Korean Finance Industry Union declares industrial negotiation breakdown

At a joint Bank Union Presidents meeting on 18 July, KFIU President Pak Hong-Bae announced that the fifth round of industrial central negotiations held with their industry-level negotiating partner, the Korea Bank Association (KBA), had broken down.

Since 12 April, an intensive 25 rounds of negotiations have taken place, including 17 rounds of working-level negotiations, two rounds of executive-level negotiations, five rounds of delegation negotiations, and 1 round of representative negotiations.

The final straw that broke the negotiations was the KBA’s continued refusal to accept most proposals put on the table. Critically, in the current inflationary environment, the banks’ management refused to raise wages by more than 1.5 per cent, a rate lower than the minimum wage increase and significantly lower than the wage increase rate of large corporations in other sectors.

President Pak Hong-Bae said, “In view of the difficult internal and external environment, we expected smooth negotiations between labour and management and actively agreeing to the early settlement of the industrial negotiations, but it is unfortunate that the gap in the level of understanding and acceptance between us is so huge.”

The KBA stalled on issues such as preparing a response plan in case of relocation or closure of offices at all levels, a union delegate’s participation in the board of directors meeting as an observer, creating and expanding high-quality jobs in the sector, expanding the internal labour welfare fund, and diversifying business and working hours, including a 4.5-day week. The only provision that received agreement was the enactment of a declaration and displaying of posters to raise awareness of harassment in the workplace.

The KFIU were deeply disappointed that among the proposals they put up, despite the KBA agreeing that efforts to improve the public’s perception of the financial industry are necessary, the three joint labour-management social contribution project proposals were not discussed. The projects will, respectively, fund support for the construction of a Medical Center, provision of psychological counselling support for call centres contracted by the financial sector, and the recruitment and placement of supporters to assist the elderly customers visiting bank branches. 

President Pak Hong-Bae said that the KFIU would submit a mediation application to the Central Labour Commission on 18 July. He also warned that depending on the mediation outcome, the financial sector union does not rule out strike action.