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Labor-Management Relations Warming

Posted December. 09, 2006 10:31,   


Kim Yong-mok, the always smiling and humming man as well as the chairman of the Noroo Paint Company labor union (Anyang, Gyeonggi Province), was prudent all the more as his year-end bonus payment day drew closer. Again this year, he is determined not to mention anything regarding bonus payments to the management.

“Since the company grants each and every favor of the workers, we dare not even mention our requests to the company,” he says with a laugh. As performance of the company has been successful this year, needless to say, company members are expecting a bonus of over 100 percent. While other firms, whether large or small, were suffering under the harsh business conditions, Mr. Kim’s concern seems almost enviable.

Labor Union Asks to Cut Wages While Company Wants a Raise-

Noroo Paint Company, the second top company in the painting industry, has succeeded in negotiating without a labor-management dispute for eight years in a row. The wage negotiations held at the end of March this year went off without a hitch and was drawn to a conclusion in just an hour.

Wage negotiations in 2002 are reminiscent of a rather bizarre dispute:

Labor: “Let’s raise wages on a five percent rate this year.”

Management: “You mean only five percent? Considering the firm’s performance, an eight percent increase seems more appropriate.”

Labor: “Well, we all don’t intend to eat today and starve tomorrow. We should also take the future into account.”

While the labor union called for a slightly higher wage, the employers offered a significantly higher one. However, there was once a time when Noroo Paint suffered a dark year. In 1998, Noroo Paint (formerly DPI Company) showed a loss for the first time in its 53-year history. Among the painting industry, panic-stricken rumors arose that Noroo Paint had failed.

When placed at the crucial juncture of deciding the matter of whether “to die all together or find a solution,” the workers were the first to make a decision.

“The labor union members said they would acknowledge a layoff. Thus, about 300 workers out of 1,000 payroll employees volunteered to leave the company,” according to Kim Jang-ho, chief of Personnel Affairs.

When leaving the company, what the labor union members trusted was the firm’s promise “to reinstate the workers after the firm recovers.” Those colleagues who stayed returned their special bonus to the company and did not receive any bonuses and overtime allowances. The firm’s quick recovery is credited by the striving efforts by the workers.

The company kept their promise. One year after the dismissal, the management started to reinstate workers and eventually called about 200 workers, all who wanted to return, back to the company in August 2001.

It was in these moments of a turning point when the conflictual and ceaseless striking labor management relationship turned into a win-win situation on the grounds of trust.

A Considerate Labor-Management Relationship-

Since the company underwent the financial crisis, the executives have held a monthly briefing on monthly performances in front of the workers, and paid attention to employees’ difficulties and suggestions. Noroo Paint recognized that “communication” is the first step in order to improve productivity as well as profitability.