMG established. National
and Provincial Mediation boards begin. Chunpyung (General Council of
Korean Trade Unions) formed
1946 Child Labour Law and Basic Labour Law enacted. Labour Department
established. September National Strikes called by Chunpyung. Daehan
dogrib chockseong nodong chongyeonmyeng (General Federation of
Korean Trade Unions) formed
1947 Chunpyung banned by the AMG
1948 Syngman Rhee elected as the president of the First Republic. Five-Year
Economic Rehabilitation Plan aimed at economic independence from con-
sumption aid
1950–53 The Korean War
(Continued)
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International and comparative employment relations
1953 Trade Union Act, Labour Standards Act, Labour Dispute Adjustment Act
and Labour Relations Commission Act enacted
1959 Cheonkuk nodongjohab hyeobuiehyo (National Council of Trade Unions)
formed as an independent national centre
1960 19 April Student Revolution deposes Syngman Rhee. Chang Myeon gov-
ernment elected. FKTU and National Council of Trade Unions merge to
form a new national centre, Cheonnohyeob
1961 General Park Chung-hee takes power by a May military coup. The mili-
tary government forces FKTU to be restructured into 12 industrial union
associations
1963 Park Chung-hee elected as the president of the Third Republic. Labour
laws revised
1970 Restrictions on unionism in foreign-owned enterprises
1971 Law Concerning the Special Measures for Safeguarding National Secu-
rity gives Park Chung-hee a despotic presidency. Compulsory arbitration
extended to all industries. KEF established
1975 Labour Standards Act extended to enterprises with between 5 and
15 employees
1979 President Park Chung-hee assassinated
1980 Military coup by General Chun Doo-hwan
1981 Labour–Management Council Act, Industrial Safety and Health Act and
Minimum Wage Act enacted; scope of Industrial Accident Insurance and
Compensation Act extended
1987 Democratisation Declaration in June; subsequent Great Labour Struggles
1991 Cheonnohyup (Korea Trade Union Congress) formed. Korea joins the ILO
1995 Minjunochong KCTU formed
1996 PCIRR formed. Korea joins the OECD. The unilateral labour law amend-
ments by the government provoke public outcry in December
1997 Wave of general strikes organised by KCTU and FKTU, followed by the revi-
sion of amended labour legislation. Financial crisis breaks out
1998 Kim Dae-jung government begins. Tripartite Commission agrees to intro-
duce more labour market flexibility, including layoffs for managerial reasons
and use of dispatched labour. KHMWU established as a frontrunner of
industrial unionism
(Continued)
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1999 Unemployment rate jumps to record 8.5 per cent in February; KCTU with-
draws from participation in Tripartite Commission. General strike called
by KCTU to protest IMF’s restructuring programs, but fails to gain public
support. Teachers granted legal right to form a union. KCTU is officially
recognised by government
2001 Tripartite Commission agrees to reduce standard working hours to
40hours per week
2003 Transport workers’ union calls general strike to demand labour rights for
self-employed workers
2004 Tripartite Commission reaches the Social Pact for Job Creation
2006 Public servants granted the legal right to organise unions and engage in
collective bargaining. Non-regular labour protection laws passed
2007 Tripartite Commission renamed Economic and Social Development
Commission
2008 Lee Myung-bak government announces ‘MBnomics’, which includes
business-friendly labour market deregulation to promote labour market
flexibility
2009 Government campaigns for work-sharing programs and adopts active
labour market policy to create jobs through youth internships and public
works projects. Social pact agreed to overcome the impact of the post-
2007 global financial crisis
2010 The labour law is revised to prohibit multiple unionisation at the enterprise
level and employers paying wages to union officials. Time-off system allows
union officials’ paid activities
2013 The Park Geun-hye government enacts the Ageing Workforce Law, extend-
ing the compulsory retirement age to 60
2014 A social pact is agreed to promote labour market reform. The court’s ruling
raises hot labour issues concerning non-standard workers (i.e. subcon-
tracted worker status) and regular pay, which is applied to the calculation
of overtime and holiday pay
2017 President Park Geun-hye is impeached owing to her corruption scandals.
The new Moon Jae-in government announces a policy to convert non-
regular workers into regular employment status in the public sector
2018 The Labor Standards Act is amended to limit the maximum weekly working
hours to 52. The Tripartite Commission becomes the Economic, Social and
Labor Commission
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288
International and comparative employment relations
Notes
1 The authors would like to thank Chris F. Wright for his insightful comments on earlier drafts
of this chapter.
2 The FKTU was formed in 1946 as the anti-communist union organisation, which was patron-
ised by right-wing political leaders to fight against the All-Korean Labor Union, led by social-
ists. The FKTU was a partner supporting the authoritarian regime’s labour policy until 1987.
3 The share of male members in total union membership increased from 63.3 per cent in 1980
to 77.6 per cent in 2016 (KLI 2018).
4 Australian Prime Minister Bob Hawke, who visited Korea in 1989, gave President Tae-woo
Roh advice about the tripartite social dialogue model and its achievements for forging labour–
management cooperation and overcoming economic difficulties in Australia. President Roh
was impressed with that approach and sent government officials and research fellows to
study Australia’s experiences in early 1990.
5 The government expanded the scope of the Minimum Wage Act to include all businesses
in2000.
6 There have been hot controversies on the size of the non-regular workforce, drawing on
the Economic Active Population Supplementary Survey conducted by the National Statis-
tics Office yearly since 2002. The Labour Circle insists that the number of people in the
non- regular workforce includes workers under recurrent renewal of temporary employment
contracts, who are excluded by the government’s statistics. According to the Labour Circle’s
estimate, for instance, the non-regular workforce in 2018 was around 40.9 per cent (821 mil-
lion) of the working population, compared with the government’s estimate of 33 per cent
(661 million).
7 Figure 11.1 illustrates the growing pay discrepancy between large and small enterprises. Defi-
nitions of workplace size changed after the 2007 survey; subsequent data are not comparable
(KLI 2018). Hence, it is not practicable to update Figure 11.1 to include recent years.
8 Multiple unions were allowed at the national and sector levels by the 1997 TULRAA revision.
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