KFIU Introduction

2010.9

KFIU Introduction

2010.9

Korean Financial Industry Union

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Contents

Organization Affiliate Members of KFIU Change of KFIU’s Union Members Major History Major Outcomes of KFIU - Frontier of Five Day Work-Week - Organizing Irregular Workers 2010’s HOT Issues - Time Off System in Korea - Performance-based Pay System

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Organization

ITUC Federation of Korea Trade Union(FKTU)

Korean Financial Industry Union(KFIU)

National Convention

Central Committee

President / Executive Vice President

Representative Convention

Policy Making & Public RelationsBureau

General Secretary

OrganizingBureau

External Relations and EqualityBureau

Edu. & CultureBureau

Accounting &Backup Bureau

UNI

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Affiliate Members of KFIU

Commercial Bank(7)

AffiliatesTotal 34

Government Invested(10)

Regional Bank(6)

CooperativesAnd others(11)

Shinhan Bank

Woori Bank

SC First Bank

Hana Bank

Korea Exchange Bank

Kookmin Bank

Citibank Korea Inc.

Korea Development BankIndustrial Bank of KoreaExport-Import Bank of KoreaKorea Credit Guarantee FundKorea Technology FundKorea Housing Finance CorporationKorea Finance CorporationKorea Asset Management CorporationKorea Appraisal BoardKorea Enterprise Data

Daegu Bank

Busan Bank

Kyongnam Bank

Kwangju Bank

Jeonbuk Bank

Jeju Bank

National Agricultural Cooperative FederationNational Federation of Fisheries CooperativesNational Credit Union Federation of KoreaKorea Financial Telecommunications & Clearing InstituteWoori Finance Information System

Other finance-related firms

Change of KFIU’s Union Members

1962 1980 1989 1992 1998 2002 2003 2007 20090

20,000

40,000

60,000

80,000

100,000

120,000

140,000

- After 1997 financial crisis, about 60,000 decreased.- During 2008~2009, about 20,000 members increased due to organiz-

ing irregular workers. They were shifted from irregular status to regular workers. 5

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Major History

In 1960, KFIU was established by 5 commercial banks in association form. One year later, it was transformed into industrial level union.

In 1981, it was shifted to enterprise level union according to compulsory re-vision of labor laws under the military regime.

Since the 1997 IMF financial crisis, about 60,000 workers were laid off after 5 banks’ liquidation. In 2000, KFIU felt keenly the necessity of industrial level union

since it fully recognized the limitation of enterprise level union un-der the worsening labor movement circumstances.

KFIU again transformed the union type into industrial level union to address the challenges under deregulating economy and labor market. It was the first case among FKTU affiliates.

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Major Outcomes

In July 2002, KFIU signed 5 day work-week agreement after long & winding argument and negotiation with employers and gov-ernment. This was very historical event to initiate the legislation of 5 day work-week in Korea.

5 day

work-

week

Organiz-ing Ir-

regular Workers

Since the 1997 crisis, KFIU has constantly raised irregular workers issue to government and political world.

KFIU is the frontier of addressing and organizing irregular workers by shifting them to regular workers. That created a great sensation to busi-ness world and society.

KFIU is still raising irregular workers issue that

would cause economic polarization and bring negative economic effects and to worsen decent jobs.

2010 Hot Issue 1 : “Time-off System” “Time-off System” is aimed at the ban on wage payment to full-time unionists

under the Trade Union and Labor Relations Adjustment Act. For the collapse of la-bor movement, government allowed “Time-off Limits” which means a ceiling within which the labor and management may agree on the number of eligible full-time or part-time unionists.

The number of full-time unionists eligible for time-off is “smaller on top, larger on bottom”. Union Size

(Unit: person)Paid Time-off Limit

(Unit: hour) Remarks

Fewer than 50 Up to 1,000• Unions with fewer than 300: In case

full-timers are replaced by part-timers, their number may not more than triple the number of eligible full-timers.

• Unions with 300 or more: The num-ber of part-timers may not more than double the number of eligible full-timers.

50~99 Up to 2,000100~199 Up to 3,000200~299 Up to 4,000300~499 Up to 5,000500~999 Up to 6,000

1,000~2,999 Up to 10,0003,000~4,999 Up to 14,0005,000~9,999 Up to 22,000

10,000~14,999 Up to 28,000

15,000 or more

Until June 30, 2012: up to 28,000 + additional 2,000 per every 3,000

personsOn July 1, 2012 or af-

ter: up to 36,000 8

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2010 Hot Issue 1 : “Time-off System”

KFIU waived “time-off limits” by the end of this year because the current collective agreement shall be valid until December 31, 2010.

From next year, KFIU have to reduce 295 incumbent full-time union-ists down to 161 people, which means 46% cut even though KFIU gets the maximum numbers within the time-off limits from employers through this year’s collective bargaining.

Among KFIU’s affiliates, larger unions such as Kookmin Bank, Nong Hyup, and Woori Bank should decrease their current full-time union-ists by 58~67% at least.

If an employer insists on a number of paid time-off hours which is way below the given limit, it would escalate into a labor conflict.

Especially government-invested financial institutions will face tough negotiation with their employers because government strongly con-trols labor union activities and tries to reduce full-time unionists for weakening the strength of labor unions in public sector.

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2010 Hot Issue 2 : “Performance-based Pay” The government is forcing state-owned banks or institutions to introduce “perfor-

mance-based salary system”, dismantling previous “rank or career based salary system” which has been peculiar labor market practices and culture.

Government guideline reads that all government-invested companies have to sim-plify wages and all other welfare benefits into unified annual salary system at-tached performance-based pay.

In addition, performance-based pay to gross annual salary should be extended to more than 30% and the range of the higher and the lowest should be over two times according to the result of business performance.

Basic Salary- Same pay in case of same rank or same ca-

reer-

90%

Incentives based on per-formance

-about 20% difference be-tween the higher and the lowest within 10% of total

pay

10%

Current System

Basic Salary- Same pay in case of same rank or same ca-

reer-

70%

Performance-based salary

-more than 200% differ-ence between the higher

and the lowest

30%

New System

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2010 Hot Issue 2 : “Performance-based Pay”

KFIU is struggling against this new pay system due to the fol-lowing reasons;

1. State-owned financial companies should prefer more impor-tant values such as common good or public interest to busi-ness results. This performance-based business and pay sys-tem could damage precious common good which is invisible, but very invaluable.

2. Performance-based pay system could cause discrimination and conflict among union members, which is against solidar-ity spirit and “equal work equal pay” principle. Consequently it might weaken the strength of labor union activities.

3. Performance index or appraisal is not objective nor reliable. In reality, we can’t have objective views in relation with “invisi-ble” things or synergy which could bring tremendous out-comes in future through cooperation or joint works.

The End