SEOUL, Dec. 13 (Korea Bizwire) – The board of directors at seven major commercial banks decided Monday to implement a performance-based pay system – a controversial wage system introduced under the troubled Park Geun-hye administration.
The seven institutions are Woori Bank, Shinhan Bank, KB KookminBank, KEB Hana Bank, SC Cheil Bank, and Citibank.
Officials have yet to decide on the specifics of the new wage system, including when the changes will be adopted, but they’re already facing strong opposition from unionized bank employees, who already went on strike in September during initial talks over performance-based pay.
Although the banks did say that talks will take place with the Korea Financial Industry Union, the umbrella union for bank employees, the unilateral decision announced Monday will make it highly unlikely for any negotiations to take place between the two parties.
The KFIU was taken aback by the surprise decision, but has maintained its stance that the adoption of a merit pay system is the result of pressure from the government. It is currently reviewing the specifics of the decision before announcing its next steps.
“It was likely that government policies would be reevaluated after the impeachment motion was passed, and the Minjoo Party of Korea (main opposition party) was also critical of the merit pay system,” said a union official. “We didn’t expect the Financial Services Commission to enforce the system given the circumstances.”
In an official statement released by the KFIU, officials criticized the FSC for pressuring commercial banks to implement the system, saying that authorities allegedly “ordered” the banks’ board of directors to vote for the system on December 9.
“If the system is pressed forward, those in charge will be labelled as collaborators of the Park administration, and we’ll have them punished.”
By Joseph Shin (email@example.com)