Paying Union Full-Time Officials? An Unfair Labor Practice Contrary to the ILO

The Principle Is That Unions Themselves Should Bear the Cost to Ensure Their Independence and Autonomy

In the United States, Japan, and Europe, Financial Support for Unions Is Prohibited by Law

Last June, the government submitted to the National Assembly a partial amendment to the Trade Union and Labor Relations Adjustment Act in order to push for ratification of the core conventions of the International Labour Organization (ILO). The government bill is identical to the amendment to the Trade Union Act submitted to the 20th National Assembly on October 4, 2019, and was prepared on the basis of recommendations by the public-interest members of the Committee for the Improvement of Labor-Management Relations Systems and Practices under the Economic, Social and Labor Council. Among the various provisions in the government bill is the deletion of the current ban on the payment of wages to full-time union officials.

As a matter of principle, wages for full-time union officials should be borne by unions themselves in order to ensure union independence and autonomy. In foreign countries such as the United States and Japan, when a company pays wages to full-time union officials, it is regarded as an act of domination or interference in the union and punished as an unfair labor practice.

In Korea, however, in consideration of unions’ financial difficulties during the past industrialization process, the irrational practice of companies paying wages to full-time union officials was allowed to continue. As this practice became institutionalized, it acted as a major source of conflict at industrial worksites. Because of excessive union demands, the number of paid full-time union officials continued to rise, and the ratio of full-time officials to union members increased to as much as 4 to 5 times that of Japan, becoming a direct burden on management. Excessive union demands for full-time officials led to frequent labor disputes, and as a result, adversarial labor-management relations came to dominate industrial sites. This dampened companies’ willingness to invest, and foreign firms also avoided investing in Korea and in some cases even withdrew from the country. Full-time union officials often occupied a privileged position within companies and enjoyed preferential treatment in wages and other conditions compared to ordinary workers, and the more this happened, the wider the gap between the shop floor and the union became. Collusion between unions and companies over wages for full-time union officials became widespread, shifting the burden onto other stakeholders of firms, including workers, subcontractors, and consumers.

To address these problems, as part of measures to advance labor-management relations, legislation was enacted in 1997 to prohibit the payment of wages to full-time union officials, along with allowing multiple unions. However, considering the shock that the ban on paying wages to full-time union officials would have on unions, its implementation was postponed three times over the following 13 years to allow unions time to prepare for financial self-reliance. It was finally implemented in 2010 together with the introduction of the time-off system.

The time-off system guarantees paid union activities within a company up to a certain level, and serves to make realistic adjustments to, or supplement, the former system of paid full-time union officials. At present, in most workplaces, full-time union officials and time-off beneficiaries are regarded as virtually indistinguishable. Now, 10 years after its implementation, contrary to the initial concerns, the time-off system is assessed as having taken root relatively smoothly in industrial settings as an alternative for resolving the issue of full-time union officials.

As such, industrial sites experienced much conflict over the payment of wages to full-time union officials over the past several decades, and for the past 10 years the issue has been successfully managed through the time-off system as a solution. Against this backdrop, deleting the ban on the payment of wages to full-time union officials on the grounds of ratifying the ILO core conventions raises concerns that Korea may once again invite a return to the labor-management conflicts and confrontations of the past.

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In Advanced Countries Such as the U.S., Japan, and Europe, the Principle Is That Wages for Full-Time Union Officials Are Paid by the Union Itself

Even in advanced countries such as the United States, Europe, and Japan, the principle that wages for full-time union officials are borne by the union itself is firmly established. Exceptionally, such countries strictly manage and operate limited paid time-off arrangements by recognizing only the minimum necessary time and caps on the number of personnel for activities related to worker representation within the company. In most foreign countries, unions are organized by industry, and those who perform union duties are naturally paid out of union finances; thus, the issue of paying wages to full-time union officials is not a contentious one.

Some argue that foreign countries do not prohibit by law employers’ payment of wages to full-time union officials. But that is because, in those countries, unions do not even demand such payments and there are no cases in which companies pay wages to full-time union officials. In Japan, which, like Korea, has enterprise unions and has ratified ILO Convention No. 98, the payment of wages by employers to full-time union officials is generally regarded as an unfair labor practice except in exceptional cases where union autonomy is not infringed, and in general the union itself bears such wages.

It is argued that deleting the provision banning the payment of wages to full-time union officials is necessary in order to ratify the ILO core conventions, but there is a difference between the relevant ILO core convention and the recommendations of the ILO Committee on Freedom of Association.

◆ ILO Committee on Freedom of Association Recommends That “Legislative Intervention Is Not Appropriate for the Payment of Wages to Full-Time Union Officials”

Article 2, paragraph 1 of ILO Convention No. 98 provides that workers’ and employers’ organizations shall enjoy adequate protection against any acts of interference in their establishment, functioning, or administration, and paragraph 2 regards financial assistance by employers to workers’ organizations as an act of interference. Therefore, an employer’s payment of wages to full-time union officials may be seen as an act of interference aimed at placing the union under the employer’s control, which is contrary to the ILO core convention.

On the other hand, the ILO Committee on Freedom of Association has recommended that the issue of paying wages to full-time union officials is basically not a matter for legislative intervention, and should be handled according to voluntary negotiations between employers and unions and the principle of freedom of association.

In this way, the recommendation of the ILO Committee on Freedom of Association conflicts with Article 2 of ILO Convention No. 98, which defines financial assistance to workers’ organizations as an act of interference aimed at placing the union under the employer’s control, and it presents no corresponding provision in the higher-level norm, namely the ILO convention itself. It may also be seen as a judgment made from a perspective of Western labor-management relations centered on industrial union systems, in a sympathetic stance toward issues continually raised by Korean labor groups, without sufficient understanding of the particular features of Korea’s enterprise-union-based labor-management relations, labor environment, and the legal institutions and practices built on them. However, the recommendations of the ILO Committee on Freedom of Association are merely recommendations of an ILO committee and have no legally binding force. In light of the history and context of Korea’s labor-management relations, the current Trade Union Act provision prohibiting the payment of wages to full-time union officials (Article 24, paragraph 4) may be regarded as consistent with the ILO core conventions.

◆ Amendment to the Trade Union Act Would Set Back Progress in Advancing Labor-Management Relations by 10 Years

The government bill deleting the provision banning the payment of wages to full-time union officials leaves room for employers to pay such wages. The current ban was introduced in 1997, together with the legalization of multiple unions, in order to maintain balance in labor-management relations as part of efforts to modernize them. After a 13-year grace period to prevent economic and social disruption, it was implemented in 2010 along with the time-off system. At this point, deleting this provision would reverse years of effort and progress in modernizing labor-management relations and effectively turn the clock back 10 years.

The ILO Committee on Freedom of Association recommended that the issue of wage payments to full-time union officials is basically not a matter for legislative intervention and should be handled through voluntary negotiations between employers and unions. But in Korea, even though repeated postponement of the 1997 legislation was intended to require labor and management themselves to reduce the number of full-time officials and work toward unions’ financial self-reliance, there was no improvement at all over those 13 years; rather, the number of full-time officials continued to increase. The fact that legislative intervention eventually had to be implemented in 2010 may be seen as proving that the issue of paying wages to full-time union officials is in practice impossible to resolve through labor-management autonomy alone.

Even abroad, it is taken for granted that wages for full-time union officials are paid from union finances. In that sense, banning the payment of wages to full-time union officials can be seen as substantively consistent with the global standard. In the United States, Japan, and Canada, financial support for unions is prohibited by law, while in other advanced countries legislative measures are unnecessary because it is already established practice for unions to bear the cost themselves.

◆ Paying Wages to Full-Time Union Officials Is an Unfair Labor Practice

The Korean government’s previous position was also that paying wages to full-time union officials constitutes an unfair labor practice, and in 2009 it announced that the ban on such payments fully conforms to ILO standards (Ministry of Employment and Labor press release, November 9, 2009). Therefore, it is difficult to regard it as appropriate to change that existing position simply because it runs counter to the recommendation of the ILO Committee on Freedom of Association, which has no legally binding force.

In light of the foregoing—Korea’s distinctive history and context of labor-management relations, foreign examples, Article 2, paragraph 1 of ILO Convention No. 98, and the government’s previous position—it is difficult to regard the deletion of the provision banning the payment of wages to full-time union officials as appropriate.

Kangsik Kim, Professor, School of Business Administration, Korea Aerospace University

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Original title: 노조전임자 급여지급? ILO에 역행하는 부당노동행위다

Author: Gang-sik Kim

Date: 2020-11-26

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=23261