State firms` labor agreements infringe managerial rights

KEPCO KPS, a state-run energy company, has a personnel regulation that guarantees all of its workers` employment even when the company closes temporarily or permanently. A clause in the company`s collective bargaining agreement with its labor union states that even if the company closes temporarily or shuts down permanently, it will succeed its employees` employment and length of service. The company said that although it sought to revise the clause because it infringes upon managerial rights, it has remained in the agreement for over 15 years due to opposition from the labor union.

There are growing senses of crisis that labor unions` infringement upon managerial rights and politically appointed executives` irresponsible management at state-run corporations have reached an untouchable level. Some experts argue that the government`s plan to reform state-run companies that focuses on reducing debts and welfare is only a temporary measure equal to administering pain-killers on a cancer patient, calling for restructuring of the overall management systems.

According to the Ministry of Planning and Finances on Wednesday, it instructed 295 state-run or state-funded organizations across the country to report clauses in their collective bargaining agreements that potentially infringes upon managerial rights. As a result, 40 such organizations reported such clauses.

If nine state-funded research institutes that have collective bargaining agreements guaranteeing no pay reductions for their employees, labor unions of a total of 49, or 17 percent, of the public organizations infringe upon managerial rights. In other words, one out of six public organizations has labor unions exercising influences over management.

Some of such clauses in question state that salaries will never be cut under any circumstances or that employers must allow employees to take a leave of absence who wish to do so to start their own businesses. Some public organizations have collective agreements requiring employers to consult with labor unions before deciding a lockup, a managerial right. Some organizations even have clauses promising not to punish their employees even when they go on a strike.

The government ordered the public organizations to submit by the end of Marc their "normalization plans" to correct such clauses infringing upon managerial rights. However, it is unclear whether such plans will be feasible, as many of the public organizations do not have biennial collective bargaining negotiations planned this year. In addition, it is likely that labor unions will refuse to revise their collective bargaining agreements.

Labor leaders of 38 public organizations that are required to submit reform plans by the end of this month, including the Korea Land & Housing Corp. and the Korea Electric Power Corp., plan to hold a representatives` meeting Thursday and announce that they will refuse revisions of their collective bargaining agreements and reject the government`s management evaluations. The finance ministry says that the labor unions will have to cooperate because the management evaluations that would determine the level of their performance bonuses include revision of collective bargaining agreements.

"Taking away vested interest requires enormous efforts," said Park Jin, a professor at the Korea Development Institute. "In order to reform public organizations, the government should stick to law and principles more than it did during the recent railway workers` strike."