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(EDITORIAL from Korea Times on Jan. 13)

Editorials from Korean dailies 07:13 January 13, 2022

Union voice on boards
Bill passed for union representation in boards

The National Assembly passed a bill Tuesday that will mandate public institutions to appoint a union representative to their boards of directors. If the bill is signed into law, 131 public firms and institutions such as Korea Electric Power Corp. will be obliged to name a nonexecutive director recommended or picked by the chief of a labor union to their boards, starting from the latter half of the year.

The passage of the bill came after Lee Jae-myung, the presidential candidate of the ruling Democratic Party of Korea (DPK), called on the Assembly to deal with it last December. Yoon Suk-yeol, the presidential contender of the opposition People Power Party (PPP), backed Lee's stance. The presidential Economic, Social and Labor Council initiated the plan early last year to produce a social consensus. It is designed to enhance the managerial transparency of public firms and institutions by including a union representative on their boards.

Despite a general consensus over the bill, the legislation had been delayed due mainly to opposition from the conservative PPP and the business sector. Though they stopped short of blocking the legislation, PPP lawmakers expressed their dissatisfaction with the bill by abstaining from voting.

The passage of the bill has met mixed reactions. Welcoming the legislation, unions expressed an expectation that the new system will help mitigate labor-management conflicts. They described it as necessary for the nation to better protect the rights of workers. The Federation of Korean Trade Unions (FKTU) said the new system will help speed up much-needed reform of public organizations by improving their transparency and adopting a more democratic management style.

However, the legislation is raising concerns in the business sector that private companies could be affected by the new system. Businesspeople worry that unions might raise their voices for the labor director position to be expanded to private businesses. In that case, the system could have a negative impact on management and worsen the business climate. In 2016, institutions under the Seoul Metropolitan Government introduced a union representative system. Now 82 institutions of 10 municipal and provincial governments have adopted it.

According to a survey conducted by the Korea Labor Institute, more than 50 percent of respondents said the new system has brought about positive changes, enhancing transparency and democratic management of public firms and institutions.

This shows the need for all parties concerned to make concerted efforts to help the new system to firmly take root. With the passage of the bill, enterprises need to forge a more cooperative relationship with unions by enabling more inclusive management. Unions, for their part, should have a more responsible attitude toward management to develop a true partnership and make their companies better workplaces.
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