Labor-Management Conflicts No Longer Seen As Serious Issue

In the conference room at Okpo shipyard of Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME) in Geo-jae, Geongnam Province at around 6 p.m. on June 18, Jung Sung Leep, president of DSME, and negotiators including Kim Kuk-lae, the union leader gave each other a firm handshake. They finally came to an agreement on employment negotiations for this year. The agreement was reached after 48 days of tense negotiations having started on May 2, the shortest ever negotiation period in the company`s history. The unionists accepted the management`s proposals with an approval rating of 78.55%, the highest support ever.

Since 1987, company negotiations over employment contracts took around five to six months. Last year, for instance, negotiations were held 49 times since May and a temporary agreement was reached seven months later on December 26. And during that period, new union representatives replaced their predecessors whose terms ended.

Kim Jong-sik, secretary general of the union said: “Negotiations this year were finalized earlier since the management presented its final proposal promptly. Who would want to raise their voices in the heat of the burning sun anyway?”

In making management performance transparent, the company proposed a reasonable increase in salaries for workers, based on the company`s enhanced performance. For their part, unionists also made a compromise and accepted the proposal for the sake of both the well-being of the company workers and the company`s prosperity. Since the agreement, both management and union members were able to both find themselves in a “win-win” situation.

An increasing number of companies in Korea are pursuing these types of win-win strategies, based on mutual compromise, while others including the nation`s two union federations have stubbornly continued their general strikes. As union members increasingly choose practical gains over reckless protests however, companies are rewarding them in turn with financial dividends from increased performance.

Dongkuk Steel Mill Company has had a tradition of negotiation-free wage contracts for nine years since 1995. The company has built a solid reputation for firm labor-management relations based on mutual trust and cooperation. In 1993, the company`s unionists voluntarily started initiatives to increase output, breaking away from traditional hostility, and the company, in turn, appreciated their contribution with dramatic wage increases. In the following year of 1994, the company`s unionists publicly announced that “there would never be a walkout in the company`s future.”

Although suffering the worst performance in the first half of this year in the wake of global outbreaks of SARS (Severe Acute Respiratory Syndrome), Korean Airlines, which once planned massive lay-offs, has now come out with reconciliatory measures through discussions with the union. Both sides cut a deal by agreeing to reduce benefits and induce voluntary retirement. The company also offered a consultation program to help over 200 retirees find other jobs or open their own businesses.

Volvo Construction Equipment Korea, a successor of Samsung Heavy Industries, has an open system in which managerial meetings are open to union members. During the 2001 strikes, however, the company applied the rigid standard of “no work, no salary” to protesters. Jeon Tae-ok, vice president of the human resources department said that the “key to an advanced labor-management relationship is dialogue and compromise, based on the principle of the law.”

smhong@donga.com