Non-regular Workers Face Obstacles

Lee, working for Woori Bank’s customer service center, receives 400,000 won each quarter from the bank for her son’s tuition fees since she was promoted to a regular position last year. Now, she gets more money from the bank for her lunch and transportation expenses. The bank will also provide her with university tuition fees for her son from next year.

The 49-year-old woman said, “After becoming regular workers, single female workers say that they have more chances to meet more qualified men. But, our salaries are not that different from before the change.”

It has been a year since the bank adopted its own job security model, just before the new law designed to protect non-regular workers took effect in July 2007.

Woori Bank’s measures seemed to be better than those adopted by other firms. For instance, since the implementation of the new law, many distributors have either fired non-regular workers or outsourced. Among those distributors, the nation’s major retailer E-land suffered from severe conflicts between labor and management. The Korea Exchange Bank promised to guarantee tenure for non-regular workers but it still differentiates them from regular workers in terms of wages. Nevertheless, Woori Bank’s model has its own limits to spread further.

○ Boosting Employees’ Morale

Woori Bank converted its 3,076 non-regular workers into regular ones in March 2007. They are generally satisfied with enhanced corporate benefits.

Kang, working for an Woori Bank branch in Seoul, went to Jeju Island with her family for a week for vacation in late July 2007. The 29-year-old employee only had three days off a year when she was a contract worker. However, she could enjoy a one-week-long holiday last year as part of benefits coming along with the regular worker status.

Another worker at the branch said, “I really felt that I had become a regular worker when candidates for the labor union election came and asked me to cast a ballot for them late last year.”

Woori Bank spent some eight billion won to improve benefits for the converted regular workers. In an effort to support the bank’s decision, 12,000 existing regular workers agreed to freeze their wages, thus helping the bank save 30 billion won. The bank believes that its decision did no harm to its finance since it helped boost the morale of converted workers and strengthen their royalty.

Kim, head of a team at the customer service center, said, “In the past, I used to urge my team members to stay until 9 p.m. to study before the company-wide assessment test. However, now they voluntarily stay until later than 10 p.m.” She also noted, “Two out of ten non-regular workers used to quit due to stress. But now, no one wants to leave the bank.”

○ Invisible Discrimination

However, converted workers still have complaints. Even though they have their tenure guaranteed, the kinds of work they do are strictly separated from those of existing regular workers. Moreover, they get only 70 percent of the wages earned by original regular workers. That has coined a new term of “medium regular worker.”

A Woori Bank employee working at the private financial service sector complains, “I hope I’ll have a chance to deal with a variety of roles. However, even when the worker in charge of lending takes a holiday, I cannot replace him since I’m a converted worker. Some managers even refer to us as “tellers” behind our back.”

In an effort to narrow the wage gap between converted workers and other workers, Woori Bank increased the pay of existing regular workers by 3.2 percent, while raising those of converted workers by 4 percent in 2007. However, the bank says it cannot provide a completely identical treatment for regular workers and converted workers since they were hired through different recruiting processes.

○ Woori Bank’s Model Has Its Own Limits

Some in the business circles argue that Woori Bank’s model can be applied to only the financial sector where human resources are one of most critical assets.

However, few banks have followed Woori Bank due to stunning costs. The KEB converted 1,000 non-regular workers into contract workers who can work until they reach the retirement age. Despite guaranteed tenure and improved corporate benefits comparable to regular workers, former non-regular workers are still discriminated when it comes to wages and promotion. Kookmin Bank and Shinhan Bank followed the KEB’s suit.

Eun Su-mi, an associate fellow of the Korea Labor Institute, said, “It’s a half success through which banks provide job security but fail to deal with wage discrimination. No one can address all the issues at once. They need to give new chances to converted workers through a reasonable capability assessment process.”

peacechaos@donga.com libra@donga.com