Comparison of Collective Bargaining Process Between Singapore and South Korea

What is Collective Bargaining?

Collective Bargaining is the process of negotiating employment terms and conditions that takes place between employer or management and a group of employees. In the beginning of the industrial age, the growing organization of workers by workers was the fear of many an industrialist. This was especially true in the Western parts of the world where threats to strike were becoming more common and employers started losing their power over their workers. The growing syndicalism of worker organization could have reminded the West of the threat that was the communist ideal, which in industries are controlled by workers and owned by workers. Fortunately, they were far off the mark. While it is true that worker unions today have far greater influence than in the past, recent times have shown us that all it was promote better teamwork between employers and employees without jeopardising stakeholders or slowing the economy. In fact, as low-income workers earned more, they bought more goods to address their daily and future necessities, reintroducing money back into the economy and growing it even more. Like a rusty bicycle, it moves best when both wheels are oiled sufficiently. Today, cooperation between employer and employee plays a vital role in any healthy economy, and collective bargaining is the cornerstone of that.

Collective Bargaining in Singapore

What started out as a small fishing village turned into first world country with one of the best economies in the world. Singapore has gone through many changes, but one thing that remained unchanged was the county’s focus on trade and cooperation. In Singapore, collective bargaining is a regular process that is repeated every 2-3 years after an agreement expires. The Singapore Government is often involved but mostly in indirect ways. While management and unions negotiate terms, the government acts as a mediator and advisor to both sides, guiding the situation in a way that jobs get created, economic growth is achieved, and social stability is maintained. This Cooperative Tripartism has been key to Singapore’s success. With that said, there are other ground rules, set by the government to ensure that power scale between employers and employees remains balanced. Under the Singapore Industrial Relations Act Section 18[1], there will be no bargaining about the following terms:

• Greater attention to worker’s rights
• Hiring
• Promotion
• Transfer
• Retirement
• Retrenchment
• Dismissal
• Work Assignment

Freedom of association is granted to all workers, ensuring that workers that join unions cannot be treated any worse than employees are not in unions. This prevents employers from discriminating against union members, safeguarding workers right to unionise. Fee-riders become an issue here as a non-union member still gains the benefit of negotiated improved employment terms without having to pay their dues or work towards negotiation as a union member would. In Singapore, Trade Unions are often well organized, large and diverse, from large federations such as National Trade Union Congress, industry level Singapore Teacher’s Union and enterprise level Singapore Airlines Staff Union. They have relatively moderate membership and are run democratically with membership being voluntary. When deciding on taking industrial action or not, Unions can only take action when a majority vote is reached through anonymous ballots. Furthermore, before exercising their right to strike they must first seek the government’s approval, a process that can take up to 30 days. While the government usually does not outright deny them from taking industrial action, they do try to persuade unions to negotiate peacefully without disrupting work, and will persistently do so over many days and multiple attempts. While a few strikes ended up happening anyway, this tactic of peaceful negotiation and the shared goals of job creation, economic growth and social stability resulted in a sharp plummet in Industrial actions taken in Singapore over the years. The biggest leader of cooperative efforts among unions is Singapore’s largest union, National Trade Union Congress (NTUC), which greatly favors cooperation with the government due to its supportive relationship and positive history with the People’s Action Party (PAP).

Collective Bargaining in South Korea

South Korea is no stranger to change, having gone through many conflicts such as Japanese Occupation during the Second World War, the Korean War, 2 Militaristic Regimes and lastly a Democratic reform plagued with corruption cases. With a history brimming with political unease, it is a wonder how it managed to return as the 4th largest economy in Asia. After a democratic reform in 1987, there were big changes to its industrial relations scene.

• Greater attention to worker’s rights
• Reduction in government intervention in collective bargaining
• Increase in relative power of unions
• More Independence and control for national centres (e.g. KCTU)
• Shift in many unions being enterprise-based to industry-based
• Experimentation of Tripartism as means to determine employment terms and work conditions

Labour reforms in 2017 that were supposed to address the stagnating economy were met with great opposition from the working class through nation-wide strikes due to the new policies extending employer flexibility [2]. This exemplifies the great distrust between government and employees, their relationship almost adversarial in nature. The distrust stems from South Korea’s politically unrestful history and perceived difference of goals between employer (e.g. better cost-effectiveness) and employees (e.g. lower working hours). Other countries are pressuring the South Korean government to implement more flexibility into its policies so as to address the ever-changing needs of the global market and to revive South Korea’s stagnating economy. Currently, majority of worker unions in South Korea exist at the enterprise level which was the same level where most collective bargaining takes place, resulting in relatively low bargaining coverage of ~10% [3]. The two largest union confederations are the Federation of Korean Trade Unions (FKTU) and the Korea Confederation of Trade Unions (KCTU), both run democratically and free from heavy government or employer control. Due to it’s adversarial relationship with the employers and a distrust towards their government, workers frequently resort to industrial action, causing disruptions of all sizes (e.g. nation, industry and enterprise).

Comparative Analysis of Industrial Relations factors

There are many similarities between the elements of Industrial Relations of these two Asian countries.

• Both ustilise Tripartism to determine employment terms and conditions
• Both sport healthy economies that are of the best in the world
• Economic growths during the 2000s have made it easier for both employers and employees to secure favorable terms
• Both face the need to increase competitiveness to address changing global market
• Unions are run democratically and are independent from government or employers
• Democratisation has lead to better working terms and conditions for employees
• Government takes a passive role during the collective bargaining process
• Both endorse policies that protect workers’ rights (e.g. free association)

Key differences between the Industrial Relations scene of these two countries.

• Singapore’s focus on cooperation partnership between employer and employee as opposed to South Korea’s adversarial relationship and between employer and employees.
• Singapore’s government intervention results in alignment of goals between employer and employee whereas South Korea’s government history of mishandled intervention results in misalignment of goals between employer and employee
• Singapore’s stable political climate as opposed to South Korea’s unstable politics
• No large-scale industrial actions have been taken in Singapore as of recent years while large-scale industrial actions still occur in South Korea
• Collective bargaining is regularly coordinated and takes place at all levels in Singapore, but most collective bargaining in South Korea happens irregularly, decentralised to the enterprise level
• Singapore’s economy centers around trade while South Korea’s economy is technology exports focused
• Singapore is on peaceful terms with its neighbors, but South Korea is still on hostile terms with their neighbor North Korea which in recent times has developed dangerous levels of military and nuclear power, regularly threating their use.

Conclusion

The industrial relations system provides the framework for cooperation between employer and employee and is the cornerstone of any productive economy. The system is influenced by numerous factors such as:

• The state and type of the local economy
• State of the political scene
• Development of technology and globalization
• Market forces
• Power distribution between employer and employee
• Types of practices used during the bargaining process
• External environmental forces

Despite their similarities, the difference between the economy type, political scene, government practices and social dynamics between Singapore and South Korea make it hard to make conclusive comparisons between the two. The biggest contributors to their differences is the type of relationship employers and employees share (Partnership vs Adversarial) and type of economy (Trade vs Export).

References

1. Government of the Republic of Singapore. (2004, January 1). Industrial Relations Act, REVISED EDITION 2004. Retrieved January 13, 2018, from https://sso.agc.gov.sg/Act/IRA1960#pr17-
2. The Financial Times Limited 2018. (2017, June 26). South Korea unions ramp up pressure on Moon over labour reform. Retrieved January 14, 2018, from https://www.ft.com/content/b5a34786-5a36-11e7-9bc8-8055f264aa8b
3. Sukhwan, C. (2007). ‘Employee Representation System in South Korea. Decentralizing Industrial Relations and the Role of Labour Unions and Employee Representatives. AH Alphen aan den Rijn: Kluwer Law International, 169-185.