KFIU Introduction 2010.9

1. KFIU Introduction 2010.9 Korean Financial Industry Union

2. Contents • Organization • Affiliate Members of KFIU • Change of KFIU’s Union Members • Major History • Major Outcomes of KFIU • - Frontier of Five Day Work-Week • - Organizing Irregular Workers • 2010’s HOT Issues • - Time Off System in Korea • - Performance-based Pay System

3. Organization ITUC Federation of Korea Trade Union(FKTU) UNI Korean Financial Industry Union(KFIU) National Convention Representative Convention Central Committee President / Executive Vice President General Secretary Policy Making & Public Relations Bureau Organizing Bureau External Relations and Equality Bureau Edu. & Culture Bureau Accounting & Backup Bureau

4. Affiliate Members of KFIU Affiliates Total 34 Commercial Bank(7) Government Invested(10) Regional Bank(6) Cooperatives And others(11) Shinhan Bank Woori Bank SC First Bank Hana Bank Korea Exchange Bank Kookmin Bank Citibank Korea Inc. Korea Development Bank Industrial Bank of Korea Export-Import Bank of Korea Korea Credit Guarantee Fund Korea Technology Fund Korea Housing Finance Corporation Korea Finance Corporation Korea Asset Management Corporation Korea Appraisal Board Korea Enterprise Data Daegu Bank Busan Bank Kyongnam Bank Kwangju Bank Jeonbuk Bank Jeju Bank National Agricultural Cooperative Federation National Federation of Fisheries Cooperatives National Credit Union Federation of Korea Korea Financial Telecommunications & Clearing Institute Woori Finance Information System Other finance-related firms

5. Change of KFIU’s Union Members • - After 1997 financial crisis, about 60,000 decreased. • During 2008~2009, about 20,000 members increased due to organizing irregular • workers. They were shifted from irregular status to regular workers.

6. Major History • In 1960, KFIU was established by 5 commercial banks in association form. One year later, it was transformed into industrial level union. • In 1981, it was shifted to enterprise level union according to compulsory revision of labor laws under the military regime. • Since the 1997 IMF financial crisis, about 60,000 workers were laid off after 5 banks’ liquidation. • In 2000, KFIU felt keenly the necessity of industrial level union since it fully recognized the limitation of enterprise level union under the worsening labor movement circumstances. • KFIU again transformed the union type into industrial level union to address the challenges under deregulating economy and labor market. It was the first case among FKTU affiliates.

7. Major Outcomes 5 day work- week • In July 2002, KFIU signed 5 day work-week agreement after long & winding argument and negotiation with employers and government. This was very historical event to initiate the legislation of 5 day work-week in Korea. • Since the 1997 crisis, KFIU has constantly raised irregular workers issue to government and political world. • KFIU is the frontier of addressing and organizing irregular workers by shifting them to regular workers. That created a great sensation to business world and society. • KFIU is still raising irregular workers issue that would cause economic polarization and bring negative economic effects and to worsen decent jobs. Organizing Irregular Workers

8. 2010 Hot Issue 1 : “Time-off System” • “Time-off System” is aimed at the ban on wage payment to full-time unionists under the Trade Union and Labor Relations Adjustment Act. For the collapse of labor movement, government allowed “Time-off Limits” which means a ceiling within which the labor and management may agree on the number of eligible full-time or part-time unionists. • The number of full-time unionists eligible for time-off is “smaller on top, larger on bottom”.

9. 2010 Hot Issue 1 : “Time-off System” • KFIU waived “time-off limits” by the end of this year because the current collective agreement shall be valid until December 31, 2010. • From next year, KFIU have to reduce 295 incumbent full-time unionists down to 161 people, which means 46% cut even though KFIU gets the maximum numbers within the time-off limits from employers through this year’s collective bargaining. • Among KFIU’s affiliates, larger unions such as Kookmin Bank, NongHyup, and Woori Bank should decrease their current full-time unionists by 58~67% at least. • If an employer insists on a number of paid time-off hours which is way below the given limit, it would escalate into a labor conflict. • Especially government-invested financial institutions will face tough negotiation with their employers because government strongly controls labor union activities and tries to reduce full-time unionists for weakening the strength of labor unions in public sector.

10. 2010 Hot Issue 2 : “Performance-based Pay” • The government is forcing state-owned banks or institutions to introduce “performance-based salary system”, dismantling previous “rank or career based salary system” which has been peculiar labor market practices and culture. • Government guideline reads that all government-invested companies have to simplify wages and all other welfare benefits into unified annual salary system attached performance-based pay. • In addition, performance-based pay to gross annual salary should be extended to more than 30% and the range of the higher and the lowest should be over two times according to the result of business performance. Current System New System

11. 2010 Hot Issue 2 : “Performance-based Pay” • KFIU is struggling against this new pay system due to the following reasons; • State-owned financial companies should prefer more important values such as common good or public interest to business results. This performance-based business and pay system could damage precious common good which is invisible, but very invaluable. • Performance-based pay system could cause discrimination and conflict among union members, which is against solidarity spirit and “equal work equal pay” principle. Consequently it might weaken the strength of labor union activities. • Performance index or appraisal is not objective nor reliable. In reality, we can’t have objective views in relation with “invisible” things or synergy which could bring tremendous outcomes in future through cooperation or joint works.

12. The End