Rapport où le comité demande à être informé de l’évolution de la situation - Rapport No. 365, Novembre 2012

1. 430. The complaint is contained in communications from the Korean Confederation of Trade Unions (KCTU), and the Korean Public Services and Transportation Workers Union (KPTU), received on 10 January and 10 March 2011.
2. 431. The Government sent its observations in a communication dated 28 October 2011.
3. 432. The Republic of Korea has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), nor the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants’ allegations

1. 433. In communications received on 10 January and 10 March 2011, the complainant organizations allege repression of trade unions and violation of collective bargaining rights in several public institutions and enterprises; the issuance by the Government of a series of directives to curb trade union activities in general; and the refusal to recognize cargo truck drivers as workers and threatening the cancellation of the trade union registration of the Korean Transport Workers’ Union (KTWU).
2. 434. In the complainants’ view, since the inauguration of the new Government in 2008, the freedom of association of workers, an inalienable part of basic human rights, has been severely violated in South Korea. Workers in the public sector are particularly denied their basic labour rights such as the right to organize, the right to collective bargaining and the right to collective action. The Korean Government has issued a series of directives to curb trade union activities in general. Moreover, the so-called “Advancement of Public Institutions” project has resulted in strained labour relations, and, in case of resistance, public sector workers face draconian repression. The complainants summarize the infringements as follows.
3. 435. The Railway Workers’ Branch (the Korean Railway Workers’ Union (KRWU)) of the KTWU, an industrial union affiliated to the KPTU, started collective bargaining in July 2008. Their employer, the Korea Railroad Corporation (KORAIL), proposed an offer for the collective agreement, according to which about 120 clauses out of 170 provisions of the previous collective agreement were to result in deterioration of working conditions. The proposed terms were aimed at removing the guarantee of trade union activities, forcing the trade union to consent to workforce reduction, reducing paid leaves, and adjusting the work system. The KRWU, seeking to make a compromise with the management through dialogue, made a concession and accepted most of the terms proposed by the management. However, KORAIL notified the trade union of the termination of the collective agreement on 24 November 2009. Two days later, the KRWU went on strike. Evidence now shows that the unilateral termination of the agreement by the management was intended to provoke the trade union into taking strike action. An internal company document was disclosed, which clearly says, “[the management] will provoke the trade union into waging a strike action by pressing it with collective agreement termination”. Moreover, according to the document, the management was planning to force trade union members to abandon their trade union membership. The plot was that if the Government declares the provoked strike illegal, the management would debilitate the union through massive disciplinary measures, dismissal of unionists, and pressure on the members to withdraw from the union. The plot is still in operation. The November 2009 strike by the KRWU complied with regulations and legal procedures required to stage a strike. This time the trade union maintained essential services as required by law, even though the trade union recognizes that such regulation severely undermines the union’s right to collective action. However, the administration called the strike illegal on the charge of business obstruction. The Government argued that the strike was to oppose government policies, which is not a subject of labour–management negotiation under pertinent labour laws. In this case, the government policies refer to the plan to advance public institutions. The trade union waged the strike to tackle expected degradation of working conditions. However, the Government argues that such activities constitute an objection to the government policy that is beyond the authority of individual employers. This means that all collective actions against public institutions that are subject to government directives and policies will be declared illegal. During the strike, arrest warrants were issued to 15 major trade union officials, and the trade union’s office was seized for investigation by police. Later, 169 union officials were dismissed, and over 12,000 union members who participated in the industrial action faced disciplinary measures.
4. 436. In the case of the Gas Corporation Chapter of the Korean Public and Social Service Workers’ Union (KPSU), which is affiliated to the KPTU, a collective agreement reached by the management and the union was nullified due to unfair government intervention. In addition, the management offered deteriorated collective agreement terms in step with the public institution advancement project, and the trade union made a concession after a series of negotiation rounds to avoid the worst situation in its labour–management relations. Of course, the poisonous terms were mainly requested by the Government, as shown in the offer of the management. Finally, the two parties came to conclude a new collective agreement on 31 March 2010, which was scheduled to enter into effect from 30 April. However, the management refused to execute the agreement, as the Government took a firm stance and demanded that the management further deteriorate the terms of the collective agreement. The union filed a suit to verify the validity of the new collective bargaining agreement (CBA) and applied for an “injunction against obstruction of union activities”. A court ruled in favour of the validity of the collective agreement. The management of the Korea Gas Corporation (KOGAS) had repressed the union in accordance with the overall government policy against public institution trade unions when KOGAS and the union negotiated the collective agreement. In November 2009, the union went on strike to press for the conclusion of a collective agreement through autonomous labour–management negotiation. The Government and management, however, accused ten union officials on charges of obstruction of business defined by the Criminal Act, and a prosecutor demanded imprisonment of up to 12 months for them.
5. 437. In the case of the Social Solidarity Pension Chapter of the KPSU, similarly, the management repressed labour in step with the government’s instructions for the “advancement” of public institutions and their labour relations. The management also proposed the detrimental revision of the CBA, which would generally stifle trade union activities. Reaching an agreement between the two sides seemed to be difficult. The working-level representatives from the two parties, which had full responsibility for bargaining, however, had reached a provisional agreement on 23 December 2009, but the management overturned it and proposed additional revisions for the worse instead. The management is pushing forward the implementation of an annual salary system under the pretext of the government’s instructions and efficiency of performance evaluations. The union opposed the new compensation scheme, and the management responded by terminating the CBA in March 2010. Despite the union’s opposition to the annual salary system and other attempts to deteriorate working conditions as well as to curb union activities, the management is simply demanding that the union accept the new proposals, insisting they are consistent with government instructions. The union could not help but protest against the newly proposed provisions, but when the union began its collective action in July 2010, the management and Government brought charges against it, just as in the other cases. Six standing union officers were charged with obstruction of business under the Criminal Act. The management has refused to participate in any negotiation and is simply waiting for the union to give in, as there is no CBA in effect.
6. 438. In the case of the Korean Labour Institute Chapter of the Korean Union of Public Sector Research and Professional Workers (KUPRP), the management notified the union of cancellation of the CBA in February 2009. As can be expected, this was part of the destruction of labour–management relations and evisceration of unions taking place in the name of the government’s policy for advancement of public institutions. The Government analysed collective agreements at public institutions, including government-invested research institutions, and proposed a “plan for their improvement”. According to this plan, the range of union activities, the scope of union membership and the breadth of union authority must be “rationally” improved in line with government instructions. At the time of the government’s analysis, the wind of CBA termination was blowing and agreements were cancelled at the Korean Labour Institute and other public institutions. These were measures to “improve irrational collective bargaining agreements”. After the termination of the CBA the Korean Labour Institute Chapter began a strike. At the end of an 85-day strike, the institute director resigned and the workers went back to work. However, real negotiations between labour and management did not follow. Instead, management has been pressuring the union by demanding that the leadership resign, that the union disaffiliate from KCTU and that it agree to a CBA compliant to the government’s standards. In addition, after the director’s resignation, the Government, who until that point had been the main customer of this government-supported institute whose task it is to carry out research related to government labour policy, completely stopped orders for research projects. This is nothing more than a shameless act of revenge, which has led to financial troubles for the institute. As of May 2010, the full staff had their salaries cut by 30 per cent. The Government’s labour repression and control of the union at this government research institute is, in the complainants’ view, nothing less than unconstitutional.
7. 439. At the Korean Institute of Construction Technology Chapter, another chapter of the KUPRP, management carried out disciplinary measures against a worker who made a declaration of conscience against government policy in December 2008. When the union protested against these measures, the management responded in a retaliatory fashion. The complainants state that these measures illustrate the pursuit of “advancement of public enterprises”. In December 2009, the union received notification of unilateral cancellation of its CBA and came under naked labour repression from the management. The Government and management originally promised they would not penalize a researcher who had made a declaration of consciousness. However, after the issue had died down, they went back on this promise and carried out disciplinary measures. The union responded with a determined protest against the measures. In the end, the researcher who had made the declaration of consciousness, a union member, was suspended for three months and the President of the union was fired. The union’s Vice-President was transferred to a testing site far away from Seoul, and when he filed a lawsuit for withdrawal of the unfair transfer, he was fired, too. These repressive measures against the union were clearly made in retaliation. This can be seen in the fact that management even raised issues with an ordinary statement of concern made by the union in April 2009 relating to suspicions that the Institute’s director had plagiarized his Ph.D. thesis. In response, the management is going so far as to attempt to annihilate the union. After only six months, the union, which used to have 400 members and a unionization rate of 90 per cent, has been reduced to only 70 members (17 per cent) due to management pressure. The management has said it would not promote a single union member and will penalize all union members, as well as demanded that they leave the union.
8. 440. The Korean Power Plant Industry Union (KPPIU), a union affiliated to the KPTU, faced a typical process of repressing public institution trade unions: a proposal for a deteriorated collective agreement from the management, unilateral termination of the collective agreements, and charges against trade union officials for calling a strike. All of these processes were in accordance with the Government’s drive to advance public institutions. The KPPIU and the management of power generation companies began collective bargaining in July 2008, and the two parties agreed upon 144 items with only five provisions left to be agreed. On 4 November 2009, a day after the 13th collective bargaining session for the collective agreement was held, the management unilaterally notified the KPPIU of the termination of the collective agreement. The management also closed down the offices of the KPPIU and its five branches in April 2010. In May, the management blocked the union dues check-off and stopped paying office expenses, communication expenses and electric charges of the trade union, thus closing down communication channels with the KPPIU. The KPPIU made concessions on the five unsettled terms and demanded the management to cancel the notification of terminating the collective agreement or extend the validity of the current collective agreement, but the management refused.
9. 441. The complainants conclude that the Government and the management of public institutions have attempted to purge trade unions and put their labour–management relations in peril. The Government demanded that the heads of public institutions “adhere to principles and not to make concessions in personnel and management rights”, ordering the employers of the power companies to thoroughly practice government instructions issued under the pretext of the public institution advancement project thus interfering in the labour–management relations of an individual institution by issuing specific instructions.
10. 442. The complainants believe that the above cases illustrate that basic labour rights of workers at public institutions have been severely damaged. The requirement of ensuring essential services during industrial action effectively denies workers in public institutions the right to collective action. The KCTU and KPTU filed a complaint regarding this issue to the ILO in 2008. Moreover, the right to collective bargaining of trade unions in public institutions is also severely damaged to the extent that autonomous labour–management negotiation is almost impossible. The Government puts restrictions on the scope of collective bargaining through official instructions, and even demands revision of already concluded collective agreements. The Government issued “Public Institution Advancement” directives to “advance” labour relations in public organizations. Any objection from trade unions is rejected under the pretext of complying with government directives. If a trade union does not accept the unfavourable collective agreement, the management terminates the agreement. The trade union begins collective action against the worsening of the collective agreement and working conditions, and the Government calls the action illegal as shown in the case of the KRWU whose strike in 2009 was declared illegal not because of procedural matters but because workers went on a walkout for “non negotiable” issues. The right to organize is also severely damaged. In accordance with government directives, almost all of the public institutions have demanded their trade unions reduce eligibility for trade union membership, actually denying the rights of a trade union as an independent organization of workers.
11. 443. In addition, truck drivers are denied the right to organize from the outset. The Government argues that they are not workers but owner-operators. The Korean Transport Workers’ Union of the KPTU, which is organizing truck drivers, is now being threatened with cancellation of its trade union registration.
12. 444. These violations of basic trade union rights are further detailed below.

I. Repression on trade unions at public institutions

(1) Railway Workers’ Branch (KRWU) of KTWU

(i) Collective negotiations and reason for strike

1. 445. The management of KORAIL and the trade union of its workers entered into negotiation in July 2008 to renew their collective agreement. During the four months of negotiation sessions, the management tried to revise over 120 clauses in the agreement, which was expected to deteriorate employees’ working conditions. The trade union and the management of the corporation had four main negotiation sessions, including those for collective bargaining and wage agreements, and 73 working-level sessions from 29 July to 14 October 2008. During the process, the two parties tentatively agreed on 81 entries out of 170, while about 90 items were left unsolved when they declared the failure of negotiation. Then the trade union balloted members on industrial action from 29 to 31 October, and the majority of union members were in favour of going on a strike.
2. 446. On 11 November 2008, the CEO of the company was arrested for receiving bribes, and the management requested the trade union to delay collective negotiations until March 2009, when a new CEO was scheduled to assume the position. Negotiation sessions for the 2008 collective agreement were supposed to resume in March 2009, but they actually recommenced in May, when the new CEO came to office. On 12 May, labour and management agreed to have a main negotiation session once in every two weeks and working-level talks twice a week. Despite this agreement, the management kept neglecting main negotiations. Even the National Labour Relations Commission (NLRC), which was in charge of arbitrating the dispute over the collective agreement between the management and the KRWU, showed its concern over continued neglecting of negotiations on the part of the management. In the 16th working-level talks (held on 16 October 2009), the management demanded the amendment or annulment of 27 collective agreement provisions that the two parties had tentatively agreed upon during the 2008 negotiations, making it more difficult to find an amicable solution to the stalemate.
3. 447. Finally on 9 November, the management suggested a special negotiation session. The KRWU postponed a strike, scheduled to commence on 14 November, until 26 November in an attempt to bring a peaceful end to the dispute. The KRWU accepted the suggestion and formed a special working-level negotiation team, which was invested with absolute authority over negotiations. A series of special talks were held on 12, 18, 20 and 24 November. Trade union representatives presented their final offer on 23 November, while their counterpart revealed theirs one day later. However, the management unilaterally announced the termination of the collective agreement via fax less than an hour after the 24 November talks were closed, which was an unprecedented practice in the history of labour–management relations in the corporation. Management representatives made no mention of the termination during the last talks, and did not inform labour representatives of it prior to delivering the notice. This showed the management’s lack of intention to conclude a collective agreement through dialogue and negotiation. Finally, the KRWU began to take industrial action demanding the conclusion of a collective agreement on 26 November.
4. 448. The complainants then describe evidence in their possession according to which the unilateral termination of the CBA by the management was planned with the intention to provoke the union into going on strike. Usually, company managers threaten the termination of the collective agreement in order to persuade trade unions to cancel a strike. However, in the KORAIL case, the management planned to terminate it to ensure the trade union went on strike and did not continue negotiation.

(ii) Repression on the KRWU

1. 449. No collective bargaining process in the company has lasted longer than the 2008 negotiation. The management unprecedentedly kept demanding the revision of collective agreement terms to repeal provisions protecting trade union activities and reduce benefits guaranteed by the agreement.
2. 450. The Board of Audit and Inspection of Korea (BAI) inspected the company in 2008 and pointed out that the corporation had failed to meet government standards with regard to full-time trade union officials, paid leave and holidays, providing the source of labour dispute. The “2008 Public Enterprise Management Performance Evaluation Report” published by the Ministry of Strategy and Finance (the MOSF) mainly pointed out that the company’s collective agreement was not consistent with government guidelines. The Report also recommended the corporation to alter monthly contractual working hours from 172 to 209 hours, reduce holidays, etc.
3. 451. Moreover, on 31 August the same year, the Government issued a directive containing performance evaluation criteria for public institution directors with regard to the execution of their management plans. The criteria assigned more points to labour relations-related items, for example collective agreement revision to curb trade union activities, than those from the previous year. Thus, directors of public institutions, to whom the Government wields its budget allocation authority as a controlling tool, had to follow the directive and to make undue demands on trade unions, hampering an autonomous labour–management collective bargaining. Moreover, the criteria include “redressing irrational labour relations/adherence to the law and principles in managing labour relations/actual level of labour–management cooperation” categories to determine whether practices of labour–management relations are rational and legal. Trade unions in public corporations understand that the term “rational labour relations in the directive” actually refers to the termination of collective agreements or the revision of agreement terms to reduce the power of trade unions and that the overall assessment results are largely dependent on this labour relations category. To evaluate collective agreement clauses, there are categories such as “appropriateness of support for trade union activities/influence of trade union over personnel policy and overall management/appropriateness of maintaining working conditions and protecting industrial actions/improvements compared to previous collective agreement”. In addition, the level of performance-based compensation was dependent on evaluation results, and if a director fails to meet a certain standard, he or she would receive a warning. If warnings are given two years in a row, the evaluation report automatically recommends the Government to dismiss the director in question.
4. 452. Today the practice of unilateral termination of collective agreements and repression of trade unions is quickly spreading throughout the public sector like a plague. In the second half of 2008, the Korean Government issued guidelines for collective bargaining to public institutions under the name of “Advancement of Public Institutions”. After their release, a number of public institutions, including the Korea Railroad Corporation, Korea Gas Corporation and five thermal power plant subsidiaries of the Korea Electric Power Corporation, notified trade unions of the termination of their collective agreements. These cases show the effect of the directive. All collective agreement terms in favour of trade unions must be annulled if a public organization is to revise the terms in accordance with the directive, and of course, trade unions can by no means accept these conditions. Thus, the organizations have to resort to the termination of the CBA in order to get points in the evaluation. The trade unions cannot accept the situation and have to respond to these unfair demands with industrial action. However, the performance assessment not just promotes agreement termination but monitors whether the heads of institutions can effectively prevent industrial action and whether they suppress existing labour disputes. Thus, the management takes every measure to oppress trade unions. This is what the “Adherence to rules and laws in managing labour relations” entry actually means. Furthermore, the “Actual progress of labour–management cooperation” provision really refers to a trade union declaring surrender in the form of “non-industrial action” announcement.
5. 453. According to the complainants, when the trade union began the strike, one of the newspapers reported that the Labour Ministry, Prosecutors’ Office, and Police held a joint meeting on 26 November to scrutinize the strike and concluded the strike was not an illegal industrial action. However, on 28 November, the President publicly stated that the public could not understand and should not tolerate the strike, and authorities should not compromise. Immediately after these remarks, the Prosecutors’ Office and the police suddenly changed their position calling the strike illegal and took drastic measures to suppress it, including aggressive criminal investigation. Finally, ministers and vice ministers of five ministries, including the Ministry of Labour and MOSF, issued an address to the nation, which reads “The KRWU strike is illegal, and the Government will respond to it with strict rules and laws.”
6. 454. According to the complainants, the Government applied section 314 of the Criminal Act (Obstruction of Business) to KRWU members passively refusing to work. Then, the Government began an all-out crackdown on the trade union’s collective actions: authorities raided trade union offices and seized equipment, while arrest warrants were issued for major union officials. The President himself ordered relevant officials to consider replacing railway drivers on walkout with military personnel.
7. 455. During the KRWU strike, union members never used physical force or committed crimes such as occupying or ruining facilities. Moreover, only 12,000 workers out of total 25,000 union members participated in the strike to maintain essential services in accordance with laws. The strike was done peacefully and union members just passively refused to provide services.
8. 456. However, the Seoul Central District Court accepted the argument of the Prosecutor’s Office that the strike was illegal and issued the following ruling:
   • Decisions regarding fulfilling workforce shortage of new businesses, workforce reduction and other programmes for the advancement of public institutions are made based on the determination of the management, which falls into the realm of management rights. Reinstatement of dismissed employees, cancellation of accusation, complaint and reprimand, and withdrawal of lawsuit for damage compensation are also the issues not relevant to the determination of working conditions but belong to the authority of the management. Thus, the trade union shall not exercise its right to strike over these issues. Collective agreement clauses concerning maintaining proper number of employees, fulfilling the full number of staff and consultation with the trade union over workforce reduction are not relevant to the determination of working conditions. Thus, the trade union shall not launch a strike on the grounds that there are disputes over these issues.
9. 457. After the President’s remarks, the police began to quell the strike by commencing a questionable investigation into it. On 27 November, the police subpoenaed leading KRWU officials on the charge of obstruction of business. However, the first two appearance dates, 28 and 29 November (Saturday and Sunday), were holidays. Finally, on 30 November, the police requested arrest warrants for the union officials.
10. 458. The management released 980 trade union officials from their positions on 26 November, the due date for the strike and forced them to attend an educational course and to write reports (i.e. admission of guilt). The personnel changes were maintained after 4 December, when workers returned to work. After the mass removal from position was conducted, the management delivered release notices in contents-certified mails to union members’ homes.
11. 459. The company based such measures on Article 52.1 “Lack of abilities to perform duties” of the company’s Personnel Rules. Generally, releasing from position is to exclude an employee temporarily, whose continuation of performing duties has a possibility to cause a severe problem. However, all of the union officials were collectively removed from their positions only because of their role in the trade union. As such, the trade union representatives were removed from their positions once they were confirmed to be participating in the industrial action, while those who returned from the walkout were spared from such disciplinary measures. Moreover, even union officials who were off duty, on leave and sick leave were subject to such measures.
12. 460. Furthermore, the complainants provide examples as to the manner in which, during the KRWU strike, the company put pressure on union representatives and their family members not to join the collective action through direct interview or other methods (home visits, phone, cell phone, text messages, internet and mails) by threatening workers with severe disciplinary measures, including dismissal, and civil and criminal liability, and by defaming the trade union and its leadership and even mentioning the children’s shame at school to add pressure on union members.
13. 461. On 4 December 2009, the KRWU announced its return to work. One hundred and sixty nine trade union officials were dismissed, and all of the some 12,000 strikers faced disciplinary measures (see table), a record number of disciplined employees for a single strike in the history of labour movement in Korea. The disciplinary processes progressed so abruptly that some of the union members were not given enough opportunity to vindicate themselves. The company installed video cameras in the places where disciplinary committees were held to record the proceedings. The trade union demanded their removal in order to protect the human rights of union members and to make sure the disciplined did not feel pressure, but most of the devices remained installed, which, considering procedural legitimacy, purpose, location, and management methods, was definitely illegal. The management also filed a lawsuit against more than 200 individual union officials and members for alleged damages caused by the industrial action worth about 10 billion South Korean wons (KRW) in total (958 million for the warning strike on 6 November and 8.7 billion for the strike from 26 November to 4 December). Some of the union members suffered from severe depression. Claiming damages worth about KRW10 billion for legitimate industrial actions is definitely aimed at destroying the trade union.

    Disciplined workers due to 2009 KRWU strike

    • Year	Dismissal	Suspension	Salary reduction	Reprimand	Warning	Total
      2009	169	407	366	9 405	1 241	11 588

      >
14. 462. After the trade union stopped the strike on 4 December 2009, the management plotted schemes to force trade union members who were in the position of department chief to withdraw from the trade union by persuading them intensively and repeatedly via telephone and in interviews from 7 to 20 December.
15. 463. The management did not have any plan to resume collective bargaining or wage negotiations after the end of the strike. The trade union called for the resumption of collective bargaining without any precondition, but the management rejected the request saying that they would never come to the table unless the union made an official declaration of “no more” strike. The right to collective action is enshrined in the Constitution of Korea, and union members’ collective rights are embodied in an industrial action. Thus, the renunciation of these rights without due process constitutes an illegal and unfair practice.

(2) Korea Gas Corporation Chapter of KPSU

1. 464. The eighth CBA reached by the Korea Gas Corporation Chapter and the KOGAS expired on 13 March 2009. In order to conclude a new CBA, labour and management carried out negotiations from 6 April 2009 to 29 March 2010, which included nine main negotiation sessions and 20 working-level sessions. Breakdown of negotiations and the failure of mediation on the part of the National Labour Relations Commissions in August 2009, the union’s strike in November 2009 and then the KOGAS notification of unilateral termination of the CBA put labour–management relations in a state of intense confrontation.
2. 465. On 6 November 2009 the rail, power plant and gas unions carried out a joint strike protesting against unfair government interference in collective bargaining and demanding independent negotiations, following legal procedures. Nonetheless, the Government claimed that the strike’s goal was to protest against government policy, and therefore illegal, and brought criminal charges against all the unions (in particular, see section I.1). In the case of the union, the single goal of the strike was the conclusion of a CBA. Yet, ten members of the executive committee (full-time union officers) are now facing final sentencing because of charges brought by the company against them. The prosecutor indicted all ten union offices on charges of having violated section 314 of the Criminal Act on obstruction of business and asked that they be given sentences of respectively eight to 12 months on 5 October 2010. In the case that the judge decides in favour of the prosecution, all union officers will be fired. As soon as the joint strike commenced, the company sent, on 11 November, notice of unilateral cancellation of the CBA. The management stated that the cancellation of the collective agreement was unavoidable due to government instructions.
3. 466. Despite the strike, the company continued to avoid negotiations and demand unconditional concessions from the union. In the end, after having passed much time without a CBA, the union judged that it had to concede. In February–March 2010, labour and management agreed to recommence intensive negotiations concerning a total of 53 items with the goal of concluding a new agreement by the end of March. Through several rounds working-level agreements were reached on 50 items. No agreement could be reached on the scope of workers eligible for union membership or the number and treatment of union officers on company salary. However, the union eventually had to make complete concessions which led to a final accord, reached on 29 March 2010, which provided for the continuation of most parts of the previous CBA, plus heavy concessions by the union, including reduction of the scope of workers eligible for union membership and the number of union officers on the company’s payroll by two.
4. 467. On 31 March 2010, representatives from labour and management agreed that the new CBA would go into effect on 30 April and signed an accord to this effect. Finally a valid agreement had been reached. The reason for delaying the entry into effect of the CBA was because the company asked for time to convince the Ministry despite the fact that there was no legal basis for requiring government approval. When the company signed the agreement on 31 March, because it had gotten concessions from the union during the bargaining process, it believed that the Government would eventually accept the agreement. However, as consultations went on, the Government continued to object to the CBA and to insist that new negotiations should be opened after the invalidation of the previous agreement went into effect. On 30 April, the day the CBA was to be announced and go into effect, the Government still maintained its stubborn position. The union, saying that the Government’s opposition should have no effect on the validity of the CBA, requested the management to enforce the agreement. However, the company folded to consistent pressure from the government, with the management stating on 3 May 2010: “I acknowledge that an accord has been reached, but I don’t have the capacity to execute it.” The following day, a notice of unilateral withdrawal of the accord due to the Government’s position was delivered to the union.
5. 468. On 11 May 2010, KOGAS also notified the union that, as six months had passed since its unilateral cancellation of the previous CBA on 11 November 2009, the CBA would lose validity beginning on 12 May 2010. The company claimed that the provisions in the obligatory portion of the CBA including those concerning treatment of union officers on company salary and supporting staff, check-off for union dues, union shop rules, guarantee of paid union activities during work hours, paid education time for union members, protection of outreach activities, office space, vehicle use and other use of facilities, and so on were no longer valid. This was more than just repression against the union and an attack against union activities; it was a statement that it would no longer recognize the union’s existence. But these were not measures the company had planned on its own. They were in accordance with instructions from the Government, which had recommended cancellation of the CBA, and were exactly the same as measures taken in relation to cancellation of CBAs with the power plants union and the metropolitan railroad workers’ union (the Seoul Metropolitan Rapid Transit Corporation Workers’ Union) previously.
6. 469. Accordingly, the company began an all-out attack on union activities and repression against the union, including: (i) measures to return the ten salaried union officers to company work and stop union activities; the officers refused the company’s order to return to work and continued to carry out union activities in the union office; the company sent multiple ‘reminders’ of the order to return to work, exercised pressure by stating that it was accumulating evidence necessary to fire the officers and stopped paying their salaries claiming that they were “absent without leave”; (ii) banning the payment of union activities during work hours; in relation to members who participate in various meetings and education programmes carried out by the union, the company warned it could enforce disciplinary measures based on inspections of workers’ diligence; it also enforced a policy of “no work, no pay”, thus pressuring the members not to participate in union activities; (iii) stopping check-off facilities; the company started discontinuing conveniences and facilities use that had been offered to the union based on the CBA; the first discontinued convenience was union dues check-off; while the union’s collection of membership dues was not put at risk since roughly 98 per cent of members had agreed to pay dues through direct deposit, many unions face fiscal crises because their companies refuse to provide direct deposit services; and (iv) forcing the return of the union office and supplies; the demand that the union return, not only the office space, but also desks and other furniture, telecommunications systems and vehicles amounts to complete denial of union activities. In addition, on 12 May, the company restricted the union’s use of the internal communications network to post information.
7. 470. In response, the union filed a lawsuit on 25 May 2010 to prove the validity of the CBA and at the same time applied for an “injunction against obstruction of union activities” based on the accord reached on the CBA, in order to get relief from the order to return to work and demands for return of the office. Although the court saw the accord reached on the CBA as provisional, on 23 July 2010, the court issued a ruling acknowledging the validity of the CBA stating that, “The agreement reached in this case implied the conclusion of a collective bargaining agreement. This was put into writing and signed by representatives from both the labour union and the employer. Thus, the agreement will be seen as a valid collective bargaining agreement.” The company, however, is refusing to cease its unfair labour practices, stating that an injunction is only an injunction and that it will wait until the results of the lawsuit concerning the validity of the collective agreement. The company continues to follow the government orders, submitting an additional proposal for further regressive revision of the collective agreement and attempting to force the union to submit to it. The Government continues to express its lack of satisfaction with the content of the CBA and demand its further revision going so far as to deny the decision of a court of law.
8. 471. The Government intervened in bargaining from the very beginning. The proposal submitted by the management in March 2009 reflected government orders and was composed of recommendations based on performance evaluations and instructions from the MOSF, items pointed out by the BAI and recommendations by the Ministries of Labour and Ministry of Knowledge Economy. The main content of government instructions included dismantlement of union shop rules, reduction of the scope of workers eligible for union membership by 20 per cent, reduction of union officers on company salary (staged removal of two out of ten officers), limitations on paid union activities and protection of union activities, expansion of workers prohibited from striking through designation of essential services, allowance of substitute work and new hires during strikes, etc. Bargaining tactics were employed with the Government using meetings and oversight measures to apply direct and indirect pressure on the company and ordering it to make absolutely no compromises or concessions in achieving the demands included in the bargaining proposal; thus, the company approached negotiations with a very passive and almost avoidance attitude, and the multiple bargaining sessions were, in fact, meaningless. Thus, the Government has interfered in the whole process of negotiations from the formulation of the company’s proposals, to the negotiation strategy and tactics, to the conclusion of the agreement. The Government must stop its illegal interference in labour–management relations. Execution of the CBA, which was already concluded through independent negotiations, must be allowed.

(3) Public Pension Chapter for Social Solidarity of KPSU

1. 472. The current labour–management relations between the National Pension Service and its trade union, the Public Pension Chapter for Social Solidarity, have been severely strained since the November 2009 strike. The main culprit of such strained labour–management relations is the management who considers the union as something to be exterminated, not as a productive partner. Moreover, the anti-labour sentiments of the Government and its policies unfavourable to workers have fuelled the management’s repression against the union. The management repeatedly said that the National Pension Service, as a public institution, is supposed to follow the government’s directives and is not free from government domination or intervention.
2. 473. At the National Pension Service, collective bargaining started in April 2009, and in 2009 alone the labour and management held 28 sessions in total (five main sessions and 23 working-level talks). The working-level representatives from both parties, who were granted full authority, reached a provisional agreement on 23 December 2009. However, the director unilaterally rejected it, simply because this agreement was inconsistent with his belief, turning labour relations sour. On 15 March 2010, the management notified the trade union of the unilateral termination of the collective agreement. Then, the director pledged good-faith negotiation. The union requested the resumption of negotiations, and the seventh main session was held on 3 June 2010. The labour and management agreed that the main negotiation sessions in 2010 would be limited to the issues the two parties failed to agree upon in the 2009 sessions. However, the chair ignored such an accord, and proposed to detrimentally revise more than 90 collective agreement provisions, including to reduce the management’s responsibility to ensure employment security, to repress union activities, deprive workers of basic rights, cut employee benefits and deteriorate working conditions by introducing a performance-based annual salary system; to impose eligibility of trade union membership and limit the right to join the trade union with regard to workers at departments arbitrarily categorized as “managerial departments”; to limit to seven the number of full-time union officials under the paid time-off system according to the Handbook on Time-off System distributed by the Ministry of Labour; to reduce the frequency of union congress (from twice a year to once a year) and steering committee meetings; to simplify the procedure of transfer of union officials’ position; and to deprive union members of basic rights by abolishing trade union education sessions, requiring the union to consult with the management beforehand when it intends to post banners or other propaganda material or guaranteeing employees who are subject to disciplinary actions only an “opportunity to make statement” rather than a “right to plead” in a disciplinary committee where the union is not allowed to take part to represent its members.
3. 474. The union could not help but oppose the proposal that was expected to hamper autonomous activities of the trade union, infringe basic labour rights, and worsen working conditions. Union members conducted local-level rotating strikes on 5–9 July 2010. There was no change in the behaviour of the management so the union went on a general strike on 15–27 July 2010. The management took a hard stance against the union’s industrial action. Even though the rotating strikes, starting from 6 November 2009, were lawful with regard to procedure and purpose, the management abused disciplinary measures and filed lawsuits against unionists. The six standing executive committee members of the trade union are now accused of obstruction of business as defined by the Criminal Act.
4. 475. The intervention in autonomous labour–management relations by the Government entails serious consequences. The assessment on management performance of public institutions (evaluation of management) and related government directives are among the most significant cases. The Government’s administrative directives also give an excuse for the retrogressive revision of the collective agreement. The Handbook on Time-off System published by Labour Ministry is used as a means to “bombard” the trade union with poisonous demands to curb its legitimate activities, and the MOSF directives give an excuse for wage freeze/cut.

(4) Korean Labour Institute Chapter of the Korean Union of Public Sector Research and Professional Workers

1. 476. The Korean Labour Institute Chapter received a notification of cancelation of its CBA in February 2009. After receiving the notice, it carried out a strike for 85 days. To this date, union members are plagued by insecurity due to considerable government pressure.
2. 477. The root of the problem can be traced to the management’s unilateral termination of the existing CBA before beginning a new round of collective bargaining. Up to the day the CBA was cancelled, the management had always approached bargaining with lack of sincerity.
3. 478. Repression against the union by the Korean Labour Institute is a part of the government’s efforts to devastate trade unions and autonomous labour–management relations in the public sector under the name of the “Public Institution Advancement” plan. The Ministry of Labour analysed collective agreements at public institutions under its supervision and published proposals for their improvement in April 2009, after the notice of collective agreement termination was issued. According to this publication, the collective agreement of the Institute was scored the lowest among those of all analysed organizations. Key problems referred to by the Labour Ministry included the lack of trade union membership eligibility, extensive protection of trade union activities, obligation of the Institute to obtain union consent before reprimanding union officials, and the Employment Security Committee consisting of equal number of members from labour and management. Directors of public institutions were ordered to revise CBA terms that are advantageous to trade unions.
4. 479. Finally, after the cancellation of the collective agreement, the union determined that collective bargaining could no longer be carried out in a rational manner, and went on strike. The management’s insincere attitude towards bargaining did not change. Management continued to refuse bargaining proposals. Therefore, the union chose to go on legal strike for 85 days for the sake of returning management–labour relations to normal, but management responded by closing the Institute and continuously delayed conclusion of a CBA. On 15 December 2009, the director suddenly resigned, after which the union ended its strike and all workers went back to work without having signed a CBA; but the management and the National Research Council for Economics, Humanities and Social Sciences charged all those who participated in the legal strike with obstruction of work. A police investigation is currently under way.
5. 480. Since the staff went back to work, the management has been putting pressure on the union making the following demands: disaffiliation from KCTU, conclusion of a CBA according to Ministry of Labour standards, and resignation of the union leadership. After the former director resigned, the presidency has been vacant, the nomination of a new director delayed and the Government, the Institute’s main customer, has not contracted it for even one research project and has transferred projects to other agencies, meaning that funds for staff salary have become insufficient. Finally, in May 2010 the full staff had no choice but to agree to a 30 per cent reduction of salary.

(5) Korean Institute of Construction Technology Chapter of the KUPRP

1. 481. Until the beginning of 2010, the Korea Institute of Construction Technology Labour Union proudly counted 400 members and a union density rate of 90 per cent. However, six months of concentrated efforts on the part of the management to force members to leave the union, intentional causing of disadvantage to union members, and other pressure caused a rapid decrease in membership. As of the beginning of July, the union had a union density rate of 17 per cent, with only 70 members.
2. 482. Members have suffered disadvantages in terms of promotions and research projects for the sole reason that they joined the union. Union officials have experienced a series of punitive expulsions and suspensions. Union members and officers are facing severe hardship and the union is near collapse due to these measures.
3. 483. Efforts to force members to quite the union began on 2 December 2009, when the management, in pursuit of its “advancement of public institutions” policy, unilaterally cancelled the CBA and told 21 employees of the administrative department that they could either leave the union or leave their positions. As a result 330 of 400 union members left the union, such that there are only 70 members left. Then a rumour had it that no union members would be included in the promotion list that was scheduled to be out on 1 May. Moreover, unionist researchers had trouble in carrying out their missions due to the pressure from the Institute management. Therefore, union members could not help but choose to leave the union.
4. 484. In December 2008, there was an incident involving a researcher who made a “declaration of conscience”. The Government and management originally promised they would not penalize a researcher who had made a declaration of consciousness. However, after the issue had died down, they went back on this promise and carried out disciplinary measures in December 2009. The union protested against these measures and the management responded in retaliatory fashion. The management fired the union President for demanding that the punitive measures against the researcher be cancelled. In addition, it appointed the union’s Vice-President to a testing site in Andong, 300 kilometres away from Seoul, making it impossible for him to participate in negotiations, consultations and other regular union activities. The Vice-President responded by filing a lawsuit against the management calling for cancellation of the unfair transfer. As soon as he did this, the management fired him for filing the suit. For the same reasons, the management also suspended the union’s Secretary-General for three months.
5. 485. Moreover, the management acted as if everyday union activities such as the issuing of a declaration and the holding of events were problematic and included them in the reasons for the President’s firing. The Director of the Institute had received extensive public criticism for having plagiarized his Ph.D. thesis. Thus, the union had raised the plagiarism as an issue in April 2009. It is thus impossible not to see the pressure exercised by the management against the union as a revenge. Accordingly, the union has begun a determined struggle against the management for firing the union President and Vice President and other efforts to annihilate the union.

(6) Korean Power Plant Industry Union

1. 486. The collective agreement between the KPPIU and the management of South-east, South, East-west, West and Central Electric Power Companies was concluded in arbitration by the National Labour Commission on 19 September 2006. On the expiry of the agreement, the management and labour began negotiation sessions to conclude the 2008 wages and collective agreements from 29 July 2008.
2. 487. By the fifth negotiation session for collective agreement held on 22 October, the two parties agreed upon 79 items out of total 140 entries (137 main clauses and three appendices). In the sixth session, held on 4 December 2008, the two parties came to agree on 144 items with only five provisions left to be agreed. The labour and management, however, failed to come to a final agreement, and referred the matters to the arbitration of the NLRC on 12 October 2009. Three arbitration meetings followed on 21, 23 and 27 October. On 28 October, the NLRC decided to halt mediation. On 4 November 2009, a day after the 13th collective bargaining session for collective agreement was held, the management unilaterally notified the KPPIU of termination of the collective agreement.
3. 488. The management closed down the offices of the union on 1 April 2010, when the fifth executive committee of the trade union took office. However, the trade union tried to solve the labour–management dispute through dialogue, and sent the management a memorandum to call for the resumption of collective bargaining the same day. The trade union suggested that the two parties accept already agreed items and focus on undecided issues to solve the dispute without any confrontation.
4. 489. The management came up with a new offer for the collective agreement, which ignored previously agreed terms and contained deteriorated conditions instead, at the tenth working-level talks held on 14 April 2010, the first meeting between labour and management since the 5th executive committee took office. At the 14th collective agreement negotiation session on 21 April, the KPPIU made concession on the five unsettled terms for broader interests and required the management to accept the other 144 items and to cancel the collective agreement termination notification or extend its validity. However, the management refused the suggestion.
5. 490. On 26 April, with a view to the forthcoming expiry of the CBA, the management notified the trade union that it would disapprove of full-time trade union officials, block the check off of union dues, repeal the union shop system, stop allowing trade union members to participate in union activities (general meeting, representative meeting, central committee, election management committee, audit committee, etc.) and stop acknowledging paid trade union education. In addition, the management said it would stop paying management expenses and electric charges of the trade union’s office. The union reiterated its prior demands but the management refused.
6. 491. In accordance with section 32(3) of the TULRAA, the collective agreement became ineffective on 6 May 2010 (six months after unilateral termination). That day the management ordered full-time union officials to return to their original positions and announced that those refusing to return to work would be regarded as absent without permission and be disciplined. Thus, members of the executive committee spent annual and monthly leaves to hold two rounds of working-level talks in good faith, which was an attempt to reach an agreement by labour and management autonomously. However, the management neglected negotiation under the pretext of government guidelines and pressure from “higher positions”. As such, the trade union filed for mediation to the NLRC on 17 May 2010. However, the management refused to accept such mediation so that the union decided to go on a no-time limit strike by designated trade union officials on 24 May.
7. 492. On 25 May, the management blocked the check-off, stopped paying trade union office management expenses, communication expenses and electric charges on behalf of the trade union as required by the collective agreement, and notified that it would terminate contracts for two telephone lines and internet access service provided to the office from 31 May. Such actions on the part of the management closed communication channels with the union.

II. Government directives to restrict labour rights of public sector workers

1. 493. The Act on the Management of Public Institutions of 2007 establishes that 286 public institutions are now under the management and supervision of the Government (the Ministry of Strategy and Finance, hereafter MOSF). The main channels, through which the Government controls public institutions, include “Management Directives” and “Management Evaluation”, issued and conducted by MOSF, as well as regular and timely inspections by the BAI.

(1) Government directives

1. 494. According to the Public Institutions Act, the Ministry is responsible for establishing guidelines for the administration of public institutions (Management Directives) after deliberation and resolution by the Committee for Management of Public Institutions (Management Committee). The Management Directives cover matters concerning the administration of organization, the prescribed number of staff, management of human resources, budget, fund administration and other matters.
2. 495. Around November every year, the MOSF issues budget compilation directives for public corporations and quasi-governmental institutions to refer to in planning their budgets for the following year, after the deliberation and resolution of the Management Committee. At the beginning of the year, the ministry also releases budget execution directives for the corporations and institutions in consultation with the committee.
3. 496. The Management Committee is officially responsible for the deliberation and resolution of the management and administration of public institutions. However, considering the structure and the actual operation of the committee, its main role is to rubber-stamp positions of the MOSF.
4. 497. The Act stipulates that “eleven or less persons commissioned by the President on the recommendation of the Minister of Strategy and Finance from among people from various fields including law, economy, press, academia, labour, etc. with good knowledge and experience in the area of management and business administration of public institutions and also good reputation for impartiality” could join the committee. However, those with labour background such as trade unionists have been excluded from the committee.
5. 498. The Directives for the advancement of public institutions, which could significantly affect the working conditions of public sector employees, had been rarely discussed by the committee until 11 August 2008, when they were announced. The Management Committee’s Subcommittee for the Advancement of Public Corporations (Advancement Committee), of which the members are designated by the chair of the Committee (MOSF Minister), once discussed this issue.

(i) Budget compilation directives

1. 499. Around November, the MOSF issued budget compilation directives for public corporations and quasi-governmental institutions after the deliberation and resolution of the Management Committee. The directives contained basic directions in devising budget plan of the following year and guidelines for major items in the plan. These major items included personnel expenses, general expenses, working expenses, fund and other budget items, and measures concerning non-regular workers in the public sector.
2. 500. The 2010 budget compilation directives were announced on 16 November 2009. The preamble reads, “Public organizations must restrain personnel and other expenses to share the national economic hardship, and improve management efficiency by curbing excess employee benefits.” As a result, the budget for personnel expenses was frozen in 2010, and even some of public financial institutions had to reduce wages by five per cent. Many of employee benefits were reduced or abolished under the pretext of “reforming the benefits system to a rational level”.
3. 501. Wage negotiations in public institutions are restricted within these directives. In this situation, wage negotiations could never change the terms. Even if labour and management agreed to set wages at a higher level than the directives stipulated, BAI inspection and management evaluation by the Government will apply disciplinary measures to such an organization. The organization will also see their budget cut by the Government.
4. 502. For example, the BAI audit report of Korea Railroad Corporation (27 August 2009) said that the company disobeyed the 2007 budget compilation directives in bonus payment, and requested the organization to take the bonuses back. The management responded to the request by reducing wages for employees. In 2009, the basic salary was cut 50 per cent, which amounts to 9 per cent of total annual salary of the year or KRW32.8 billion in totals and KRW990,000 per person on average.
5. 503. The labour and management of the Korea Airports Corporation failed to come to an agreement in 2007 wage negotiations. Its trade union decided to go on strike, and the NLRC began to arbitrate the dispute. The Commission offered a mediation proposal at a level exceeding the government’s wage guidelines at that time (3 per cent). Both the management and labour accepted it. However, the Government gave the corporation disadvantages in the 2008 management evaluation. Thus, in the following year, workers ended up being forced to accept a wage cut to offset the surplus in 2007 (6.8 per cent). It is an ironic situation where the Government demands to correct wage and CBAs, concluded by the arbitration of the Commission, the Government’s highest organization in mediating labour relations.
6. 504. As of 1 October 2010, no public institution with KPSU affiliates has been able to conclude a wage agreement at an increased rate that goes beyond the personnel expenses increase limit set by the directives. Thus, the directives actually serve as a wage limit, which binds the whole processes of wage and collective bargaining in public organizations, making labour–management wage negotiations at such institutions meaningless.

(ii) Budget execution directives

1. 505. Budget execution directives are also considered as management guidelines stipulated in the Public Institutions Act. The 2010 directives were deliberated and resolved by the Management Committee on 29 January 2010. The purpose of these general directives is to “offer detailed guidelines for efficient budget execution to public institutions”.
2. 506. These directives prescribe principles and standards in the implementation of major budget items such as personnel and general expenses. For example, as for the management evaluation-linked compensation system, which falls into the category of personnel expenses, the 2010 directives describe the number of evaluation result brackets, compensation differentials and the portion of each bracket. Of course, trade unions are completely excluded from the process of setting these criteria.
3. 507. In addition, the 2010 directives state, “Public institutions of which the structure or workforce has been changed due to merger, function adjustment, and streamlining must implement budget policies in consultation with competent agencies and the Minister of Strategy and Finance,” implying that the management of public corporations must consult with MOSF over a broad range of issues that severely affect working conditions.
4. 508. As for employee benefits, the Government guidelines provide standards even for the payment of employee welfare fund. Moreover, according to the directives, “Any form of leave other than annual paid leave guaranteed by the Labour Standard Act must be prohibited, and unused leave cannot be compensated with money.”

(iii) Government plan for the advancement of public institutions

1. 509. The Government announced that it would reform public corporations under the name of the advancement of public corporations in July 2008. The first set of detailed reform measures was out on 11 August 2008, and the last and sixth on 31 March 2009. Accordingly, 24 organizations were either to be privatized or to sell stakes, and 41 government agencies would be integrated into 16 organizations, while some agencies would undergo functional adjustment. The Government also cut budget and workforces for other agencies that were not subject to this restructuring programme. As a result, 129 organizations shed off around 22,000 workers, or 12.7 per cent of their total workforces combined.
2. 510. After the sixth round of reform measures, a second-stage plan was revealed: “Breaking the three major bubbles”, “Advancement of labour relations”, and “Provision of first-tier public services”. The three bubbles referred to public institutions’ wage levels, positions and business structure that are “overblown” given their actual productivity, in order to tackle lax management of public corporations, which have allegedly been the source of public censure about cushy jobs at public organizations (the so-called “god-given jobs”). The plan for the advancement of labour relations was designed to turn labour–management relations in the public sector into an exemplary case to the whole society by putting their industrial relations on a more “reasonable” footing through Government assessment. Afterwards, in the following management directives of public organizations, the share of criteria for the “advancement” or “rationalization” of labour relations was expanded.
3. 511. All of these programmes were expected to affect overall working conditions of public sector employees significantly, but the Government had not consulted trade unions at all and there have been no ways to reflect opinions of worker representatives in the process. The Government outlawed collective actions of trade unions in protest against the deterioration of working conditions that would be caused by the advancement of public institutions and wielded repressive measures, as in the case of KORAIL.
4. 512. In April 2009, the Labour Ministry analysed collective agreements of public institutions, and proposed “improvement programmes”. The analysis was focused on “basic collective agreement terms for rational labour relations”, and these terms were reorganized into 21 items in four sections (trade union membership and protection of trade union activities, restrictions on trade union intervention in personnel and management rights, wages and other working conditions, and collective bargaining and labour disputes). Each item was evaluated by a scale of five (from “very poor” to “very rational”). In general, the Labour Ministry’s analysis sees clauses favourable to the employer as rational, while those that guarantee trade union activities and rights are considered irrational. For example, the analysis construes a clause that requires the management to acquire trade union consent or consultation with regard to personnel changes of union officials as infringing the employer’s personnel right. Furthermore, trade unions’ participation in management activities (i.e. union officials attending managerial meetings) was presented as an irrational case, while employers’ attendance at trade union representative meetings and setting forth their views was presented as an exemplary case. The analysis also describes an employment security committee that comprises equal number of labour and management members as an irrational practice in that it infringes the employer’s personnel and management rights, even though such committee is supposed to deliberate the change of employment status of trade union members. The Labour Ministry launched the analysis in order to rectify “irrational collective agreement terms” of public corporations and quasi governmental organizations, and proposed that criteria of the analysis be used in evaluating management performance of public institutions.
5. 513. In addition, the MOSF had required government agencies to make a monthly report about the progress of reforming collective agreements at public organizations under their auspices with regard to the advancement of labour relations, even asking them for a table comparing states before and after the revision with regard to the four sections (personnel policy, management rights, trade union activities, employee benefits, collective bargaining and industrial action). Moreover, the Government required the agencies to list revisions of so called poisonous clauses encroaching personnel and management rights in their collective agreements.
6. 514. The Labour Ministry also analysed collective agreements of government-invested research institutions under the auspices of the Prime Minister’s Office. In April 2009, the Ministry issued its report including measures for improvement. Out of 23 institutions, the Ministry scrutinized collective agreements of 18 institutions where trade unions are organized. The report graded these institutions into five ranks. The Prime Minister’s Office convened a meeting of heads of such organizations, showed the results, and ordered them to revise “irrational” collective agreement provisions favourable to trade unions. After the meeting, the Korea Labour Institute and Korea Research Institute for Vocational Education and Training unilaterally terminated collective agreements, and the Korea Maritime Institute cancelled the agreement, which had not expired at that time.
7. 515. The public institution advancement drive was focused on “advancing” labour relations, which is actually the weakening of trade unions. This is shown by the Government’s anti trade union remarks. The Government emphasized the importance of forming new labour relations and that as public institutions were governmental organizations, not private ones, even their trade union members were not allowed to be against government policies, and if they were opposed to the government’s policy direction, their managers must not tolerate such irresponsible attitude. The Government publicly condemned trade unions of public institutions that were opposed to the public institution advancement drive stating that “Public officers who take to the street and put anti-government bills on walls are not entitled to perform their duties.” After the KRWU strike was quelled, KORAIL was chosen as one of the exemplary institutions for the public institution advancement project.
8. 516. Lastly, the complainant provides extensive information on the progress and details of the plan for advancement of public institutions by period. In particular, the complainant signals that the second-stage advancement plan (May–November 2009) aimed at restructuring public institutions from being free from, inter alia, bankruptcy, low productivity, militant trade unions, and lax discipline. The related projects included the scrutiny of labour relations by BAI which will adopt a “meet standard or fail” scheme in managing industrial relations, make requests for management dismissal in case of finding lax management cases and conduct preliminary inspection of labour relations.
9. 517. Concerning the ‘advancement of labour relations’ aspect of the second-stage advancement plan, the complainant indicates that the Government plans: (i) to implement a ‘minimum standard’ in labour relations in management performance evaluation; (ii) to include the “advancement of labour relations” category in the management plan implementation assessment for organization heads; public institutions should begin to review wage and leave systems, employee benefits, and trade union activities (trade union support, full-time trade union officials, participation in management process, intervention in restructuring); and (iii) to deteriorate labour relations in public institutions under the name of advancement of labour relations prior to changes scheduled to happen in 2010 (ban on putting full-time trade union officials on company payroll).

(2) Management performance evaluation of public institutions

1. 518. Management performance evaluation for public institutions is a tool to control public agencies that is used the most frequently. Assessment criteria are set at year-end. Every March or April, public organizations receive their evaluation results for the management performance of the previous year in accordance with the Public Institutions Act. The reports for the management performance and plan implementation of organizations and their heads are submitted to a group assigned for the assessment (the Assessment Committee). The whole assessment process is finished by June 20 after the deliberation and resolution of the Management Committee. Incentives and penalties are given to public institutions depending on the results, and budget allocation is affected. Organization heads with poor results could be dismissed.
2. 519. The 2010 Assessment Committee for the evaluation of 2009 performance consisted of 55 members for organization head assessment and 130 for organization assessment. The 2005 Committee included a few members with labour background when the Public Institutions Act was not established yet, but such figures have been completely excluded since the Act entered into force. Evaluation criteria cover sound labour–management relations, and the portion of such criteria accounts for more than 20 per cent in the assessment of organization heads. However, neither experts in industrial relations nor figures with labour background could join the Committee. No explanation has been provided on what criteria these non-experts would use to assess labour relations fairly.
3. 520. Evaluation criteria for the assessment of public organizations are described in the Handbook for Management Performance Evaluation of Public Institutions and Quasi governmental Institutions, which is issued at the end of the year prior to the evaluation period. The 2009 Handbook has three categories of leadership/strategy, management system and management performance, and their ratios of points are 18/32/50 and 18/37/45 for public institutions and quasi-governmental institutions, respectively. The Leadership/strategy category is divided into leadership and major action plans, while the management system category into major business activities and management efficiency. The 17-point management efficiency entry includes organization and personnel resource management, compensation management, rational labour relations, performance management system, public institution advancement and organizational streamlining. The management performance category consists of three subcategories: major business achievements, customer satisfaction and streamlining outcomes.
4. 521. As regards criteria for organization and leadership assessment with regard to labour relations, the complainant refers to the Category “Advancement of public institutions”/Index “Advancement of labour relations”/with the related assessment category “Rational labour relations”, which is determined by evaluating whether labour relations management and labour–management cooperation are legal and rational, whether there is appropriate communication between labour and management to make consensus, whether appropriate efforts are being made to increase labour relations management capabilities, and whether collective agreement terms are rational and there are efforts to improve them.
5. 522. Criteria for the assessment of organization heads are also contained in the directive regarding “Criteria for Plan Implementation Assessment”, which is issued after the deliberation and resolution of the Management Committee. According to the directive, each organization head submits a management plan to the Government at the beginning of the year, and presents a plan implementation report to receive assessment after the evaluation year ends. The 2009 directive raised points assigned to the labour relations category to 20 points, and the management efficiency category was given another 20 points. This newly established entry covers issues that had been handled separately last year, which severely affect working conditions (including compensation adjustment, workforce reduction, merger and functional adjustment, privatization and youth internship programmes).
6. 523. With specific regard to the “advancement of labour relations” aspect in the 2009 organization head assessment, the complainant indicates in particular that:
   • (i) under the category “Are labour–management relations rational and legal?”:
     • – criteria to evaluate efforts to form rational labour relations include the correction of irrational labour relations, efforts to rationalize personnel and organizational management, protecting management rights in case of labour disputes, efforts and achievements to stabilize labour relations after disputes, preparations for collective bargaining on the part of employer and efforts to conclude collective agreements in negotiations (good faith negotiations and others); and
     • – criteria to evaluate efforts for legal management of labour relations include adherence to principles in response to undue demands from the trade union, including non-negotiable items in collective agreements, strict response to illegal labour disputes and proper follow-up measures, unfair labour practices on the part of employer, maintaining previous agreement terms in undue ways (special employment rules and labour–management accords) and secret agreements;
   • (ii) under the category “Is there appropriate communication between labour and management to make consensus?”:
     • – criteria to evaluate the organization head’s initiative for communication include on-the-spot visits and opinion collection, direct communication channel between labour and management to solve pending issues and its results and initiatives for labour–management cooperation and dialogue;
     • – criteria to evaluate efforts to build individual labour–management communication channels include building communication channels with individual trade union members, efforts to collect opinions over major issues and surveys over major action plans; and
     • – criteria to evaluate efforts to build collective labour–management communication channels include encouraging and supporting trade unions to have positive attitudes towards enterprise activities;
   • (iii) under the category “Are collective agreement terms rational and are there efforts to improve the terms?”:
     • – criteria to evaluate the appropriateness of trade union operation and trade union support include the eligibility for trade union membership (positions eligible to join trade union, written standard for non-eligible workers, approval for dismissed workers joining trade union, etc.), trade union activities during work hours (approval process, scope and frequency of approved activities, etc.), approval for trade union education during work hours (objects, type and duration of education, etc.), full-time trade union officials (the number of trade union members and full-time officials, whether to allow officials to work for upper trade unions, approval for additional officials, treatment of full-time officials, etc.), personnel management of trade union officials (consultation with trade union, etc.), equipment and facilities for trade union operation (list of items provided, administrative process, support of maintenance costs/ expenses of trade union events/office workers, etc.) and provision of information to trade union and information level (provision of personal information, right to reject, request for secret protection, etc.);
     • – criteria to evaluate the trade union’s intervention in personnel and management rights include operation of organization (consultation with trade union over reorganization); employment and personnel transfer (ban on special appointment or consultation with trade union, participation of trade union officials in job interviews, consent from trade union over standard set for personnel transfer, etc.); promotion, evaluation, rewards (participation of trade union in promotion review committee, personnel assessment, or in recommending recipients of rewards, etc.); reprimand (restriction on management’s exercise of right to discipline—participation of trade union in disciplinary committee, appropriateness of the scope of relief measures in case of unfair discipline, restriction on dismissal of trade union members who are sentenced to be guilty due to trade union activities, etc.); and restriction on management rights (consultation with a trade union over transfer of worksites, overseas investment and others); and
     • – criteria to evaluate the working conditions (wages, retirement, leave etc.) and the appropriateness of protecting industrial actions include appropriateness of wages, retirement and leave, protection and liability of industrial actions and follow-up measures of industrial actions (including “no-work, no-pay” principle, and reckless reinstatement of fired workers).

(3) Management performance evaluation and labour relations

1. 524. The “Sound Labour Relations” criterion clearly shows that the management performance assessment is hostile to trade unions. The 2008 Common Evaluation Criteria for Public Corporations and Quasi-government Organizations explains the “Sound Labour Relations” criterion. The purpose of the criterion is to “appraise efforts for the advancement of labour relations”, and there are six subcategories with several checklists. For example, the checklist of the “Eligibility for Trade Union Membership” subcategory includes umbrella organization, multiple trade unions, membership eligibility, the portion of union members and union fee check-offs. The “Appropriateness of the Number of Full-time Trade Union Officials” entry states, “to determine whether the number of full-time trade union officials and its portion to the entire union membership are appropriate”. To evaluate umbrella union, membership eligibility and organization rates reveals the hidden intention of the Government to intervene in trade union activities. Some entries in the lists even see certain collective agreement terms problematic, e.g. in the “Collective Agreement and Management Rights” category, a statement reads, “This is to analyse how much organization flexibility and management rights are compromised by collective agreements.”
2. 525. In the “Advancement of Labour Relations” and “Sound Labour Relations” categories, the Assessment Committee does not hide its intention to turn the current collective labour relations into individual company-based structure. Suggestions of the Assessment Committee fundamentally deny autonomous labour relations in individual companies. The complainant signals some of its findings, e.g. some organizations lost organizational flexibility due to collective labour relations; fringe benefits were found to be excessive in some cases; certain collective agreement clauses possibly violated management rights; most of the subject organizations did not follow government directives in relation to the number of full-time trade union officials; some institutions were identified to have problems to implement rational, mutually beneficial labour relations; specific collective agreement terms allowing trade unions to intervene in the management or personnel policy of the institutions remained to be fixed; the increase of wages beyond government guidelines through collective bargaining needed to be prohibited; some trade unions were found to have more full-time trade union officials than their organizational needs and to be given excess support from their employers; etc.
3. 526. The performance result report insisted trade unions escape from the influence of an umbrella organization in order to destroy collective labour relations. For example, the report states that it is essential for trade unions to discuss pending issues with open mindset, not fettered by the opinion of an upper trade union. It is also argued that the Government needed to control these institutions through strict directives. For example, the report states that the following meaningful changes were found: (i) wage negotiation has disappeared from the collective bargaining table; the occasion and duration of wage negotiations have been reduced because there is little room for change by collective bargaining, as the wage increase rate cannot exceed the limit set by government directives; and (ii) labour relations have generally been improved; however, this progress has resulted from the compromised effectiveness of taking collective labour relations due to strict government guidelines rather than from improved labour relations management skills on the part of employers. In this sense, the advancement of labour relations mentioned in this report actually refers to the debilitation of trade unions.
4. 527. Lastly, the complainant provides examples of problematic sections in the management performance evaluation report, which:
   • (i) depict legitimate trade union activities concerning public interests as militant trade unionism and undue demands, in particular:
     • – KORAIL: “The management refused undue demands from the trade union and adhered to principles. It is an exemplary case for the KORAIL management to compel the trade union to halt a strike by creating public opinion critical to the labour dispute through meticulous preparation and proper public relations activities.” “The management strove enough to redress problems identified by the government management performance evaluation of the previous year: protect personnel and management rights, control illegal labour disputes of the trade union, and reduce full-time trade union officials by expanding dialog and negotiation through increased number of labour–management council meetings ...” “… the management and labour are still in a stalemate over financial independence of the trade union, peak salary system and retirement pensions. In addition, even though the management reduced ten full-time trade union officials through collective bargaining and joint council, the number of union officials currently stands at 55, still higher than the proper number of 21 considering the size of the trade union.”
     • – KOGAS: “The management discarded its conventional compromising attitude in labour relations management to adhere to strict principles based on law and order, and the focus of labour relations spread to local workplaces from headquarters. The management is seeking to communicate with employees directly.” “Given the current situation, the management had no option but to adhere to principles and rules, as its trade union is exceptionally militant compared to other trade unions in public organization. For example, the management strictly applied the “no-work, no-pay” principle to those who were engaged in trade union activities during work hours. In case of illegal activities of the trade union, including interrupting general shareholders’ meeting and blocking the legitimately appointed president from entering office, the corporation took consistent measures based on principles: filing a lawsuit for damages, applying for provisional disposition prohibiting the trade union from obstructing business, filing a criminal complaint and reprimanding those concerned.”
   • (ii) require employers to respond to trade union activities relating to participation in KCTU and industrial unions
     • – Incheon International Airport Corporation: “… as the trade union changed its umbrella union, it is expected that the policy direction of the organization would change radically. The management must take these factors into consideration in order to keep the effectiveness of the master plan for new labour relations.”
     • – Korea Electrical Safety Corporation: “It is judged that a new collective agreement must be concluded as soon as possible, which was delayed in the process that new director was appointed to the organization and an industrial union (the KPSU) denied an upper trade union’s demand for industry-wide bargaining, agreeing and agreed on an individual bargaining principle, so that a culture of mutually beneficial labour–management cooperation can be established.”
   • (iii) require or state joint declaration on labour–management cooperation or on advancement of labour relations:
     • – National Health Insurance Corporation: “… events which could foster labour–management cooperation and trust such as a ‘declaration of labour–management cooperation’ or ‘joint labour–management declaration’ are not being organized.”
     • – Sports Promotion Foundation: “In a ‘Declaration of Labour–management Accord’ issued on 12 August, the Foundation, the trade union, and the General Union stated their intentions to contribute to improvement of management efficiency through labour–management accord and cooperation, finding solutions to systemic improvements through labour–management consultations, and establishment of an effective management system through a joint labour- management council.”
   • (iv) stress conclusion of collective bargaining without negotiation or granting of negotiation authority to the management, in particular:
     • – Sports Promotion Foundation: “No labour disputes have occurred for the last 19 years. The 2008 collective agreement and wage agreement were concluded without bargaining, and the duration of wage bargaining was also reduced compared to the previous year.”
     • – Korea District Heating Corporation: “As it had the previous year, in 2008 the corporation concluded the wage agreement without bargaining in accordance with the range stipulated by the Government guidelines on wages. This reflects cooperative labour–management relations.”
   • (v) require specific collective agreement clauses regarding labour relations advancement or increasing management efficiency, or assess them as positive achievements:
     • – Korea Cadastral Survey Corporation: “… problematic provisions were identified in the collective agreement: ... Consultations with the trade union in case of adopting annualized salary system; … Ban on lowering wages (management cannot lower … wages for transfer of trade union members, change of wage payment system (annualized salary, etc.), working hour reduction, lowered productivity, low management performance or any other reason without acquiring consent from the trade union or in case of a justifiable reason). These provisions possibly place restrictions on advancing labour relations and streamlining organization … It is judged that labour and management review the appropriateness of these clauses, and provide reasonable solutions.”
     • – Korean National Pension Service: “The inspection conducted in the previous year identified collective agreement provisions that violate management rights, thus lowering the flexibility of the organization (employment security … ). However, these clauses remain to be amended this year, and the corporation does not comply with government guidelines about full-time trade union officials. The contents of the collective agreement need to be improved and the collective bargaining period should be adjusted ... .”
     • – Sports Promotion Foundation: “The management deleted three collective agreement clauses violating management and personnel rights and showed efforts to abide by government directives.”
5. In conclusion, the 2008 assessment for organization heads, which was conducted in 2009, focused on common tasks such as advancement and increasing management efficiency. Sixteen out of the 19 “good-graded” institutions received good results in the categories workforce reduction, compensation adjustment and labour relations, and eight out of 11 “poor-graded” organizations received bad results in these categories. As such, the Government leveraged the assessment as a tool to enforce workforce reduction, wage reduction and deterioration of labour relations in all public institutions. Moreover, in the 2010 assessment, half of the evaluation was about labour relations advancement. As such, the Ministry of Strategy and Finance took advantage of the assessment as an instrument to intervene unfairly in labour–management relations in public organizations, which must be autonomously determined by labour and management.

(3) Inspection of the Board of Audit and Inspection (BAI)

1. 528. The BAI conducts regular inspection on public institutions at least once in every three years. The inspection reviews personnel and budget management of organizations subject to inspection. The BAI takes various measures depending on inspection results, which include requests for correction or improvement, recommendations on personnel and budget matters and accusations to investigation authorities. Such follow-up measures serve as one of the most powerful tools of the Government to control public institutions. Moreover, the administration took advantage of BAI inspection on public organizations as a preliminary attempt to merge organizations and reduce workforce in public enterprises and quasi government organizations as well as to lay the logical groundwork for public-sector restructure.

(i) 2008 inspection for public institution advancement

1. 529. In 2008, the BAI launched massive rounds of audits on public enterprises and quasi governmental organizations under the name of “increasing management efficiency of public institutions”. The audit agency concluded that some of them needed to be privatized, cutback organization and functions, delisted and integrated into the parent enterprise, or liquidated. Embarking on the inspection on local public corporations, the BAI stated that it was aimed at spreading the central Government’s public institution advancement policy throughout local governments, revealing that this move was meant to lay the groundwork for the central Government to merge, privatize and streamline local public corporations.
2. 530. All public institutions except those who had received audits in the second half of 2007 were subject to the 2008 BAI inspection rounds, an unprecedented level in terms of range and scope. During the process, auditors urged inspected organizations to take voluntary restructuring measures.
3. 531. The BAI launched such an inspection drive in order to control public institutions. Out of more than 300 entries in its checklist, about 100 items concern personnel management and about 100 are related to labour relations, while 70–80 are about personnel systems, directly influencing trade union activities. Auditors used the checklist to investigate trade union activities and the membership eligibility, causing the termination of collective agreements or halting collective bargaining in progress.

(ii) 2009 monitoring of the implementation of the Public Institution Advancement Plan

1. 532. The audit agency announced the Inspection Plan for the first half of 2009 on 4 February 2009. According to the plan, the newly established Public Institution Inspection Department would be in charge of monitoring the progress of the Public Institution Advancement policy. The plan was focused on “scrutinizing lax management to increase management performance of public institutions” and “monitoring the implementation of the Advancement Plan” as well as “inspecting organizations over undue intervention in management activities by trade unions, running excess number of full-time trade union officials and secret agreements between labour and management”. This means that the BAI points out trade unions as a main obstacle to the reform of public institutions. A document named “Direction of Future Inspections for the Advancement of Local Public Corporations” clearly reveals such a point of view. According to the document, the agency will apply the same principles that were used to inspect central public institutions to local public corporations in order to ensure principle-based management at local organizations, which adheres to rules and laws. However, given that the BAI relates all of the causes for lax management in public corporations to trade unions, such “rules and laws” actually mean the weakening of trade unions that are a possible obstacle to so-called “reform”.
2. 533. The complainants state that the BAI identifies as causes for lax management: (i) lack of morality on the part of management (abuse of personnel rights such as wrongful employment, lack of specialty, overlooking illegal activities by trade unions, etc.), recommending and requesting to replace or dismiss the lazy management; (ii) illegal labour–management practices (violation of management rights, illegal wage increase through secret agreements, etc.) offering help to achieve legal and normal labour and management relations; and (iii) overlooking of local governments (retired civil servants descending on management posts riding so-called “golden parachutes”, overlong management’s slackened discipline, overlooking illegal labour relations, etc.), recommending to identify and reprimand those who were responsible for monitoring and supervising organizations in question.

(iii) 2009 audit for the Korea Railroad Corporation (KORAIL)

1. 534. The abuse of authority and illegal audit practices of the BAI are clearly identified in its audit report for KORAIL, which was out on 27 August 2009. The BAI argued that the company paid excess bonuses to employees in violation of the budget directives for government-invested organizations in 2007. However, at the outset, KORAIL workers did not demand special bonuses in 2007. In the 2007 collective bargaining, the trade union just requested compensation for their lower wages compared with other public corporation workers. Payment of such compensation had already been agreed upon between the management and labour as well as between the Government and labour in 2005 when Korean National Railroad was turned into the Korea Railroad Corporation. However, in 2007, the Ministry unilaterally notified the trade union that it would not carry out the agreement under the pretext of government directives for the payment of performance-linked remuneration. After the 2007 collective bargaining was completed, management decided to pay special bonuses worth 50 per cent of the original compensation. The BAI recognized such circumstances during the 2007 management performance evaluation of the corporation, which was conducted in 2008, and published evaluation results. However, two years later, the agency suddenly requested to correct such measures which resulted in the reduction of workers’ basic salary by 50 per cent in 2009. The complainant concludes that in this inspection round, the BAI considered autonomous labour–management relations as violating government guidelines and directives.

(iv) 2010 special audit for the progress of the Public Institution Advancement Plan

1. 535. In July 2010, the BAI announced it would carry out on-the-spot inspections on the progress made towards the public institution advancement policies. A total of 132 public institutions were the target of these inspections, which evaluated “advancement plans and progress” and “state of union management and support”. The BAI announced the results of these inspections on 20 August 2010. The inspections covered five areas: corporate governance, progress on the “Advancement Plan”; advancement of labour relations; personnel expenses; and benefits. Thus, they covered the entirety of labour relations and working conditions, including the contents of CBAs, labour’s participation in deciding working conditions, and even the rights of workers to join trade unions.
2. 536. The BAI saw it as problematic that department chiefs, who it deems to fall into the category of employer, have joined the trade union. The audit agency bases its argument about the eligibility for trade union membership on article 2.2 of the TULRAA, which defines the term “employer” as a person who acts on behalf of a business owner with regard to matters concerning workers in the business. It argues that the department chiefs are “bestowed authority and responsibility from a business owner for determining working conditions of employees”. The agency also cites article 2.4 of TULRAA, which states, “an organization shall not be regarded as a trade union when an employer or other persons who always acts in the interest of the employer are allowed to join it”, to support its argument. The agency presented a company that had deprived six third-grade inspection department employees of trade union membership by revising the collective agreement as an exemplary case. However, the provisions in TULRAA seek to ensure the independence of a trade union, and court rulings support this point, stating that, even though a trade union allows those who act on behalf of an employer to join the trade union and, thus, some members of the trade union shall not be regarded as entitled members of the trade union, the trade union does not immediately lose its status as a trade union defined by the Act (TULRAA), but loses the status only if its independence has actually been damaged or could be damaged by the representatives of employers’ interests. However, the BAI argues that reducing the scope of eligibility to trade union membership and restricting freedom of association is to follow government directives and to advance public institutions.
3. 537. The BAI argues that holiday systems and employee benefits guaranteed by the collective agreement, which are not prescribed by the Labour Standard Act (LSA) or exceed “limits prescribed by the LSA and government directives for public corporations and quasi governmental institutions” are not in conformity with the law. The BAI also demanded KORAIL to correct the practices of “paying overtime wages and compensation for unused paid leave in violation of the LSA and MOSF directives”. However, article 3 of the LSA states as follows: “The working conditions prescribed by this Act shall be the minimum standards for employment, and the parties to labour relations shall not lower the working conditions under the pretext of compliance with this Act.” There are no legal grounds that the Government controls working conditions agreed upon by the management and labour of a public institution through a collective agreement in accordance with the TULRAA, even though such working conditions are higher than those prescribed by the LSA.
4. 538. The BAI even encouraged public corporations to terminate collective agreements. After the 2009 Monitoring on the Progress of Public Institution Advancement Policy, the audit agency cited more than ten public corporations as exemplary cases to terminate collective agreements or give trade unions termination notice. The audit report pointed out that some of the institutions, however, just devised an Improvement Plan for Labour Relations but did not take effective measures to enforce it such as collective agreement termination. Thus, to the BAI, effective measures to advance labour relations include the termination of collective agreements by employers. As of 1 September 2010, more than 20 public institution unions have been notified of the termination of collective agreements since 2008, when the public institution advancement policy was launched. All of these unions are affiliated with the KCTU.
5. 539. The unilateral termination of collective agreements and the deterioration of their terms are the new methods to suffocate trade unions. In most public institutions, collective bargaining tables that began from 2008, employers demanded terms in accordance with government guidelines. If their trade unions refused the terms, the employers terminated CBAs unilaterally. Employers then coerced trade unions into agreeing on worse collective agreement terms. They pretext government guidelines, indicated problems in management performance assessment, government checklists and BAI audit recommendations. Most of the worsened terms are related to reducing of trade union membership eligibility, curbing trade union activities, and protecting management and personnel rights of employers.
6. 540. According to the TULRAA, a collective agreement becomes invalid six months after one party gives termination notice to the other. In this case, issues regarding working conditions (the normative part of the collective agreement) are regulated by individual employment contracts. Thus, employers can change employment contract terms depending on negotiations with individual workers, ruling out trade unions. More problematic are institutional issues (the obligatory part of collective agreements), which cover protection of trade union activities and trade union participation in management (attending committees, and obtaining consultation with or consent from the trade union). Once the collective agreement becomes terminated, the trade union loses its tools to check the management and channels through which it sets forth opinions. Then, the management decides issues unilaterally and the trade union becomes nullified.
7. 541. In case of accepting worsened collective agreement terms, results are the same. For the evaluation of collective agreement terms of public institutions, the following four subcategories with 25 points are assessed: trade union membership and protection of trade union activities; restriction on participation of trade unions in personnel management and overall management activities; working conditions such as wages; and collective bargaining and labour disputes. All of them relate to trade union activities. The objective of the regressive revision of collective agreements is the same as that of unilateral termination of collective agreements: debilitating trade unions through curbing and compromising protection for trade union activities and blocking or minimizing union participation in management processes.
8. 542. The participation of public workers in public institutions’ management can shape government policy directly or indirectly. The Government’s move, however, has resulted in the exclusion of public institution trade unions from the process of discussion for public interests. That is why the Government is attacking public institution trade unions. This goes beyond just labour–management issues to the extent that excluding trade unions from participation in management of public institutions leads to preventing citizens from being involved in public decision-making processes. In this sense, it is not just trade unions that are being threatened by the Government’s move, but the democracy of society itself.

III. Denial of recognizing cargo truck drivers as workers and threat to cancel union registration of the Korean Transport Workers’ Union (KTWU)

(1) Recognizing cargo transportation workers as workers

1. 543. Court rulings determine a person as a worker under the Labour Standards Act depending on whether, in substance, a labourer provides labour for wages in a subordinate relationship to an employer, to a business or at a workplace. Further, to determine whether such a subordinate relationship exists, the following factors are considered: whether the contents of the work are determined by the employer, whether the worker is subject to the employer’s concrete and specific direction and control, whether the employer determines the time and place of work, etc. According to these factors, cargo truck drivers are under relatively weak direct and concrete direction and control from the employer. This is because cargo transportation is independently carried out by the driver, and the work takes place outside the premise of the employer. However, these working processes are typical to other kind of jobs whose working processes happen outside workplaces, i.e. salespeople.
2. 544. Given the nature of freight transportation, the employer’s direction and control focus more on the accurate, on-time delivery of the freight than on the process of transportation activity itself. During the transporting labour, truck drivers are bound to the employer’s direction through a fleet schedule. This means that these independent workers cannot decide their work hours, places and duties, as they have no right to choose delivery time and path. In addition, transportation companies have a unilateral authority to cancel a contract. Therefore, independent workers transporting cargoes cannot be seen as self-employed business people. It is not reasonable to deny truck drivers to be workers on the grounds of their ownership of vehicles since the truck is not a means to run an independent business but an inevitable instrument to provide labour under the unique system of the transportation industry.
3. 545. Furthermore, the complainants provide a historical overview of the (non)-recognition as workers of truck drivers with owner–operator contract. In particular, the complainants indicate that in 1994, the Labour Ministry issued an administrative interpretation that recognized truck drivers with owner-operator contracts as workers for the first time. In 2000, the Labour Ministry issued a new administrative interpretation to reverse the previous one, denying transportation workers to be workers. The shift was based on court rulings. In 2003, the Korea Cargo Transport Workers’ Union (KCTWU) staged a general strike and reached an agreement with the Government to accept truck drivers as special employees involved in freight transportation. In 2005, the Government announced to recognize the KCTWU as a representative body of cargo truck owner-operators. In 2009, the Government ordered that the Korea Transport Workers’ Union cancel the membership of special contract workers voluntarily stating that giving membership to special contract workers could lead to the rejection of the union registration.
4. 546. The complainants also provide an overview of the relevant court rulings. Generally, the Supreme Court of Korea has constantly maintained that owner–operators are not under the employment relationship with the user of owner–operators. According to its rulings, owner–operators who have business registration and pay corporate income tax, do business with their trucks and do not receive specific instructions other than the initial assignment of consigners and consignees. Thus, they cannot be seen as employees working for the companies. However, some lower court decisions acknowledged the truck owners as employees based on the following reasons: trucking operation is instructed and monitored by the trucking company; the owner–operator is not allowed to hire a substitute driver to run the vehicle on behalf of him or her; and taking days off without the trucking company’s approval is also not allowed.
5. 547. Thus, the owner-operator is not recognized as a worker. Yet those who receive specific instructions and supervision from the trucking company and are not allowed to have substitute drivers operate their trucks are exceptionally deemed as workers.

(2) Threat to return application for the registration of the KTWU

1. 548. In 2009, the KTWU was required to make voluntary corrections to a speculative situation where some of the KCTWU members are not workers. The Labour Ministry required the union to rectify its membership within 30 days citing that it has authority to reject the unionization application.
2. 549. However, the complainants believe that, firstly, the Labour Ministry has no right to determine the qualification of a trade union after the completion of its establishment. The TULRAA only gives the Labour Ministry authority to review a registration application of union. There is no legal ground enabling the Ministry to examine whether to cancel the registration of an existing union that was once legally established. Secondly, the Labour Ministry cannot issue a corrective order over non-workers participating in a union. While the Ministry can order that a trade union take corrective measures based on article 21 of TULRAA regarding “Correction of Bylaws and Resolutions or Measures”, on the assumption that independent workers cannot acquire membership of a trade union, the Act only enables administrative agencies to order the correction with the “resolution of the Labour Relations Commission”. Thus, the corrective order is not legally valid because it did not go through an appropriate process. Even if the Ministry gained resolution from the NLRC and makes the correction order valid, the trade union could only be fined for violating it but not closed.

B. The Government’s reply

1. 550. In its communication dated 28 October 2011, the Government states that public institutions in Korea exert tremendous influence on the economy as they constitute a significant portion of the national economy executing a huge budget and provide major public services and social infrastructure including energy. As for industrial relations, the union density of public institutions is 59.7 per cent in 2010 corresponding to more than six times that of all sectors which is 9.8 per cent in 2010, thereby having a strong influence on overall industrial relations in Korea.
2. 551. However, public institutions have come under mounting criticism for their continued problems such as inclusion of illegitimate terms in collective agreements, unfair labour- management practices and lax management by employers without a sense of ownership. Recognizing the need for addressing illegitimate elements of industrial relations and establishing a reasonable order for the sake of the public who are the eventual employers of the public institutions, the Government is seeking to advance industrial relations.
3. 552. The Government is of the view that the complaint contains allegations that do not correspond to facts and are thus misleading. Therefore, the Government provides its observations based on facts with regard to the allegations made by the KCTU and the KPTU.

Alleged infringement of basic labour rights of workers in public institutions

1. 553. With respect to the allegation that trade unions were excluded from the Committee for Management of Public Institutions (Management Committee), the Government indicates that the Management Committee is responsible for deliberation and resolution of matters concerning the management of public institutions. Given that public institutions are for public interest, the Management Committee should desirably be comprised of independent experts who represent the interest of the public. The Act on the Management of Public Institutions stipulates that “people with good knowledge and experience in the area of management and business administration of public institutions and also good reputation for impartiality” should be commissioned as the Committee members. Currently, the Committee includes seven appointed members from various fields – one from the legal circles, one from the Government, four from academia and one from civic groups.
2. 554. Concerning the allegation that trade unions were excluded from the Management Performance Evaluation Team for Public Institutions, the Government states that the management performance evaluation for public institutions is a tool to ensure more efficient and responsible management of public institutions by reflecting the management performance in the performance assessment of executive officers and the performance compensation for employees. Given that the evaluation is conducted on the employers and employees of public institutions, it is appropriate to exclude anyone who represents them from the Evaluation Team. In this regard, neither labour nor management is allowed to take part in the Evaluation Team and, the team is currently composed of independent experts such as lawyers and professors in accordance with the relevant law.
3. 555. As regards the allegation that the trade unions’ opinions were not reflected in the decision on working conditions for employees in public institutions, the complainants argue that the MOSF budget directives for public corporations and quasi-governmental institutions cover overall matters concerning wage and collective bargaining of public institutions, however, the trade unions are given no chance to participate in the process of determining major items of the directives such as the ones related to personnel and general expenses. The budget compilation and execution directives prescribe general principles and standards for budget compilation and execution to realize rational business administration and efficient management of public institutions. Considering the fact that public institutions are run on the taxpayers’ money for the purpose of providing public services, these directives set standards on various expenses including the wage increase rate, etc. pursuant to pertinent regulations. The wage increase rate prescribed in the budget compilation directives is to provide guidelines for wage bargaining, not to intervene in the overall wage and collective bargaining affairs of public institutions or to exert forceful control in that regard. Furthermore, the Government collected opinions from trade unions by holding discussions with labour including the Federation of Korean Trade Unions (FKTU) on 3 November and 12 November 2010 in the course of drawing up the “2011 budget compilation directive for public corporations and quasi-governmental institutions”.
4. 556. Furthermore, the complainants assert that there have been no consultations with trade unions or ways to reflect opinions of labour representative at all in the process of the advancement of public institutions. On the contrary, on 17 September 2009 the Government gathered opinions from the Federation of Korean Public Trade Unions (FKPU) on the “performance-based pay standard model” while restructuring the pay system of public institutions. It also attended the KCTU’s conference on management evaluation on 2 November 2010 to take account of their views in reshaping the 2011 Management Evaluation System. In addition, the Government sits with the presidents and leaders of the KCTU and the FKTU, the two largest umbrella unions in Korea, as frequently as necessary to hear their voices in pursuit of the advancement of public institutions.
5. 557. With respect to the alleged attempt to debilitate trade unions by raising issues with the collective agreements between labour and management, the complainants claim that the Government’s advancement plan fundamentally denies the autonomous labour relations of the public institutions and intervenes in activities of the trade union which is by nature an autonomous association, by questioning the terms of the collective agreements produced as a result of negotiations and agreements between labour and management. Public institutions refer to organizations that provide public services within the scope commissioned to them by law, and the Government has the authority to guide public institutions according to relevant laws. It is along that line that the Ministry of Employment and Labour, as a competent government agency, performed consulting and provided opinions to public institutions under its umbrella in the face of a flood of inquiries by employers on the legality of their collective agreements with unions. The Ministry had no intention at all to question the contents of the collective agreements or to force their revision according to the Government’s policy orientation. Basically, the Government’s plan for advancing public institutions respects the autonomy of industrial relations. The management evaluation for public institutions is conducted to a reasonable extent to ensure efficient provision of public services. Indeed, it has nothing to do with intervening in activities of the trade union or denying the very nature of the union.
6. 558. Concerning the allegation that the Government placed pressure through audits and inspections for the advancement of public institutions, the complainants argue that the Government’s 2008 inspections for public institution advancement directly intervened in trade union activities, and that its 2009 monitoring on the implementation of the public institution advancement plan revealed its perception of the trade union as a main obstacle to the public institution reform. The purpose of audits and inspections of public institutions is to stimulate them to secure public interest and efficiency, given that they have little motivation for cost saving as they are granted financial supports and monopoly from the Government. The inspections conducted in July 2008 found cases of unfair practices including bonus payments based on false documentation. Accordingly, competent authorities concerned were notified to come up with measures and rules to prevent recurrence of such cases, which we believe cannot be seen as intervention in union activities. Likewise, in 2009, audits did not raise issues with fair and lawful labour practices or the trade union itself. The complainants claim that, when announcing a special inspection schedule in 2010, the BAI urged heads of public institutions to press trade unions, stressing that it would actively exercise its right to recommend dismissal of the management of public institutions in case of lax management resulting from a lack of morality or illegal labour–management agreements. However, it is only appropriate that public institutions, as government-invested organizations with the role of providing public services, are held responsible by the Government for lax management caused by their management’s lack of morality. Again, it has nothing to do with union activities.
7. 559. Furthermore, the complainants assert that based on the result of inspections in 2010, the Government recommended revision of the collective bargaining on the grounds that it is problematic that department chiefs, who fall into the category of employer, have joined the trade union. What the Government actually did was to recommend that corrections should be made in the case where the trade union includes staff of public institutions who has the authority to decide working conditions, issue orders or perform supervision, thus falling into the category of employer. The complainants argue against the BAI’s opinion that holiday systems and employee benefits prescribed by collective agreements which exceed limits defined by the LSA are inappropriate. However, their argument that holidays and employee benefits can exceed the statutory limits overlooks the unique nature of public institutions which are run on the taxpayers’ money for common good. Public institutions are granted financial support and monopoly from the Government, and thus enjoy a much more stable status than private sector establishments. Nevertheless, their financial fundamentals appear to be unsound with debts of 286 public institutions totalling KRW386 trillion (about US$330 billion) as of 2010. Against the backdrop, the Government saw it necessary to provide opinions to minimize lax management including doling out of hefty employee benefits and compensation excessively beyond the minimum requirements prescribed by the LSA.
8. 560. As regards the alleged Government intervention concerning unilateral termination of collective agreements (including a request for deterioration of terms), the Government states that termination of the collective agreement is intended to prevent the concerned parties from being unfairly bound by the existing collective agreement for a long while and at the same time to facilitate bargaining for a new agreement, in the case that the parties failed to make a new collective agreement past the expiration of the existing one. The relevant law stipulates any party to the agreement – either labour or management – can terminate the collective agreement, which, therefore, is fair to both parties. The complainants allege that the Government’s move to judge the rationality of terms of the collective agreement by its own standard and to rank public institutions in terms of rationality, putting pressure on them, is to deny collective agreements and to incapacitate trade unions. However, the Government has never coerced public institutions to terminate collective agreements or issued rationality rankings to press them. Moreover, the Government believes in the principle that in the matter of making or terminating a collective agreement it is up to labour and management to act with autonomy. The complainants go on to say that the Government is excluding trade unions from participation in management of public institutions, thereby preventing them from being involved in the public policy decision-making process, which is certainly not true. The Government guarantees trade unions’ participation in a wide range of committees that discuss and decide on major national policies. Among them are the Labour Relations Commission, the Minimum Wage Council, the Investigation Committee of the Employment Insurance, and the Investigation Committee of the Industrial Accident Compensation Insurance, to name a few related with the Ministry of Employment and Labour.
9. 561. The Government also provides its observations concerning the alleged Government intervention in collective bargaining of certain public institutions and repression of trade unions.
10. 562. With respect to the KOGAS, the complainants allege that the Government tactically led the management side in the collective bargaining and pressed it to notify the trade union of its withdrawal from the collective agreement. The Government does not exert pressure or intervene in the bargaining process as it sees the collective agreement as an autonomous regulation that is made through autonomous bargaining between labour and management. When it comes to the collective agreement of KOGAS tentatively agreed on 3 May 2010, labour regarded it as a valid agreement whereas management reckoned only part of it as agreed. The Government believes that this difference in perception led to the management’s decision to withdraw from the tentative agreement. Meanwhile, the collective agreement of KOGAS was concluded in a smooth fashion on 17 September 2010 through voluntary efforts of labour and management, and currently there is no pending issue between the parties.
11. 563. Concerning KORAIL, the complainants argue that the Government applied charges of obstruction of business to union members’ lawful passive refusal to work, waging an all-out crackdown on the trade union’s collective actions. The KORAIL union staged strikes six times throughout the year 2009 and the management filed criminal lawsuits against the union leadership on charges of obstruction of business. The Seoul Central District Court upheld the charges and ruled the strikes conducted in November 2009 to be illegitimate. The accused appealed to the Supreme Court where the case is currently pending. In principle, the Government guarantees legal protection for legitimate strikes. During the KORAIL strike in 2009, the Government established and executed a contingency transportation plan including alternative transportations, regardless of the legitimacy of the strike, with a view to minimizing inconvenience to citizens due to possible disruptions of transportation services. Therefore, their allegation of the Government’s repression on the trade union during the strike is not true.
12. 564. As regards the Korea Labour Institute, the complainants claim that the Ministry of Employment and Labour, the Institute’s main client, stopped all orders for research and transferred the ongoing projects to other agencies following the 2009 strike, exercising immoral pressure. However, the selection of researchers for the Ministry’s policy research projects goes through due procedures such that the “Deliberation Committee on Policy Research Projects” including five external members pursuant to the “Rules on Research Projects of the Ministry of Employment and Labour” makes a decision based on objective criteria: (1) research capability; (2) whether submitted proposals meet the purpose of the research; (3) feasibility (practicability) of the proposed research plan; (4) adequacy of research costs, and so forth. Hence, the strike at the Institute and the selection of research agencies have no relation at all, and its allegation of the Ministry’s illegitimate pressure is groundless. In addition, the “employment impact assessment project” that the complainants mention as an ongoing project transferred to another agency is a new project launched in 2011, following a pilot period in 2010. The researcher for this project was selected through an open competitive bidding process. Therefore, it is not true that the Government stopped the ongoing project that the Institute had been carrying out for years. In the case of the labour panel project, it became inevitable to change the researcher out of concern that the discontinued or incomplete statistical survey caused by the Institute’s strike might undermine the value of the research as its outcome is to be used as the basis for employment and labour policies as well as academic studies.
13. 565. Finally, with respect to the denounced denial of recognizing owner drivers of heavy goods vehicle as workers and the alleged threat to cancel union registration of the KTWU, the Government states that the KCTU had previously raised the same issue in the framework of Case No. 2602, and the Committee has adopted recommendations in March 2011. Therefore, the Government refers to its October 2010 observations submitted in the framework of Case No. 2602.

C. The Committee’s conclusions

1. 566. The Committee notes that, in the present case, the complainant organizations allege repression of trade unions and violation of collective bargaining rights in several public institutions and enterprises; the issuance by the Government of a series of directives to curb trade union activities in general; and the refusal to recognize cargo truck drivers as workers and threats to cancel the trade union registration of the KTWU.
2. 567. The Committee notes that the issues raised by the complainant concerning the refusal to recognize cargo truck drivers as workers and the threats to cancel the trade union registration of the KTWU are being addressed in the framework of Case No. 2602 and were previously examined by the Committee in its 363rd Report, approved by the Governing Body in March 2012. The Committee therefore refers to the latest conclusions it has reached in Case No. 2602 [see 363rd Report, paras 454–466] and will thus not address these issues in the present case.
3. 568. As regards the general allegations, the Committee notes that, in the complainants’ view, the right to collective bargaining of trade unions in public institutions is severely damaged to the extent that autonomous labour–management negotiation has become almost impossible. The Committee notes the complainants’ allegation that the Government restricts the right to collective bargaining by adopting various measures, without consulting trade unions beforehand, such as:
   • (i) official directives concerning e.g. personnel expenses, which are issued by the MOSF after deliberation and resolution by the Management Committee; this body no longer includes persons with labour background, to the effect that unions are not consulted at all; within the framework of the Plan for the advancement of public institutions/Category “Advancement of Labour Relations”, the Government analysed collective agreements at public institutions and proposed “improvement programmes” to revise “irrational” collective agreement provisions concerning trade union operation and support, protection of union activities and breadth of union authority so as to restrict the scope/eligibility of trade union membership (e.g. department chiefs, dismissed workers); limit the equipment, facilities and maintenance costs provided for trade union operation; reduce the number of salaried full-time trade union officials in proportion to union membership; limit trade union activities and education during work hours (application of “no-work, no-pay” principle); restrict trade union intervention in management and personnel rights of employers (e.g. through union attendance of managerial meetings, equal number of labour and management members in employment security committee and requirement of union consent or consultation over restructuring, wage reduction or personnel changes of union officials); and prohibit wage increase beyond government guidelines favouring disappearance of wage negotiations;
   • (ii) related management performance evaluation reports and checklists, which equally include the above “Advancement of Labour Relations” category with the corresponding criteria for the evaluation of “rational collective agreement terms” and with criteria for “legal and rational labour–management relations” (e.g. protecting management rights in case of labour disputes; adherence to principles in response to undue demands from unions; strict response to illegal labour disputes in the form of criminal complaint, lawsuit for damages, disciplinary measures etc.; and no undue maintenance of previous agreement terms); neither experts in industrial relations nor with labour background can join the Evaluation Committee; and
   • (iii) BAI audit recommendations following inspections to monitor the implementation of government directives, in particular the Plan for the advancement of public institutions; BAI even encouraged public corporations to terminate collective agreements by citing as exemplary those having recourse to such a measure.
4. 569. The Committee notes that, according to the complainants, as a direct consequence of the above measures, the unilateral termination of collective agreements and the deterioration of their terms became common measures to “improve irrational collective agreements”. In most public institutions where collective bargaining tables began as of 2008, employers demanded CBA terms in accordance with government directives, management performance evaluations reports and BAI audit recommendations. As soon as the trade unions refused the unfavourable terms, the employers terminated the collective agreements unilaterally. Employers then sought to coerce trade unions into agreeing on the deteriorated collective agreement terms, consistent with government instructions, mostly related to reducing trade union membership eligibility, curbing trade union activities, and protecting management and personnel rights of employers. In cases where the relevant trade unions began collective action against the worsening of the collective agreement and working conditions, the Government called the actions illegal as shown in the case of the KRWU strike in 2009 because workers went on a walkout about “non-negotiable issues”.
5. 570. The Committee further notes that the complainants allege that in specific public institutions and enterprises collective bargaining rights were violated and trade unions repressed as follows:
   • (i) In the case of KORAIL, collective bargaining with the KRWU started in July 2008. The employer’s proposal implied the deterioration of 120 out of 170 provisions of the previous collective agreement. After postponing negotiations, neglecting scheduled sessions and ignoring prior tentative agreements, and despite concessions on the part of the KRWU, the company notified the trade union of the unilateral termination of the collective agreement on 24 November 2009. Two days later, the KRWU went on strike. Evidence now shows that the unilateral termination of the agreement by the management was intended to provoke the trade union into going on strike. The administration declared the strike illegal on the charge of obstruction of business (section 314 of the Penal Act) arguing that it constituted an objection to government policies (esp. Plan to advance public institutions), which are not the subject of labour–management negotiation. The court confirmed the illegality of the strike holding that the union shall not exercise its right to strike over issues in the realm of management rights (e.g. workforce reduction, reinstatement, etc.). The trade union waged the strike to tackle expected degradation of working conditions. During the strike, arrest warrants were issued to 15 union officials, and the union’s office was seized for investigation by police. After the strike, 169 union officials were dismissed, over 12,000 union members who participated in the industrial action faced disciplinary measures (suspension, salary reduction, reprimand etc.), a lawsuit was filed against 200 unionists for alleged damages caused by the industrial action (KRW10 billion), and the management exercised pressure on union members in the position of department chiefs to disaffiliate.
   • (ii) In the case of KOGAS, collective bargaining with the Gas Corporation Chapter of the KPSU started in April 2009. Following the breakdown of negotiations and the failure of mediation in August, the union joined, in November 2009, the joint strike of the rail, power plant and gas unions to press for the conclusion of a collective agreement through autonomous labour–management negotiation. The management brought charges against ten union officials, and in October 2010 a prosecutor indicted them on charges of obstruction of business demanding prison sentences of eight to twelve months. As soon as the joint strike commenced, the company sent, on 11 November, notice of unilateral cancellation of the CBA and offered deteriorated collective agreement terms in step with the public institution advancement project. A series of negotiation rounds led to a final accord on 29 March 2010, which provided for the continuation of most parts of the previous CBA, plus heavy concessions by the union. On 31 March, the parties agreed that the new collective agreement would enter into effect on 30 April. However, the management refused to execute the agreement, due to the Government’s firm stance that the management further deteriorate its terms. Moreover, on 11 May 2010, the company notified the union that, as six months had passed since the cancellation of the previous CBA on 11 November 2009, the CBA (including provisions on salaried union officers, union dues check-off, paid union activities during work hours, use of office space, vehicle and other facilities) would lose validity. Accordingly, the management immediately took repressive measures by ordering the return of the ten salaried union officers to company work, prohibiting paid union activities during work hours, stopping check-off of union dues and forcing the return of the union office and supplies (incl. communication facilities). The union filed a suit to verify the validity of the new CBA and applied for an “injunction against obstruction of union activities.” A court granted the injunction confirming the validity of the collective agreement. The company refuses to cease its unfair labour practices pending the lawsuit outcome and proposes further regressive revision of the collective agreement.
   • (iii) In the case of the National Pension Service, collective bargaining with the Social Solidarity Pension Chapter of the KPSU started in April 2009. The management proposed the detrimental revision of the CBA, which would generally stifle trade union activities. Reaching an agreement between the two sides seemed to be difficult. The working-level representatives from the two parties, which had full responsibility for bargaining eventually reached a provisional agreement on 23 December 2009, but the management rejected it and proposed additional revisions for the worse instead. When the union opposed the implementation of a new annual salary system pushed forward under the pretext of efficiency, the management responded with the unilateral termination of the CBA on 15 March 2010. Negotiations resumed on 3 June 2010 based on the understanding that they would be limited to issues on which the parties had failed to agree upon in 2009. The management ignored the accord demanding the detrimental revision of 90 collective agreement provisions in line with government instructions. In order to protest against the newly proposed provisions, the union began its collective action in July 2010. The management abused disciplinary measures and filed lawsuits against unionists. Six standing union officers were charged with obstruction of business under the Criminal Act. The management has refused to participate in any further negotiation and is waiting for the union to give in, as there is no collective agreement in effect.
   • (iv) In the case of the Korean Labour Institute, the management had approached bargaining with the Korean Union of Public Sector Research and Professional Workers (KUPRP) with lack of sincerity; before beginning a new round of bargaining, the management notified the union of the unilateral termination of the CBA in February 2009. In April 2009, the Institute’s collective agreement was scored the lowest among all collective agreements of public institutions analysed by the Ministry of Labour, key problems referring to lack of provisions on union membership eligibility, excessive protection of union activities, obligatory union consent before reprimand etc. Since the management continued to refuse bargaining proposals, the union went on strike. The management responded by closing the Institute. At the end of the 85-day strike, the Institute’s director resigned and the workers went back to work. The management brought charges of obstruction of business against all participants in the strike (police investigation underway). No real labour–management negotiations followed. Instead, management has put pressure on the union by demanding that the leadership resign, and that the union disaffiliate from KCTU and agree to a collective agreement compliant to government standards. In addition, the Government, the Institute’s main customer, stopped orders for research projects. As of May 2010, staff had their salaries cut by 30 per cent.
   • (v) In the case of the Korean Institute of Construction Technology, a worker who had made a declaration of consciousness against government policy in December 2008 faced disciplinary measures by the management one year later (contrary to initial promises). When the Korean Institute of Construction Technology Chapter of the KUPRP protested against these measures, the management responded in retaliatory fashion. Retaliation was probably also linked to an ordinary statement of concern made by the union in April 2009 relating to suspicions that the Institute’s director had plagiarized his PhD thesis. In the end, the researcher, a union member, was suspended for three months; the union President was fired; the union’s Vice President was transferred to a remote testing site and subsequently fired after filing a lawsuit against the unfair transfer; and the union’s Secretary-General was suspended for three months. At the same time, in pursuit of the “advancement of public enterprises” policy, the union received, on 2 December 2009, notification of unilateral cancellation of its collective agreement. The management then undertook concentrated efforts to annihilate the union demanding 21 employees of the administrative department to leave the union or their positions, penalizing union members in terms of research projects and launching rumours that no single union member would be promoted. After only six months, the union, which used to have 400 members (90 per cent unionization rate), was reduced to 70 members (17 per cent) due to management pressure.
   • (vi) In the case of the South-east, South, East-west, West and Central Electric Power Companies, collective bargaining with the Korean Power Plant Industry Union (KPPIU) started in July 2008. The two parties agreed upon 144 items with only five provisions left to be agreed. Following the breakdown of negotiations and the failure of mediation in October 2009, the management notified the union, on 4 November 2009, a day after the 13th collective bargaining session, of the unilateral termination of the collective agreement. On 1 April 2010, the management closed down the union offices when the executive committee took office. The union called for the resumption of negotiations but the management ignored previously agreed terms and proposed deteriorated provisions instead. Despite the union’s concessions on the five unsettled terms, the management refused to extend the validity of the current collective agreement. On 6 May, the day the collective agreement became ineffective (six months after termination), the management ordered full-time union officials to return to their original positions. The management continued to neglect negotiations and refused mediation. The union decided on 24 May to go on a no-time-limit strike by designated union officials. One day later, the management blocked union dues check-off, stopped paying office expenses, discontinued communication facilities provided to the union and brought charges against trade union officials for calling the strike.
6. 571. The Committee notes that, according to the Government:
   • (a) public institutions have come under mounting criticism for inclusion of illegitimate terms in collective agreements, unfair labour–management practices and lax management by employers without a sense of ownership; recognizing the need for addressing these issues, the Government is seeking to advance industrial relations;
   • (b) as to the alleged exclusion of trade unions from the Management Committee, this body should desirably comprise independent experts who represent the interest of the public; the Act on the Management of Public Institutions stipulates that “people with good knowledge and experience in the area of management and business administration of public institutions and also good reputation for impartiality” should be commissioned as Committee members; and currently, the Committee includes seven appointed members from various fields – one from the legal circles, one from the Government, four from academia and one from civic groups;
   • (c) as to the alleged exclusion of trade unions from the Management Performance Evaluation Team, since the evaluation is conducted on the employers and employees of public institutions, it is appropriate to exclude anyone who represents them; thus, neither labour nor management is allowed to take part in the team, which is currently composed of independent experts such as lawyers and professors in accordance with the relevant law;
   • (d) as regards the alleged lack of consultations, in the course of drawing up the “2011 budget compilation directive for public corporations and quasi-governmental institutions”, relevant opinions were collected from trade unions by holding discussions with labour including the FKTU on 3 November and 12 November 2010; in the process of the advancement of public institutions, the Government gathered opinions from the FKPU on 17 September 2009 concerning the “performance-based pay standard model” when restructuring the pay system of public institutions, attended the KCTU’s conference on management evaluation on 2 November 2010 to take account of their views in reshaping the 2011 Management Evaluation System and sits with the presidents and leaders of the KCTU and the FKTU as frequently as necessary to hear their voices; the Government also guarantees trade union participation in a wide range of committees that discuss and decide on major national policies (e.g. Labour Relations Commission, Minimum Wage Council, Investigation Committee of the Employment Insurance, Investigation Committee of the Industrial Accident Compensation Insurance, to name a few related with the Ministry of Employment and Labour);
   • (e) considering the fact that public institutions are run on the taxpayers’ money for the purpose of providing public services, MOSF budget compilation and execution directives set general principles and standards on various expenses, in order to realize rational business administration and efficient management of public institutions and corporations; the wage increase rate prescribed in the budget directives is to provide guidelines for wage bargaining, not to intervene in the overall wage and collective bargaining affairs of public institutions or to exert forceful control in that regard;
   • (f) the Government has the authority to guide public institutions according to relevant laws; it is along that line that the Ministry of Employment and Labour, as a competent government agency, performed consulting and provided opinions to public institutions under its umbrella in the face of a flood of inquiries by employers on the legality of their collective agreements with unions, without any intention to question the contents of the collective agreements or to force their revision according to the Government’s policy orientation; basically, the Government’s plan for advancing public institutions respects the autonomy of industrial relations;
   • (g) management evaluation for public institutions is conducted to a reasonable extent to ensure efficient provision of public services; the purpose of audits and inspections of public institutions is to stimulate them to secure public interest and efficiency, given that they have little motivation for cost saving as they are granted financial support from the Government; it is only appropriate that public institutions are held responsible by the Government for lax management; indeed, it has nothing to do with intervening in activities of the trade union or denying the very nature of the union;
   • (h) as regards the alleged recommended revision of collective agreements, the Government recommended that corrections be made in cases where the trade union includes staff of public institutions who has the authority to decide working conditions, issue orders or perform supervision, thus falling into the category of employer; in view of the unique nature of public institutions run on the taxpayers’ money for common good and their unsound finances with debts of 286 public institutions totalling KRW386 trillion (US$330 billion) as of 2010, the Government saw it necessary to provide opinions to minimize lax management and dole out of hefty employee benefits and compensation excessively beyond the minimum requirements prescribed by the LSA;
   • (i) as regards the alleged Government intervention concerning unilateral termination of collective agreements, the termination of the collective agreement is intended to prevent the concerned parties from being unfairly bound by the existing collective agreement for a long while and at the same time to facilitate bargaining for a new agreement, in the case that the parties failed to make a new collective agreement past the expiration of the existing one; the relevant law stipulates that any party to the agreement – either labour or management – can terminate the collective agreement, which, therefore, is fair to both parties; the Government has never coerced public institutions to terminate collective agreements or issued rationality rankings to press them, as it believes in the principle that in the matter of making or terminating a collective agreement it is up to labour and management to act with autonomy;
   • (j) concerning the alleged Government intervention in collective bargaining of certain public institutions and repression of trade unions:
     • – in the case of KOGAS, the Government did not exert pressure or intervene in the autonomous bargaining process between labour and management; the collective agreement of KOGAS tentatively agreed on 3 May 2010, was regarded by labour as a valid agreement whereas management reckoned only part of it as agreed; the Government believes that this difference in perception led to the management’s decision to withdraw from the tentative agreement; meanwhile, the collective agreement was concluded smoothly on 17 September 2010 through voluntary efforts of labour and management, and currently there is no pending issue between the parties;
     • – in the case of KORAIL, the management filed criminal lawsuits against the union leadership on charges of obstruction of business, and the Seoul Central District Court upheld the charges and ruled the November 2009 strikes to be illegitimate; the accused appealed to the Supreme Court where the case is currently pending; in principle, the Government guarantees legal protection for legitimate strikes; during the KORAIL strike, the Government provided for alternative transportation, regardless of the legitimacy of the strike, with a view to minimizing inconvenience to citizens; thus, the allegation of Government repression of the trade union during the strike is not true; and
     • – in the case of the Korea Labour Institute, the selection of research agencies for the Ministry’s policy research projects goes through due procedures based on objective criteria; hence, the strike at the Institute and the selection of research agencies have no relation at all, and the allegation of illegitimate pressure by the Ministry is groundless.
7. 572. As regards the issuance by the Government of budgetary guidelines regarding public institutions so as to ensure the efficient provision of public services, as well as the assessment by the Government of the soundness of their financial situation through performance management evaluation reports, audits or inspections, the Committee wishes to highlight from the outset that it has always been aware that collective bargaining in the public sector called for verification of the available resources in the various public bodies or undertakings, that such resources were dependent on state budgets and that the period of duration of collective agreements in the public sector did not always coincide with the duration of the budgetary laws – a situation which could give rise to difficulties. The Committee has even considered that the financial authorities could formulate in this regard recommendations in line with government economic policy. Noting, however, the conflicting versions of the parties as to the existence of adequate consultations with the trade unions prior to adopting such measures, the Committee recalls that, when doing so, provision should be made for a mechanism which ensures that, in the collective bargaining process in the public sector, both trade union organizations and the employers and their associations are consulted and can express their points of view to the authority responsible for assessing the financial consequences of draft collective agreements. The Committee has always emphasized the value of consulting organizations of employers and workers during the preparation and application of legislation which affects their interests. It has also pointed out the importance it attaches to the effective promotion of consultation and cooperation between public authorities and workers’ organizations in this respect, in accordance with the principles laid down in the Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113), for the purpose of considering jointly matters of mutual concern with a view to arriving, to the fullest possible extent, at agreed solutions [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, paras 1037, 1072 and 1087]. The Committee therefore requests the Government to ensure the observance of the principles enunciated above and to indicate the steps it intends to take in this regard.
8. 573. Furthermore, the Committee understands that, following the expiry of a collective agreement, if the parties fail to agree on a new one, either party can unilaterally terminate the collective agreement, in order not to be bound by it for an excessively long period of time and to facilitate the conclusion of a new collective agreement. The Committee notes the conflicting versions provided by the complainant organizations and the Government as to the degree of government intervention in regard to the unilateral termination of collective agreements by the management of public institutions, since the Government denies the complainants’ allegation that it encouraged, recommended and even coerced public institutions to unilaterally terminate their collective agreements. The Committee notes, however, that the abovementioned Government measures (directives, performance management evaluation reports, audits, etc.) have, at the very least, triggered a de facto wave of unilateral terminations of collective agreements by public institutions. In this regard, the Committee reminds the Government that, pursuant to Article 4 of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), measures should be taken to encourage and promote collective bargaining. The Committee therefore requests the Government to take active measures, following the unilateral termination of the collective agreement by the management of a public institution, to bring the parties back to the bargaining table and promote good-faith negotiations based on mutual confidence and respect aimed at the conclusion of a new collective agreement regulating the terms and conditions of employment. The Committee requests the Government to indicate the steps taken in this regard.
9. 574. With respect to the revision of certain collective agreement provisions qualified as “irrational”, which was recommended by the Government via various directives, performance management evaluation reports and audits, the Committee recalls that a fair and reasonable compromise should be sought between the need to preserve as far as possible the autonomy of the bargaining parties, on the one hand, and measures which must be taken by governments to overcome their budgetary difficulties, on the other [see Digest, op. cit., para. 1035]. Moreover, with respect to the prohibition of a wage increase beyond government instructions and the request to revise employee benefits that go excessively beyond minimum legislative requirements, the Committee wishes to highlight that the principle of autonomy of the parties to collective bargaining is valid as regards public servants covered by Convention No. 151, although the special characteristics of the public service require some flexibility in its application. Thus, in the view of the Committee, legislative provisions which allow Parliament or the competent budgetary authority to set upper and lower limits for wage negotiations or to establish an overall “budgetary package” within which the parties may negotiate monetary or standard-setting clauses (for example: reduction of working hours or other arrangements, varying wage increases according to levels of remuneration, fixing a timetable for readjustment provisions) or those which give the financial authorities the right to participate in collective bargaining alongside the direct employer, are compatible with the Convention, provided they leave a significant role to collective bargaining [see Digest, op. cit., para. 1038]. As to the recommendation to limit eligibility for trade union membership with regard to supervisory staff, the Committee recalls that it is not necessarily incompatible with the requirements of Article 2 of Convention No. 87 to deny managerial or supervisory employees the right to belong to the same trade unions as other workers, on condition that two requirements are met: first, that such workers have the right to establish their own associations to defend their interests and, second, that the categories of such staff are not defined so broadly as to weaken the organizations of other workers in the enterprise or branch of activity by depriving them of a substantial proportion of their present or potential membership. It also recalls that limiting the definition of managerial staff to persons who have the authority to appoint or dismiss is sufficiently restrictive to meet the condition that these categories of staff are not defined too broadly [see Digest, op. cit., paras 247 and 249]. The Committee requests the Government to ensure that eligibility restrictions are in accordance with these principles, and to keep it informed in this regard. The Committee notes that, according to the complainants, several other collective agreement provisions have been qualified as “irrational” and recommended for revision, and that the Government neither denies nor replies to these allegations. In this regard, the Committee wishes to recall that, in examining allegations of the annulment and forced renegotiation of collective agreements for reasons of economic crisis, the Committee was of the view that legislation which required the renegotiation of agreements in force was contrary to the principles of free and voluntary collective bargaining enshrined in Convention No. 98 and insisted that the Government should have endeavoured to ensure that the renegotiation of collective agreements in force resulted from an agreement reached between the parties concerned [see Digest, op. cit., para. 1021].
10. 575. In particular, as regards the recommendation to limit eligibility for trade union membership with regard to dismissed workers, the Committee refers to its previous examinations of Case No. 1865 involving the Republic of Korea [304th Report, para. 251, and 346th Report, para. 761] and draws once again the Government’s attention to the general principle that the right of workers’ organizations to elect their own representatives freely is an indispensable condition for them to be able to act in full freedom and to promote effectively the interests of their members. For this right to be fully acknowledged, it is essential that the public authorities refrain from any intervention which might impair the exercise of this right, whether it be in determining conditions of eligibility of leaders or in the conduct of the elections themselves. More specifically, given that workers’ organizations are entitled to elect their representatives in full freedom, the dismissal of a trade union leader, or simply the fact that he leaves the work which he was carrying out in a given undertaking, should not affect his trade union status or functions unless stipulated otherwise by the constitution of the trade union in question. Moreover, the Committee once again recalls that a provision depriving workers of the right to union membership is incompatible with the principles of freedom of association since it deprives the persons concerned of joining the organization of their choice. Such a provision entails a risk of acts of anti-union discrimination being carried out to the extent that the dismissal of trade union activists would prevent them from continuing their trade union activities within their organization. The Committee requests the Government to indicate, within the framework of Case No. 1865, the steps taken to respect these principles.
11. 576. Concerning the recommendation to review the requirement of union consent in case of restructuring, the Committee has emphasized that it is important that governments consult with trade union organizations to discuss the consequences of restructuring programmes on the employment and working conditions of employees. It has always requested that, in the cases where new staff reduction programmes are undertaken, negotiations take place between the enterprise concerned and the trade union organizations [see Digest, op. cit., paras 1081–1082]. The Committee expects that the Government will take due account of the principles enunciated above in the future before exercising its authority to make such decisions, and requests that steps be taken in this regard.
12. 577. Furthermore, the Committee notes with deep concern that, following strike action at several public institutions, numerous trade union officials and members participating in strikes have been indicted under section 314(1) of the Penal Act for obstruction of business and/or dismissed or subjected to disciplinary measures. The Committee recalls that the question of the application of “obstruction of business” provisions in an occupational context has been the subject of recurring comment by the Committee in relation to its examination of Case No. 1865 involving the Republic of Korea. The Committee observes that industrial action is deemed illegitimate under section 314(1) of the Penal Act when the impact of the recourse to this fundamental right amounts to obstruction of business. In this respect, the Committee recalls that it has always recognized the right to strike by workers and their organizations as a legitimate means of defending their economic and social interests. As regards cases in which strikes may be restricted or prohibited, the Committee has always held that, by linking restrictions on strike action to interference with trade and commerce, a broad range of legitimate strike action could be impeded [see Digest, op. cit., paras 521 and 592]. Moreover, the Committee wishes to emphasize that strikes are by nature disruptive and costly and that strike action also calls for a significant sacrifice from those workers who choose to exercise it as a last resort tool and means of pressure on the employer to redress any perceived injustices. The Committee is therefore bound to express its great concern at the excessively broad legal definition of “obstruction of business” encompassing practically all activities related to strikes and the extremely restrictive interpretations of what is deemed to be legitimate strike action and of what are deemed to be “negotiable” subjects that are covered by collective bargaining. The Committee once again urges the Government to take all necessary measures without delay so as to bring section 314 of the Penal Code (“obstruction of business”) into line with freedom of association principles, and to keep it informed in this regard. It also reiterates that penal sanctions should only be imposed as regards strikes where there are violations of strike prohibitions which are themselves in conformity with the principles of freedom of association. Moreover, the authorities should not have recourse to measures of imprisonment for the mere fact of organizing or participating in a peaceful strike [see Digest, op. cit., para. 668]. The Committee thus requests the immediate dropping of criminal charges (both fines and prison sentences) brought under section 314 of the Penal Code (“obstruction of business”) against union officials and members for participating in the relevant strikes at KORAIL, KOGAS, National Pension Service and South-east, South, East-west, West and Central Electric Power Companies, should they be sentenced for legitimate trade union activity. Moreover, the Committee observes that both the indications of the complainant and the Government coincide in the fact that the 169 trade union officials from KORAIL were dismissed due to their participation in the November 2009 strike that was deemed illegal under section 314 of the Penal Code (“obstruction of business”). Considering that the strike was declared illegal based on a legal requirement which is in itself contrary to the principles of freedom of association and has been repeatedly the subject of comment by the Committee in the framework of its examination of Case No. 1865, the Committee requests the Government to take measures to ensure the immediate reinstatement of the 169 trade union officials as well as the lifting of disciplinary measures against the workers from KORAIL and the National Pension Service. The Committee further requests the Government to keep it informed of the outcome of any ongoing judicial proceedings, including before the Supreme Court.
13. 578. As regards the Korean Labour Institute in particular, the Committee considers, with reference to its comments enunciated above concerning section 314 of the Penal Code (“obstruction of business”), that the criminalization of industrial relations is in no way conducive to harmonious and peaceful industrial relations, and requests the immediate dropping of criminal charges (both fines and prison sentences) brought under this provision against union officials and members for participating in the strike at the Korean Labour Institute, should they be sentenced for legitimate trade union activity. In relation to the alleged pressure to encourage disaffiliation from the KCTU exercised by the management of the Institute on the union following the strike, the Committee recalls that a workers’ organization should have the right to join the federation and confederation of its own choosing, subject to the rules of the organizations concerned, and without any previous authorization [see Digest, op. cit., para. 722]. Considering that the alleged behaviour would amount to a serious act of interference on the part of the employer, the Committee requests the Government to institute an independent inquiry without delay into this allegation and to keep it informed of the final outcome of such investigation and of any measures taken as a result.
14. 579. With respect to the allegation that, six months after the unilateral termination of the collective agreement, previously granted facilities were discontinued at KOGAS and the South-east, South, East-west, West and Central Electric Power Companies. The Committee considers that such an attitude and behaviour is hardly conducive to the development of normal and sound industrial relations based on mutual confidence and respect. Also, the Committee wishes to recall that, when examining an allegation concerning the denial of time off to participate in trade union meetings, the Committee recalled that, while account should be taken of the characteristics of the industrial relations system of the country, and while the granting of such facilities should not impair the efficient operation of the undertaking concerned, Paragraph 10, subparagraph 1, of the Workers’ Representatives Recommendation, 1971 (No. 143), provides that workers’ representatives in the undertaking should be afforded the necessary time off from work, without loss of pay or social and fringe benefits, for carrying out their representation functions; subparagraph 2 of Paragraph 10 also specifies that, while workers’ representatives may be required to obtain permission from the management before taking time off, such permission should not be unreasonably withheld. The Committee further recalls that the withdrawal of the check-off facility, which could lead to financial difficulties for trade union organizations, is not conducive to the development of harmonious industrial relations and should therefore be avoided [see Digest, op. cit., paras 475 and 1110]. The Committee expects that the Government will duly take these principles into account in the future and consider steps to restore the privileges taken away from trade unions at public institutions when the relevant collective agreements have lost their validity.
15. 580. Moreover, the Committee notes with regret the serious allegations of acts of anti-union discrimination and anti-union interference against officials and members of the trade union at the Korean Institute of Construction Technology. It also notes that the Government neither denies nor replies to these allegations. The Committee recalls that one of the fundamental principles of freedom of association is that workers should enjoy adequate protection against all acts of anti-union discrimination in respect of their employment, such as dismissal, demotion, transfer or other prejudicial measures. This protection is particularly desirable in the case of trade union officials because, in order to be able to perform their trade union duties in full independence, they should have a guarantee that they will not be prejudiced on account of the mandate which they hold from their trade unions. The Committee has considered that the guarantee of such protection in the case of trade union officials is also necessary in order to ensure that effect is given to the fundamental principle that workers’ organizations shall have the right to elect their representatives in full freedom. As regards allegations of anti-union tactics in the form of bribes offered to union members to encourage their withdrawal from the union and the presentation of statements of resignation to the workers, as well as the alleged efforts made to create puppet unions, the Committee considers such acts to be contrary to Article 2 of Convention No. 98, which provides that workers’ and employers’ organizations shall enjoy adequate protection against any acts of interference by each other or each other’s agents in their establishment, functioning or administration [see Digest, op. cit., paras 799 and 858]. The Committee therefore requests the Government to institute an independent inquiry into the alleged acts of anti-union discrimination. Should it be found that the relevant trade union officials were dismissed or otherwise prejudiced due to their exercise of legitimate trade union activities/on account of their union affiliation, the Committee requests the Government to take the necessary steps to ensure that they are fully reinstated in their positions without loss of pay. Noting with deep concern the allegations of acts of anti-union interference by the employer, which have led to the union losing the majority of its union members, the Committee also requests the Government to initiate an independent inquiry into these allegations, in order to establish the facts, and, if necessary, to take the necessary measures to ensure full respect of the principles of freedom of association. It requests the Government to keep it informed of the outcome of the inquiries conducted.
16. 581. Lastly, while being mindful of the fact that, as already mentioned above, collective bargaining in the public sector calls for verification of the available resources in the various public bodies or undertakings, the Committee expresses its deep concern about the apparently serious impact on the trade union movement of the measures taken by the Government in this context (i.e. the issuance of budgetary guidelines regarding public institutions, and the assessment of the soundness of their financial situation through performance management evaluation reports, audits or inspections). The Committee requests the Government to investigate, with this concern in mind, the detrimental impact of the above measures on the trade union movement as a whole and to take any remedial measures that it deems appropriate. It also requests the Government to take proactive measures to promote free and voluntary good-faith collective bargaining in public institutions and undertakings and harmonious industrial relations in the public sector that respect freedom of association and collective bargaining principles.