Bank workers stage strike against merit pay system

Tens of thousands of unionized bank workers in South Korea staged a walkout Friday against a performance-based pay system but their banks were operating normally.

Around 18,000 employees from 17 local banks nationwide joined the strike, accounting for only 15 percent of all of their workers, the government said.

It added that the participation rate was about 2.8 percent at the four leading local banks: Kookmin, Shinhan, KEB Hana and Woori, which comes to 0.5 person per bank branch.

"All banks' branches operating normally," the Financial Services Commission (FSC) said. "It represents a low level of support among union members for the opposition to the performance-linked pay system, which is the purpose of the strike."

The FSC's statement came hours after the Korean Financial Industry Union (KFIU), the nation's major umbrella union for bank workers, held a general strike with a ceremony at the Sangam World Cup Stadium in western Seoul.

The union claimed about 50,000 workers, half of its total members, gathered at the venue, although some arrived there late.

"It started later than scheduled due to many participants from local areas outside of Seoul," a KFIU official said. "The number of participants was about 50,000 as of 11:20 a.m. The total turnout is expected to reach 60,000."

Prior to the strike, the KFIU said most of its members would join the one-day collective action, making it the largest-ever strike by a single labor union.

Its walkout, the first in two years, came in defiance of the government's repeated calls to resolve the dispute through dialogue.

The union said it had no other choice but to protest against the scheme for a full-scale performance-linked salary mechanism, arguing it will be used to allow banks to fire more employees and eventually lower the competitiveness of the banking sector.

"We can't accept the dismissal salary system forced by the administration even with a knife under our necks," said Kim Moon-ho, head of the union. "It will seriously harm the stability of the financial industry and bring irreversible damage to the people."

The union will consider "additional action" after the one-day strike, he added.

The government has stressed that merit-based pay is a must to help ride out a crisis facing the financial sector, mainly caused by prolonged low economic growth and interest rates.

"The survival of the banking industry over the next 10 years is at stake," the FSC said. "The salary level in the domestic financial circles is excessively high for productivity."

Labor costs at local banks have continued to rise despite worsened profitability attributable to a "seniority-based and inflexible" pay system, it pointed out.

The FSC, tasked with reforming the nation's financial sector, dismissed the KFIU's assertion that the merit-based pay system is designed for unilateral wage cuts and easier sacking of workers.

"It's intended to motivate employees to work harder and better and enhance their expertise needed to strengthen the financial industry's competitiveness," said the FSC.

The government will endeavor to help banks introduce an "objective, fair and transparent" performance evaluation system via talks with employees, it added.

Source: Yonhap News Agency

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