Govt, Businesses Seek to Protect Managerial Control

The government and businesses are seeking to revise the law so as to counter the growing power of trade unions, which they believe now pose a threat to managerial control of companies.

The move comes as concern is rising as a result of the labor-management talks at Hyundai Motor. Many industry observers and business leaders point to that the arrangement will tip the balance between labor unions and management.

˝The results of the talks might harm corporate competitiveness by compromising managerial control of companies and flexibility in the labor market,˝ said Minister of Commerce, Industries and Energy Yun Jin-shik on August 6.

˝The labor-management agreement at Hyundai Motor allows the trade union to intervene in such major decision-making processes as building overseas factories, reinforcing workforce and laying off employees,˝ said an official at the ministry. ˝We are seeking ways to protect managerial control and business operations against labor collective actions.˝

The government plans to prepare a comprehensive labor-management relationship model by the end of this month. To ensure businesses rights to defend their managerial control against labor unions, the ministry is considering allowing businesses to mobilize alternative workforce during a strike; reducing the time set for pre-notice from 60 days to 30 days; defining illegal labor and workers` activities; and easing regulations on mobilization of workforce.

˝Now that we see a strike after another and businesses having hard times talking with unionists, the government and businesses agree that the current labor-management relation might harm corporate and national competitiveness,˝ said Lee Gyu-hwang, director at the Korea Federation of Industries(FKI). ˝We expect the government to include provisions designed to reinforce corporate managerial control in the new labor-management relationship model it is now toiling on.˝

˝A business cannot grow if it is not allowed to reduce the number of employees when necessary,˝ said Nam Sung-il, economics professor at Sogang University. ˝The law stipulates that businesses can protect their managerial control against workers` collective actions.˝

Meantime, business organizations such as FKI and the Korea Employers Federation issued statements denouncing the agreement at Hyundai Motor. ˝Hyundai Motor infringes upon the property and shareholders` rights by recongnizing labor`s right to veto managerial decisions,˝ said FKI in a statement.

˝It is unprecedented that a business grants the labor the right to intervene in decision making, which we believe will only serve as venom for the future of the automobile industry,” said KEF.

Yeon-Su Shin Eun-Woo Lee ysshin@donga.com libra@donga.com