The South Korean government has launched a new political offensive to overturn hard won job securities, Clive Tilman looks at what's at stake
On November 13 the Korean Supreme Court appeal ruled in favour of management and against the reinstatement of laid off Ssangyong motors employees. The employees were laid off in 2009 after a bitter standoff with police and 77 day factory occupation. The appeal decision overturned an earlier decision on 7 February 2014 whereby the Seoul High Court held the dismissals to be in violation of Korean labour laws. The case has now been sent back to the Seoul High Court for the rehearing on remand.
A significant number of legal commentators and progressive civic groups have openly criticised the decision and accused the Supreme Court of giving into political pressure from powerful business groups and the ruling right wing Saenuri party. In a press conference on November 16 activists lawyers from the Seoul Bar Association, the civic group People’s Solidarity for Participatory Democracy and the main opposition party New Politics Alliance for Democracy openly criticised the decision and raised suspicions as to the methods used by the court in reaching its verdict.
The Korean Metal Workers Union (KMWU) has expressed its dissatisfaction with the ruling and has vowed to conduct an “indefinite fight” until all workers are reinstated. The union has used strong words to condemn the ruling and accused the Supreme Court of playing politics. Kim Deuk-jung, head of the Ssangyong chapter of the KMWU stated: "Unless the management comes up with any plan for their reinstatement by the end of this month, we will take stern action…We believe that the judges took political considerations in order to protect management, instead of trying to protect weak and underprivileged workers. It's deplorable”. On 15 November a large scale demonstration was held outside the Ssangyong factory in Pyeongtaek, a city located 77 km south of Seoul, more protest actions are planned.
Background to the Ssangyong struggle
The story began in 2004 when the Chinese company Shanghai Automotive Industry Corporation (SAIC) acquired 49% of shares in Ssangyong motors. As a foreign investor, SAIC were granted a license to purchase shares on the grounds it invest a minimum of $1 billion in the company over a five year period.
Instead of investing in the company, however, SAIC stripped its assets and stole key technology for use in its main operations in China. SAIC wanted to get its hands on a hybrid diesel engine that had been developed through grants from the Korean government. After stripping the company of its taxpayer-funded technology, SAIC withdrew from the country to avoid prosecutions from pending government investigations. The company then hired accounting firm Deloitte to exaggerate its debt-to-asset ratio to justify this cut-and-run policy.
During the third quarter of 2008, the debt-asset ratio of Ssangyong was 150%. This was lower than major South Korean companies such as Kia (178%) and GM Daewoo (184%). To quality for insolvency, Deloitte wrote down Ssangyong’s tangible asset value from $1.7 billion to $867 million. This inflated the company’s debt-to-asset ratio from 150% to 561%.
After SAIC left, the troubled company was taken over by the Korean government as it sought to find another foreign buyer. It was during this period that the right-wing Lee Myung Bak administration sought to smash the Ssangyong branch of the KMWU as part of its war on organised labour.
The suspicious accounting reports were used to justify mass layoffs. The union offered generous compromises, including taking large scale pay cuts of up to 50% and less working hours. Despite this, the government refused all negotiations with the union. Workers responded with a 77-day factory occupation that ended after a brutal siege by armed scabs and riot police.
The then governing Lee Myung Bak regime achieved its goal. Union leaders were jailed and it appeared that it had successfully smashed a militant arm of the Korean labour movement. The company was then sold off at a rock bottom price to the Indian company Mahindra and Mahindra Limited. Many workers gave up and moved on. Others committed suicide under the pressure of losing their livelihood. However, 153 workers kept up the fight through staged daily protests for the past five years. This group took the case to court.
Political background to the 13 November ruling
The 13 November verdict is a clear sign of a new political offensive to overturn hard won job securities, as Kim Tae-wook, an attorney for the union, stated in a press conference: “The Supreme Court’s decision that the layoffs were justifiable can only be read one way: they’re giving up any kind of control over layoffs”.
The political nature of the decision can be further highlighted by the fact that it was released just weeks before a public announcement by the the hard right-wing Park Geun-Hye administration to overhaul Korean labour laws. On 24 November the Park administrationFinance Minister Choi Kyung-hwan publicly announced plans to revise Article 24 of the Labour Standards Act in order to make it easier to dismiss workers and by removing legal requirements for management to consult with the union before considering redundancies. In a press conference Finance Minister Choi regurgitated the demands of business lobby groups by calling his proposal a shift towards more “flexible employment”, he also mocked regular workers for being “overprotected”. The ruling class obviously wants to further exploit the already tightly squeezed working class in order to make workers pay for the failings of capitalism- it is more than obvious that these new laws will be used to target union stronghold, however behind Choi’s rhetoric is a far more sinister goal. Behind the new law reform proposal is an attempt to stir up division between regular and irregular workers.
Compared to western anglo-American countries, South Korean labour law provides regular workers on permanent employment contracts with a considerable degree of job security. Articles 23 and 24 of the Korean Labour Standards Act set out a processes whereby employees can only be dismissed to “avoid financial difficulties” and there is an “urgent managerial need” to take such action. The Labour Standards Act also sets out a consultation process between the union and management that must be followed before redundancies can be considered. These job securities were the product of hard won class struggle against the bosses that culminated in 1987 with the union led democratic uprising and the overthrow of military rule.
The 1987 democratic uprising, known as the “Great Struggle”, saw striking advances in union organisation- the number of unions increased threefold and union membership spread to formerly non-unionised sectors such as hospitals, construction, banking and eduction. Strikes reached fever pitch in 1987 with the number of strikes increasing from 278 per annum in 1986 to 3,749 in 1987, this is an average of 44 strikes per day. Most of these strikes were spontaneous and the product bottled up tensions caused by decades of exploitation and abuse of workers during the period of rapid economic growth that began in the 1970s under the Park Chung-hee military regime. Strikes erupted across the country, all the major South Korean conglomerates were shut down. The actual scope of the struggle was amazing, strikes cut across all industries , all sectors and all local regions; it was truly a nationwide worker revolt. Bus and taxi drivers were on strike across the country, striking fishermen shut down the country's fish markets and in mid August over 20,000 miners walked out of their pits. Some of the most militant strikes were at the large industrial conglomerates, massive walkouts by Hyundai workers symbolised the escalation of labour militancy at the time.
It was during this outburst of intense militant struggle that workers won rights of association and legal protection clauses. in the courts concessions were wrenched out of the judiciary in landmark decisions that turned in favour of the workers and entrenched existing codified labour rights.
By the early 90s the South Korean “tiger” economy started to show signs of slowing. South Korea was just another capitalist country and just like capitalism in the west, Korean capitalism was not immune to capitalist laws of over- accumulation of capital and the tendency for the rate of profit to fall. It was in this atmosphere that the Kim Yong Sam administration pushed a neoliberal offensive in a drive to increase Korea’s international “competitiveness”. In April 1996 the government launched the Commission for Industrial Relations Reform to debate revisions of Labour Standards Act. The KCTU leadership initially joined the commission in an attempt to reach some sort of dialogue and compromise with the government. However contrary to its promises, the government railroaded an anti-worker bill through the assembly on December 26 1996 in the absence of the opposition party. The new amendments included new measures such as the right to use scab labour during strikes, the legalisation of layoffs and the prohibition of wildcat strikes.
In response the KCTU leadership called a general strike in the winter of 1996-97. This strike proved to be another major turning point for the Korean labour movement. Unlike strikes of the late 80s and early 90s where fierce worker struggles forced capital and the state to retreat, in the context of slowed economic growth and a neoliberal offensive the government was far more determined to use the full weight of the state to crush dissent in the interest of appeasing international capital. The workers responded with equally intense militancy, between 26 December 1996 and 27 February 1997 strikes and protest rallies spread across the country. The KCTU organised massive rallies that were attended by hundreds of thousands of workers. According to KCTU statistics, over 403,179 workers from 528 unions took part in the strike. The strike reached its peak when members of the traditionally conservative Federation of Korean Trade Unions (FKTU) joined the struggle. The strikes and rallies hit the government so hard that even conservative newspapers were calling for the government to concede. The workers were victorious and by March 1997 the government agreed to back down, the labour law amendments were repealed and the KCTU was given legal status. The workers had won this round, but the next big fight was just around the corner.
Despite earlier attempts to undercut the unions, it was the Asian Financial Crisis that provided the stage for a full frontal assault on organised labour. The newly elected Kim Dae-jung government instigated a series of neoliberal structural adjustment policies in return for IMF loans. It was from the 1997 post-crisis neoliberal restructuring period that the ruling class was able to win back some the ground it lost earlier- the first major offensive by the ruling class occurred in July 1997 when Hyundai Motors publicised a restructuring plan to lay of over 10,000 workers. The workers fought back with a bitter two month factory occupation. Although the workers were united and managed to hold firm, the strike ended with the union leadership accepted a “compromise” that saw over 300 female cafeteria workers placed on redundancy. The July 1997 proxy war at Hyundai was the start of a new offensive by the ruling class and it resulted in ruling victories at traditional militant union strongholds such as car part supplier Mando machinery where workers were physically attacked and dismissed en mass.
It was also in the wake of the 1997 Asian Financial crisis that laws were passed that increased the freedom for companies to hire “irregular” workers on casual contacts for low pay and with little legal protections. So successful were these reforms that irregular workers now make up up to 46% of the Korean workplace. Most of these workers are hired through parasitic labour hire companies and sophisticated outsourcing networks designed to weed out union militants and keep wages at a minimum. Irregular employment relationships have been used to undermine hard won wages and job securities without directly changing the law. The regular/irregular worker divide has also been used in a dirty game to divide workers. Right-wing newspapers such as the Chosun Ilbo routinely characterise regular workers as the “labour aristocracy”.
Korea at a turning point: Beautiful solidarity or ugly defeat?
Just as the 1997 Asian financial crisis sparked an earlier push towards labour restructuring, the current push by the Park Geun Hye government to water down had won job securities is a part of a larger neoliberal attack by the Korean ruling class in response to decades of sluggish economic growth that was exacerbated by the global financial crisis. Despite this, there has been a spark of resistance from perhaps one of the most unlikely of sources: irregular workers.
Because of the precarious nature of their employment irregular workers have been notoriously difficult to organise. Despite these hurdles, some of the most militant struggles of the past ten years have been by irregular workers. Over the past ten years there have been strike actions by irregular workers in industries such as janitorial work, security, telecommunications, construction, and transport (just to name a few areas of struggle). Some of the largest and most militant struggles of the past few years were the E-Land strike in 2007 and the Hyundai irregular worker’s bitter factory occupation in November/December 2010. At Samsung it has been outsourced service centre workers who have made the first successful attempts to set up a permanent union presence in the historically anti-union company- the Samsung Service Workers chapter of the KMWU. Although the union is caught up in an ongoing struggle just to preserve its existence, the union is an astonishing achievement given that Samsung has successfully pursued a “no union” policy that has kept unions completely out of the company for decades, thus the irregular workers were able to achieve more in Samsung than regular workers have ever done.
There are no shortages of strikes and industrial struggles in Korea. Official figures released by the South Korean labour ministry reveal a sharp increase in industrial unrest, the number of labour disputes between January to September 2014 have increased by nearly 76 percent since the same time last year. As this article enters print there are strikes and protest actions regularly taking place across the country. For example, in the month of November 2014 alone there have been multiple actions including strikes by the disgruntled workers, these include: a two day strike by over 30,000 temporary school workers, a strike by LG telecommunications irregular workers, a one day walkout by Nestle workers on 13 November over the company's refusal to obey a 2013 court ruling, a strike by Hyundai Heavy Industries shipbuilding on 27 November, and in central Seoul a protest camp has been set up by dismissed irregular workers from the broadcasting company Cable and Moore (C&M).
The key question, however, is how can we turn these largely autonomous acts of discontent into a united force as was seen in 1987 and 1996. The victories in the late 80s and early 90s show that workers are at their strongest when they are united across workplaces and industry. Militant outbursts of struggle by desperate irregular workers, such as the Hyundai 2010 occupation, demonstrate that there is a deep brewing discontent among South Korea’s exploited workplace. The wider union movement must embrace the struggles of the new irregular workers movement and turn it into a formidable fighting force. The current struggle at C&M has showed some promising signs of future solidarity. Members of the Hope Solidarity Union C&M regular workers union played a leading role in setting up the irregular workers chapter. Since 2012 they regularly met up with their irregular counterparts and talked to them about the need to set up a union. When the irregular workers took to strike action regular co-workers also joined the sit in protest camp and it was the irregular workers who supported their strike fund.
We have seen small windows into the potential for joint solidarity between regular and irregular workers at the 2010 Hyundai factory occupations. As the wave of factory occupations spread from Hyundai's industrial heart in Ulsan to smaller factories throughout the country, it was at the factory in Jeonju that we saw one of the most inspiring acts of solidarity between regular and irregular workers that became known as the “beautiful solidarity”. On 17 November 2010 the regular and irregular workers at the Jeonju Hyundai plant stood together as one to drive out company thugs and strikebreakers and set up an occupation. After taking control of the factory the workers set up a red banner in the factory stating “We Workers are One!”, this was a statement that was made by the Lee So-sun, the mother of the 1970 labour martyr Jeon Tae-il. The slogan of the Jeonju occupation became “solidarity struggles of regular ad irregular workers will burn like a flame”.
By late November 2010 solidarity between regular and irregular workers spread to Hyundai plants across the country, “Beautiful Solidarity” and “We Workers are One” became calls for a new and vibrant movement. Despite these promising signs, solidarity between regular and irregular workers never reached its full potential due to the leadership of the regular workers union and their reluctance to fully mobilise regular workers in support of the strike. Regular workers were ready and willing to strike in support of their irregular worker comrades and on 22 November a delegates conference was held to decide on the next step to be taken. Delegates at the conference voted to hold a strike in early December in support of their irregular co-workers. Despite enthusiasm from delegates, the response from the leadership of the regular workers union was at best lukewarm. At the conference the moderate leadership of the regular workers union pushed for strike action to be delayed and pursued a strategy of “negotiations” with management. In the context of a bitter factory occupation this decision was deadly, without the full support of the regular workers union the police laid siege to the factory occupations. Electricity and water was cut off and no food was allowed into the factory and as winter drew on temperatures reached below zero, given these circumstances the workers had to end their occupation on 9 December 2010.
The history of the Korean movement has shown that workers are strongest when they are united and weakest when they are divided. Militant acts must be backed by efforts to build real solidarity. If the union movement is to move forward, any effort to stage a full scale revival of Korea’s militant labour movement must coordinate solidarity between regular and irregular workers and evolve actions of solidarity into strategic industry wide industrial action.