Strategy of Trade Union Intervention
in Restructuring Process
Korean
Confederation of Trade Unions
The
need for and the types of strategy of intervention
- Trade union intervention is needed to obtain employment
security, non-reformist reform, organisational consolidation
- the strong society-wide perception that the inefficiency
and immoral practices of the chaebol system were the causes
of the economic crisis provides advantageous opportunities to
promote active intervention strategy
- strategy of intervention can be directed at three
levels: intervention in ownership structure, intervention in
supra-enterprise level policy formulation, enterprise level
participation in management
- Intervention in Ownership Structure
- Intervention in ownership structure is aimed
at consolidating public ownership within the broader ownership
structure or to restrict the ownership by private capital. There
are three forms of this intervention strategy:
- Creation of a separate fund, such as wage-earners
fund, to promote the working class as the centre of collective
ownership
- Utilising the existing pension and funds to promote
social ownership and at the same time limiting the private ownership
of capitalists
- Transforming the ?employee shareholders programmes?
so that trade union organisations can exercise the ownership
rights of individual workers in a collective manner
- fund is created by contribution from a part of corporate
profit and is managed by an executive body where trade union
representatives make up the majority
- democratic transition of system orientation, restriction
on wealth concentration, industrial policy effect, promotion
of industrial democracy can be expected as key results
- would be difficult to introduce in short term due
to considerable social resistance; but successful cases of ?employee
buyout firms? can lead to the creation of better social receptiveness
- Reform the pension system
- the appointment system can be reformed so that trade
union representatives can dominate the executive bodies of pension
funds; investment of the pension fund in corporate shares can
lead to greater influence
- expansion of social ownership, consolidation of control
on capitalist ownership, industrial and employment policy effects
can be expected as key results
- currently there is widespread perception of the inefficiency
and non-economic performance of the four major social insurances,
including the National Pension Scheme fueling changes in the
institutional arrangement; it would not be difficult to influence
the course of change to be advantageous to workers
- Reform of the ?employee shareholder programmes?
- Needs a special law addressing the needs of employee
shareholder programmes; should pave the way for financial support
for ?employee shareholder programmes? by the government and
financial institutions
- Create a two-tiered ?employee shareholder programme?:
one at the level of individual enterprises and the other a national
programme which can have a similar effect as ?wage-earners fund?;
trade unions can utilise their control in ?employee shareholder
programmes? as a vehicle for management participation
- The current government initiated effort to introduce
ESOP needs to be prevented; and it would not be difficult to
introduce necessary laws and democratisation of the management
of current ?employee shareholder programmes; centralised management
of the funds of the enterprise level ?employee shareholder programmes?
and strike funds can enable the national trade union organisation
to create new central fund
- Supra-Enterprise Level Policy Intervention
- There are three courses for intervention in
economic and industrial policies at supra-enterprise level
- they are: intervention through state agencies, intervention
through tripartite consultation, and intervention through collective
bargaining (between labour and employers)
- intervention at an enterprise level cannot be free
from the concern about competition amongst companies; this leads
to a greater need for supra-enterprise level intervention
- the results of intervention following the start of
restructuring process cannot produce anything more than a partial
change or compensation for ?damages?; therefore, there is a
need to establish prior intervention to check on over-investment
or inefficient investment which could prevent the greater future
damage to both the labour and management
- Intervention through state policy formulation
process and state agencies
- intervention through financial institutions: intervention
in the evaluation of management performance of specific companies,
intervention as an institutional investor with a capacity to
invest or withdraw from specific industries or enterprises,
?discrimination? in the lending policies and conditions according
to specific industries and enterprises ? these are the forms
of intervention which can lead to the creation of an effective
influence on employment policies and investment decisions at
industry and enterprise levels. This requires the participation
of trade union representatives in financial institutions and
financial supervisory agencies
- investment fund system: intervention to develop capital
formation through absorption of extra profit of companies can
encourage the dilution income inequality, expansion reinvestment,
and promotion of productive investment and employment-creating
investment
- intervention for employment security: aimed at establishing
legal and institutional mechanisms for the consolidation of
social safety net, for union-management consultation and agreement
on employment adjustment, and for compulsory minimum compensation
for laid-off workers and employment and staff development plan
- Intervention through tripartite consultation
- what trade unions can aim to achieve through tripartite
process is an employment alliance to promote economic growth
and employment security
- an agreement between labour and employers will require
mutual concessions. This can be made easier by government compensation.
Therefore, tripartite consultation can be advantageous compared
to direct labour-employer consultation or negotiation
- specific industry level or regional level tripartite
consultation can promote regional industrial development and
job creation, and trade unions can contribute to the establishment
a network to assist small-to-medium enterprises which lack technological
and financial resources
- Intervention through direct labour-employer
collective bargaining
- introduction of solidaristic wage system can apply
pressure on inefficient sectors and expansion of reinvestment
in the high-efficiency sectors leading to employment creation.
This can lead to an effective industrial restructuring where
labour force is transferred from inefficient sectors to efficient
sectors. This can also restrict the widening of wage difference
amongst workers; this can aid the preparation of the ground
for the establishment of industrial unions
- work-sharing through working hour reduction, limit
on overtime work, and establishment of employment adjustment
fund system can be obtained through collective bargaining. This
can lead to pro-labour industrial restructuring
- Participation in management at enterprise level
- Strategic participation in decision making process
by a union enables prior intervention
- can introduce pro-labour orientation and elements
in structural adjustment including employment adjustment
- there are two types in enterprise level management
participation: one is appointment of worker representative in
the board of directors, while the other is a system of co-determination
- Introduce a system of appointing worker representatives
as members of board of directors and/or board of auditors
- worker representative in board of directors can provide
a secure source of important information
- the introduction of German style separation of supervisory
board and executive board would allow constant supervision of
executive board and the exercise of a check and control on the
unilateral power of chaebol owners. But this requires an in-depth
examination of relevant laws and legal system for necessary
amendments
- an easier option is the appointment of worker representatives
as members of board of directors or auditors. Already a system
of appointment of trade union recommended outside company directors
and auditors is introduced. However, this is a lower form compared
to worker representative board member
- Two models of co-determination: Swedish model
and German model. But, resistance against the German system
would be weaker, therefore easier to pursue
- There is a need to establish the key issues related
to labour condition as matters requiring agreement and other
management related issues as matters requiring consultation.
Wide ranging issues and interest should be made subject to information
disclosure. Types of information can be classified into two:
one where there is unlimited right for access to the information,
and those which are subject to application or claim for information
disclosure.
- Institutional mechanisms must be introduced to strengthen
the binding force of the labour-management consultative councils:
increase monetary penalty for violation or failure to comply,
introduce scaled-up penalties, including business suspension
orders for accumulation of violations or failures to comply.
There should be a clear stipulation that decisions reached at
labour-management consultative councils have the same binding
force as collective agreements
- The need to promote a Swedish model of expansion
and consolidation of the power and jurisdiction of collective
agreement as a long term task
- all issues and concerns related to labour (working)
conditions and labour relations must be defined and established
as legitimate subject matters for collective agreement so that
matters of management and personnel decision can be included
in collective agreements
- conflict and tension can arise from strengthening
of labour-management consultative councils and strengthening
of collective agreement. Therefore, it would be necessary to
maintain the current stipulation that collective bargaining
and other activities of trade unions are not affected by the
various legal provisions about labour-management consultative
councils
- it is necessary to stipulate that collective agreements
have legally binding force and that the first right of interpretation
of the agreement lies with workers representatives who are the
weaker party in the labour market
- Method of pursuing the various intervention strategies
- Intervention by trade unions is not a panacea,
and therefore should be taken up with care and caution
- intervention by trade unions must be undertaken on
the basis of organisational strength and dominance at the shopfloor
level. This requires a consolidation of vertical and horizontal
integration within the national organisation
- there is a need to identify and clarify the philosophic
objective and concrete strategy of the movement and organisation
to minimise internal confusion and conflict
- it is impossible to avoid responsibility concomitant
with intervention; internal democracy and a system of small
discussion and decision making groups in the rank and file level
must be consolidated to overcome individual or collective egoism
within the ranks of workers
- must establish principles and guidelines of intervention
at industry level and system of support and regulation of enterprise
level intervention to prevent the dangers of co-optation accompanying
intervention
- Consolidate education to develop and cultivate special
and professional capacity and develop a mechanism for mobilising
the support and participation of outside specialists
- Consolidate education and publicity work to overcome
rank and file disinterest in management participation
- Develop various arguments and persuasive capacity
to mobilise members and a wider societal understanding and support;
need to develop a pro-active publicisation of cases of success
- In an absence of institutional mechanism of participation,
it is necessary to disempower the unilateral drive of management
through non-cooperation and resistance at the shopfloor level
to enforce a habit of prior consultation with trade union
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