It is anticipated that the labor and management of the banking sector will be in sharp conflict over wage increases and a reduction in weekly working hours. The National Financial Industry Union (Financial Union), the higher organization of the banking labor union, has demanded a 7.1% wage increase and the implementation of a 4.5-day workweek from management. With the banking sector's union recently continuing its hardline approach, difficult negotiations are expected.
According to the financial sector on the 24th, the Financial Union proposed a 7.1% wage increase and a reduction in working hours as goals for this year's central collective bargaining. The union explained that it calculated the 7.1% increase proposal by considering the economic growth rate (1.5%), the consumer price increase rate (1.9%), and the situation of real wage decline (3.7%) that occurred over the past three years (2022-2024).
In terms of reducing working hours, the union specifically demanded the implementation of a 4.5-day workweek, shortening business hours, early shifts, the eradication of overtime at night, and simultaneous use of lunch breaks. Additionally, the union requested ▲expansion of the scope of ordinary wages ▲extension of retirement age and abolition of the peak wage system ▲increased new hires ▲designation of a day for labor and management.
Management is expected to convey a negative stance on the union's demands. Last year, when the union demanded an 8% wage increase, management proposed a 1.5% increase. They also opposed the implementation of a 4.5-day workweek. This trend from management is forecasted to continue this year.
The labor and management of the financial sector held their first introductory meeting and central collective bargaining on the 8th, with plans to continue additional negotiations on the 22nd.
However, forecasts suggest that this year's labor-management negotiations will not be easy within the financial sector. In recent years, the banking sector's union has maintained a hardline stance, even going so far as to threaten a general strike. Last year, during the individual wage negotiation process, the National Agricultural Cooperative Federation Union demanded a '300% performance bonus,' bringing out the threat of a strike. Subsequently, before the general strike, a dramatic resolution of negotiations between labor and management prevented the strike from occurring.
The Industrial Bank of Korea union conducted its first general strike since its establishment in December due to wage negotiation issues last year. The union has warned that it will hold a general strike in May as last year's wage negotiations have not yet concluded.
The Industrial Bank of Korea union demanded a 2.8% wage increase, a 250% special performance bonus, and a payment of 1 million won for employee stock ownership last year. The union's position is that the bank has been unable to receive adequate compensation as the government has set wages 30% lower than those of other commercial banks. The union also claims that each employee is owed about 6 million won in unpaid overtime.
Analyses indicate that the current political situation is favorable for the union side. This is because the Democratic Party of Korea, which is on favorable ground ahead of the upcoming June presidential election, has formed a policy alliance with the Financial Union. Park Hong-bae, a proportional representative from the Democratic Party, led the general strike in the banking sector as the chairman of the Financial Union in 2019.
In particular, the implementation of a 4.5-day workweek may be pressured by the political arena, as both Democratic Party of Korea primary candidate Lee Jae-myung and the People Power Party have included it as a campaign promise for the presidential election, leading to expectations that the banking sector may proactively adopt it.
A representative from a commercial bank noted, 'Many citizens are experiencing a difficult time due to the domestic economic recession and the expansion of external economic uncertainties,' and added, 'If the bank union is proposing a salary increase of around 7%, it seems difficult to avoid criticism from the public.'