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[Editorial] Unbending partner

Largest labor group discredits itself by ditching tripartite deal with business, government

The head of the country’s largest trade union offered to resign Friday, a day after its delegation voted to reject an agreement reached by labor, business and government representatives on cooperation to deal with the economic fallout from the coronavirus pandemic.

The rejection was disappointing and embarrassing for Kim Myung-hwan, chairman of the Korean Confederation of Trade Unions, who had initiated talks on the tripartite deal.

The accord, which followed weeks of negotiations, emphasized sustaining jobs and strengthening the social safety net while easing financial burdens on companies.

The government is required to work out a universal unemployment insurance plan by the end of this year, with the business community pledging efforts to maintain jobs. In turn, labor representatives agreed to a cut in work hours and other measures to reduce corporate costs.

The three-way accord is seen as mostly reflecting the labor stance. The corporate sector’s calls for a freeze or reduction in wages were not reflected due to objections from labor groups.

But hard-line members of the KCTU insisted that the deal clearly specify a ban on layoffs. Earlier this month, they refused to allow the union leader to attend a ceremony to sign the tentative agreement with his counterparts from the government and the business community.

During their meeting Thursday, KCTU delegates vetoed the agreement by a vote of 805-499, with seven ballots invalid.

The rejection blocked what would have become the first consensus on a tripartite social convention in more than two decades. A similar agreement was reached in 1998, when Asia’s fourth-largest economy was hit by a foreign exchange crisis.

By discarding the results of talks proposed by its own leader, the KCTU has severely damaged its credibility as a partner in dialogue on ways to surmount current difficulties facing the nation.

The Moon Jae-in government, which has adhered to a pro-labor stance since the president took office in 2017, will find it harder to get the intransigent organization to join tripartite collaboration efforts.

It is not only the business community that has responded negatively to the KCTU’s uncompromising attitude, but also the Federation of Korean Trade Unions, the country’s other major umbrella labor group.

Most local firms are struggling to stay afloat amid deteriorating conditions. Even before the initial coronavirus outbreak in January, simultaneous declines in exports, corporate investment and consumer spending were already weighing heavily on the country’s economy.

In the first half of the year, more than 500 firms filed for bankruptcy, the highest number on record. Calls for a ban on layoffs will ring hollow when workplaces disappear.

Under these circumstances, it does not make sense for the labor group to insist that all its demands be accepted. It is doubtful whether the KCTU can defend the practical interests of workers without holding dialogue or making compromises with other economic actors in the face of diverse challenges, including rapid changes in the economic structure and labor market.

Announcing his resignation in a news conference last week, Kim expressed his wish for his organization to “stay connected and see eye-to-eye with the rest of the nation.” He also lamented that its decision-making process had been swayed by the hard-line faction.

The KCTU’s central executive committee is set to meet this week to discuss an interim leadership that will lead the organization until a new chairperson is elected at the end of the year.

The new leadership needs to redefine the organization’s identity and strategy to ensure that it serves the interests of ordinary workers and regains the public’s trust.

Worryingly, Friday’s vote suggests that hard-line figures will most likely take the helm of the KCTU.

If they continue to stick to their obstinate position, they will find themselves alienated by a growing number of the KCTU’s own members as well as the public.

In what may be an omen of things to come, unionized employees of the Bank of Korea recently withdrew from the KCTU, citing the “discrepancy between the directions” in which they and the umbrella group are headed.
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