markets, corporate governance, addressing risks of the digital divide, social safety nets, enhancing flexibility in the labour market, venture capital, and strengthening intellectual property rights and enforcement. Each category includes three sections for comments on 1) situation up to crisis, 2) ongoing reforms, and 3) remaining issues. The ‘enhancing flexibility in the labour market’ section shows that Korea has worked to present a more flexible labour market to international speculation, as is shown in Figure 1.
In 2001, Chung Tae Sung, secretary-general of the Federation of Korean Industries (FKI) warned the nation that in a time of declining employment of young college graduates, only increased labour market flexibility could aid for a revival of industrial competitiveness and increase employment. Korea would have to revise corporate regulations on items such as ‘days off’ and ‘special leave’ and bring them into line with
‘international standards, prior to the full-scale implementation of a five- day workweek system’ (Korea Herald 2001). So even in 2001 Korea struggled to reform to international standards. What else would it take to convince the international business community of Korea’s competitive- ness and durability during the historical bloc of neoliberalism?
Institutional Restructuring I: Tripartite Commission and
Tripartite Commission, investors gained confidence in Korea’s attempts to improve labour relations. KCTU representatives argued that government representatives were thus in a position of authority over the other participants in the discussions that ensued. The Tripartite Commission demonstrates the state’s efforts to involve an increased number of voices into the restructuring project, which shows that the newly democratic regime was at least aware of workers’ justified demand for inclusion. Nonetheless, this institutional platform for discussion was continuously unsuccessful. The government aimed to garner consensus, but ultimately, only coercion was evident.
Dialogue on Recovery: Social Pact of the Tripartite Commission The First Tripartite Commission was established January 15, 1998.
Representatives included at the government level representatives from three major political parties, the Labour Minister, and the Finance Minister. The Korea Employers Federation (KEF) and the Federation of Korean Industries (FKI) represented the employer/manager segment of the Commission. The Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU) sent delegates to give union representation. The FKTU is a large umbrella union grouping with an average membership of 242, which is smaller than the KCTU, but in cooperation with the government much more than the militant KCTU.
All parties agreed that the economic crisis was partially the failure of each segment to prepare appropriately for economic difficulties (Tripartite Commission 1999: 169). The ‘Tripartite Joint Statement on Fair Burden- Sharing in the Process of Overcoming the Economic Crisis’ was attractive for the Commission’s purpose. On February 6, 1998, 90 items were agreed at the meeting called ‘Agreement to Overcome the Economic Crisis’. 21 issues were earmarked for further discussion. The Social Pact was initiated by the government and was composed of the following (Lee and Lee 1999: 172).
1. Management transparency and corporate restructuring.
2. Stabilisation of consumer prices.
3. Employment stabilisation and unemployment policy.
4. Extension and consolidation of the social security system
5. Wage stabilisation and the promotion of labour-management cooperation.
6. Enhancement of basic labour rights.
7. Enhancement of labour market flexibility.
8. Increase of export and improvement of the international balance of payments.
9. Other issues to overcome the current economic crisis.
10. Agenda for social cohesion.
Eleven Priority Tasks were discussed, with the hope to promote them at a meeting of the Subcommittee on Labour Relations (Tripartite Commission 1999: 7):
1. Securing the basic labour rights of teachers and government workers.
2. Recognition of the right of the unemployed to join non-enterprise- based trade unions.
3. Revision of the political fund act to ensure political activities of trade unions
4. Reduction of the statutory working hours (including reform schemes for holiday and leave systems).
5. Reform of the wage system.
6. Matters regarding punishment for the payment of wages to full-time union officials.
7. Matters regarding adjustment of the scope of essential public utilities projects.
8. Matters regarding activation of labour-management consultation on various levels, such as business type, region, etc.
9. Trade union organisation and bargaining structure (enterprise- and industry-specific improvement measures).
10. Improvement plans for the severance pay system.
11. Legislation of the basic act on industrial safety.
The 90 items agreed upon included consolidation of employment adjustment related laws and the reform of the wage system: reforms that would affect workers most immediately. The proposals, if followed by every member, were written to promote recovery from the economic crisis. The first Social Pact (above) included items that required govern- ment, unions, and management operational initiatives in a three-way trade- off system. However, ‘trade-off’ was an unfamiliar term, considering unilateral economic policy making of the past. Negotiation in the past had not been applied under conditions of consensus and was not easily executed.
Failure of Consensus and Union Reaction to Flexibility Law While the Tripartite Commission was designed to encourage negotiation, the KCTU was heavily criticised by its members for accepting an early lay- off system (see #7 of social pact). The influx of foreign corporate take- overs has been directly related to the overwriting of the lifelong employ- ment security law, and foreign companies were shy of an inflexible work force. Mr Yoon of the KCTU2 claimed that just after the KCTU withdrew from the Commission, the government’s permission to pass new laws to facilitate ease of employment adjustment was the initial violation to agreements. This would essentially clean officials’ hands by way of passing a high level of responsibility to foreign companies for employee welfare (Strom 1998).
The KCTU withdrew participation from the Commission in response to pressure from its members after delegates agreed to the establishment of a ‘flexible work force’. The Commission could not continue.
‘Enhancement of labour market flexibility’ was one of the first matters filed in the Social Pact, and before workers could be consulted was immediately categorised as being ‘implemented’. The matter was an enactment of the Act Relating to Protection for Dispatched Workers.
Labour flexibility, however, was the term used to grant layoffs ‘should there be an urgent management need, or under the cases of mergers and acquisitions (M&A)’. The Act was a double-edged sword, as it granted permission of unions’ increased political involvement from 1998, but simultaneously, labour laws were revised to permit employment adjust- ment and casualisation of labour.
The Korea Confederation of Trade Unions said it had no choice but to break away from the tripartite committee. Union leaders argue that under the government’s unilateral reform program … only the workers are forced to make sacrifices. KCTU has called the govern- ment to end mass layoffs. It also wants job security through shorter working hours and a greater social safety net for the two million unemployed. KCTU President Lee Kap-yong has offered to resume talks … but only if the government comes up with measures to strengthen the committee’s role and power. … It said, unless the government stops its unilateral restructuring drive by next month’s end … it (KCTU) too will leave the tripartite body. So far, the government is taking a hard line stance.
(KOILAF 1997)
Not only the KCTU but also the Federation of Korean Trade Unions (FKTU), traditionally the government’s trusty companion stated that if the government continued what they called unilateral restructuring moves, they would not participate in an organisation supposedly designed to give more voice to unions and by default, workers. The FKTU was in agreement when the KCTU reacted to downsizing and company take-overs, which shows an unprecedented move between two previously antagonistic groups. This reshuffling of social forces is part of the hegemonic struggle occurring during the negotiation for Korea’s restructured future, a shuffle that unfortunately had little impact in the final outcome of decisions made at the Commission. Overall, the Commission itself is a form of trasformismo in the sense that the govern- ment organised the forum to demonstrate that it wanted to listen to previously excluded voices and to appear accommodating to workers who would suffer the greatest impact by the crisis. But workers’ needs were quickly re-articulated into a discourse of ‘flexibility’, unions were pressured to come to a type of agreement, but ultimately, even the second and third commissions were unsuccessful because unions found little success in representing workers in this historically developmental state.
Second and Third Tripartite Commissions
After the failure of the first institutional arrangement to come to complete consensus on all pieces of discussion, in June 1998 the Tripartite Commission was revived with the hope of establishing more concrete goals and communication between members. Its new mission was to draft policy proposals to fulfil ‘social agreements’ of the original Commission and for tripartite policy-consultation and economic restructuring of banking, finance, and the public sector. The second Commission aimed to provide teachers’ right to organise, to allow unemployed workers union membership, and to minimise ‘potential confrontation’ between parties.
Barriers for agreement, however, included mutual mistrust over the issues of unpaid wages, collective agreements infringements, and employment stability (Lee and Lee 1999: 173).
The third Commission was inaugurated on September 1, 1999. Matters discussed at this Commission included wage payment of full time union leaders, wage system discrepancies, and union representation at the Commission. The Commission was and still is a forum for discussion and voting of members on issues proposed and included in the agenda, and so
on, but it is not a legislative organ. It cannot pass laws. So discussion may be conducted at the table of negotiation, but resolutions are not laws.
While the main item differentiating the Tripartite Commission from previously attempted social dialogue models is the requirement for consensus, resulting in the paralysis of many discussed items and in turn, government has unilaterally taken steps to pass policies to suit its overall goals. There is a chronic lack of trust between members who have only associated in the past according to relationships based on hierarchies. The mistrust is also garnered from a history of ‘policy means to impose controls over organised labour’s demands and resistance, rather than promoting a democratic process of tripartite consultation and administer- ing its balanced outcomes’ (Lee B. H. 1999). The essence of negotiation is based of a complex body of rules that are both formal and informal, and the Commission as an institution was invented as a means to find consent between all three parties represented at the meetings. This nonetheless did not prevent government representatives from using historically repeated behaviour of imposing its authority and enacting policies. So the government typically has behaved as more of an authoritarian leader than a democratic entity at Commission forums.