Labor and management in the banking sector are in conflict over the proposed performance bonus increase. The IBK Industrial Bank labor union has threatened a general strike demanding special performance bonuses, while the unions of commercial banks are also calling for a performance bonus increase that includes last year's cuts. In contrast, management is exercising caution regarding performance bonus increases, citing criticisms of a 'money party' and increasing economic uncertainty, leading to signs of labor-management conflict.
According to the financial sector on the 16th, the National Agricultural Cooperative Federation labor union is reportedly receiving reports regarding the misconduct of Chairman Kang Ho-dong and other executives. The union is specifically receiving reports of sexual harassment, unjust work orders, and improper use of corporate credit cards. There are analyses that the union has begun receiving reports on misconduct in response to the National Agricultural Cooperative Federation's performance bonus measures.
The National Agricultural Cooperative Federation reportedly notified the National Agricultural Finance Group and its financial affiliates of performance bonuses at last year's level. The agricultural union also plans to hold protests against this.
The Industrial Bank labor union has decided to conduct a general strike at the end of this month, demanding the payment of special performance bonuses. A vote on the union's strike action was conducted among members on the 12th, resulting in 95% (6,241 people) in favor from 88% of voters. While the Industrial Bank has participated in general strikes organized by the financial union in the past, this will be the first time the bank conducts a general strike on its own.
The union is demanding the payment of special performance bonuses, cash compensation for accrued vacation time (overtime pay), and an increase in the employee stock ownership plan. Other state-owned banks, including the Industrial Bank and the Export-Import Bank, are also demanding special performance bonuses, arguing that there is a significant wage gap compared to commercial banks.
Negotiations over performance bonuses at some commercial banks are also sluggish. The banking sector labor union is insisting that proper compensation must be received this year, as last year’s performance bonuses were cut. As public criticism regarding the 'money party' grew, the banking sector adjusted last year’s performance bonus payout from a range of 300% to 400% down to 200% to 300%. The union's demand is to raise performance bonuses, including the amounts cut last year.
Financial authorities are continuing their criticism of the banking sector for expanding interest revenue this year as well. With economic conditions worsening due to a recession and unstable political situations, financial authorities believe that banks should not be holding a performance bonus party while benefiting from high interest rates.
There were many forecasts that banks would decide on performance bonuses similar to last year’s level. However, as the Industrial Bank and the National Agricultural Cooperative Federation have clashed with their management, other bank unions are also shifting to a more hardline stance. Analysts in the financial sector say that this hardline stance by the unions is not unrelated to the political situation surrounding the impeachment. Management still maintains the position that performance bonuses should be set in accordance with the sentiments of the public, aligned with the stance of financial authorities.
A representative from a commercial bank said, 'There were many incidents and accidents in the banking sector last year and this year, and public criticism regarding the increase in lending rates continues,' adding, 'As the political situation is unstable and the recession deepens, it is burdensome for banks alone to increase performance bonuses.' They noted, 'However, the union does not seem prepared to accept performance bonus cuts for two consecutive years.'