M Korean Federation of Community Credit Cooperatives (KFCC) in Seongbuk District, Seoul, is facing controversy after handing down the severe disciplinary action of dismissal to employee A for posting about a rule restricting recordings on an employee community. As opinion formed that the dismissal of A was unjust, the KFCC central association launched a fact-finding probe. Two years ago, the M KFCC chair stirred controversy for "gapjil," including ordering employees to write "handwritten letters of reflection" and go around other branches to get stamps.
According to the Korean Federation of Community Credit Cooperatives (KFCC) on the 4th, the central association recently began a fact-finding investigation into M KFCC. That is because of internal opinion at the cooperative that the dismissal of employee A that occurred on the 31st was unjust. The central association plans to check whether, even if it was a decision based on a resolution by the cooperative's board, there were any procedural flaws or issues in handling the matter.
◇ Asked, "Do other cooperatives have a rule like this?" and was dismissed
The incident began with a single post A wrote on an employee community. In early last month, A posted that "the cooperative is seeking to newly establish a rule restricting recordings and is collecting signatures from employees," asking whether other cooperatives had similar proposals. The draft would completely ban recording in meetings, interviews, or calls without the other party's consent, and impose severe discipline for violations.
Under Article 3 of the Protection of Communications Secrets Act, if a person is directly participating in the conversation as a party, the act of recording without the other party's consent is itself legal. A, questioning the newly established rule because current law allows recordings that include oneself, posted asking whether this was an employment rule handed down at the central association level and whether any other cooperatives had such a provision. The post drew attention on the community, and the new rule was criticized by employees at other cooperatives.
After the post became an issue, A had to take sudden mandatory leave. After returning, A was immediately dismissed on the 31st based on a board resolution. The dismissal was imposed for posting the cooperative's rule on recording restrictions on the employee community. The employee's personnel information was then deleted.
Under the KFCC code of conduct, disciplinary dismissal applies to employees who, through intent or gross negligence, cause significant damage to the cooperative or disrupt order. It also includes acts such as breach of trust, embezzlement, and theft. The cooperative's chair and board judged that a single post by A caused damage of that magnitude.
◇ The chair behind the "reflection letter gapjil" was disciplined and still elected again this year
The M KFCC chair caused public uproar in the "KFCC gapjil scandal" two years ago and was disciplined by the central association in Jul. last year. Beyond internal discipline, the chair ordered employees involved in spreading a rumor that a new hire was the child of another cooperative's chair to write handwritten letters of reflection not specified in the disciplinary rules and to go around nearby branches to get verification stamps from branch managers. After the case became known and the cooperative's name circulated, the cooperative even changed its name.
The central association launched an investigation into the cooperative and issued a reprimand. However, a reprimand is a minor disciplinary action and is not grounds for disqualification of an executive under Article 21 of the KFCC Act. The chair ran in the nationwide concurrent KFCC chair elections in Mar. and was re-elected. Employees were outraged, saying, "It makes no sense that the employee who questioned the new rule receives harsher discipline than the chair who caused the gapjil scandal."
This is not the first time misconduct by KFCC chairs has stirred controversy. The problem is that even as the KFCC calls for internal controls, oversight and supervision are still not properly carried out. The KFCC central association says that because cooperatives nationwide are separate legal entities, it cannot intervene in each cooperative's decisions one by one.
The recent push to transfer supervisory authority to strengthen oversight of the KFCC has emerged for this reason. Currently, authority to manage and supervise the KFCC lies with the Ministry of the Interior and Safety. But it is virtually impossible for a few civil servants to supervise more than 1,200 branches nationwide. Financial Supervisory Service Governor Lee Chan-jin said at the National Assembly's National Policy Committee comprehensive audit last month that he strongly agrees with unifying supervisory authority over mutual finance institutions under the Financial Supervisory Service, emphasizing regarding the KFCC that "one-third of all cooperatives need to be consolidated or closed."