President Lee Jae-myung speaks at a Cabinet meeting held at the Blue House on the 21st. Yonhap News
President Lee Jae-myung’s move to rule out the introduction of “N% of operating profit as performance-based pay” as a subject of labor disputes appears rooted in concerns that labor-management conflicts at some companies could spread across the entire industrial sector. His use of strong expressions such as “outrageous” and “at this rate, there will be no end” toward some union demands, while stressing the need to establish standards for a reasonable line, is interpreted in the same context.
Lee had earlier issued a warning-tinged message when Samsung Electronics’ union demanded 15% of annual operating profit as a source for performance pay, saying, “The three labor rights were not granted as force for the benefit of just a few individuals.” But recently, as Samsung Electronics’ union raised objections over the issue of building a semiconductor fab (factory) on the site of the Gwangju military airport, he revealed his awareness of the problem that unions must be prevented from blocking companies’ management rights over each individual issue.
Lee continued his deliberate remarks just before the cabinet meeting he presided over at the Blue House on the 21st was switched to a closed session, saying, “I need to talk about this a bit.” Referring to the union’s claim that the Gwangju military airport semiconductor factory establishment issue is “a subject of labor-management negotiations and a subject of labor disputes,” Lee pointed out that it “carries various problems.”
Minister of Employment and Labor Kim Young-hoon reported, “We issued interpretation guidelines centered on various cases regarding whether it constitutes a business management decision affecting working conditions, and it is judged not to fall under (the subject of disputes).” Lee then said, “Because detailed standards have not been set and many disputes arise, it is now becoming a subject of political dispute,” ordering that standards be clarified in preparation for similar controversies.
He also brought up the N% of operating profit performance pay issue. While prefacing it as “a personal opinion,” Lee made clear that this “leans more toward not being a subject of disputes.” His point was that if the scope of labor disputes expands too broadly, individual matters of corporate management—such as “who will be appointed as executive director”—could also be called into question. He also raised his voice, saying, “As for inheritance issues, if someone argues that selling (a company) to a certain person would make that person an unscrupulous business owner who worsens labor conditions, then even the sale of management rights would become a problem, and at this rate, there will be no end.”
This is not the first time Lee has raised issues regarding the scope of labor rights. In response to Samsung Electronics’ union demands for performance pay that erupted in April this year, Lee urged, “It is not about only me surviving, but a sense of responsibility and solidarity is needed to create a world where all workers can live together.” Even afterward, when labor-management conflict over the issue remained unresolved, Lee raised the level of his remarks, saying, “There must be a reasonable line. Institutionally dividing up a fixed percentage of operating profit before even taxes are deducted is something that is difficult even for investors or shareholders to do easily.”
Lee’s direct move to “sort out traffic” whenever sharp labor-management conflicts arise is analyzed to be related to the revised “Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act (Yellow Envelope Act).” Under the Yellow Envelope Act, which took effect in March, the subject of disputes, which had been limited to matters concerning “the determination of working conditions” such as wages, working hours and welfare, was expanded to “business management decisions affecting working conditions.” Despite strong opposition from the business community, the ruling party led the passage of the bill to protect workers’ rights and interests, but as the scope of dispute subjects remains ambiguous and shows signs of conflict spreading across the industrial sector, it is interpreted as a will to block this in advance.
Following Lee’s remarks, related ministries including the Ministry of Employment and Labor are expected to begin work on establishing concrete standards for the scope of labor disputes. In particular, Lee took issue with the practice of trying to solve everything through legislation, criticizing, “The executive branch is a major implementing body of the state, not a mere errand runner. The Ministry of Employment and Labor and others need to make guidelines clear, but the problem is that they are not doing it enough now.” Accordingly, follow-up measures at the executive branch level using presidential decrees, enforcement decrees, enforcement rules and public notices are expected to follow.
Meanwhile, at the meeting that day, Lee reiterated his will to normalize the property market, saying, “Real estate unearned income mobilizing illegal and expedient means has become the biggest culprit destroying our society’s fairness and common sense and hindering national unity.” He then said, “A national grand debate on real estate will be held on the 23rd,” stressing, “To escape from the ruinous real estate republic, we will humbly listen to the voices of the people and create feasible alternatives and measures.”
According to the Blue House, the debate will run for 100 minutes, beginning with the president’s opening remarks, followed by an announcement of the results of prior opinion-gathering by Vice Minister of Economy and Finance Lee Hyoung-il, sector-by-sector presentations by Myongji University professor Jin Mi-yun (supply), Korea Institute of Finance research fellow Kim Young-do (finance) and Hanyang University professor Kang Sung-hoon (taxation), free discussion, and the president’s closing remarks.
The debate will bring together some 140 people, including not only academic experts but also civic groups, licensed real estate brokers and YouTubers. Attendees include Choi Young-min, operator of the YouTube channel “Jaeteck Read by a Pilot” with 1.29 million subscribers, and Chae Sang-wook, operator of “Chaebusim,” as well as officials from the People’s Solidarity for Participatory Democracy, the Minsnail Union and the Citizens’ Coalition for Economic Justice.