A rally by workers from the Korean Confederation of Trade Unions and the Federation of Korean Trade Unions in opposition to the performance based pay and termination system on September 29. (Source: Voice of People)
By Dae-Han Song | November 30, 2016
After nearly 22 years, unions went out on strike together, September 27, 2016. Sixty thousand members participated in a series of coordinated rolling strikes through the public sector from hospital to subway and train workers. Such furor was prompted by the introduction of the performance related pay and termination system (PRTP) that threatens the very foundations of the labor movement; collective bargaining and worker unity. This attack against public service workers by the Park Administration is part of its larger plan of restructuring Korea’s labor market, weakening worker’s negotiating power by making employment even more precarious. The unions are fighting back against this privatization of the public and, with public opinion behind them, they are winning concessions and building power.
“If the performance related pay and termination (PRPT) system is passed, we will be sent back to before the great union struggles of 1987, when you did as you were told and received what you were offered,” warned President Jo Sang Soo of the Korean Public and Transport Workers Union (KPTU) – the multi-sector umbrella whose affiliate branches make up the bulk of those striking. The year 1987 marked a watershed moment in Korea’s democracy and workers’ movements. Hundreds of thousands took to the streets (the culmination of decades of organizing) demanding and achieving direct presidential elections. The political shockwave rippled into strikes nationwide. A year later, where previously individual workers stood alone against the repression from the government and management, now workers organized into 3,800 new unions armed with the power to strike and engage in collective bargaining. The PRPT threatens to undo all these gains by neutralizing unions. Not only does it displace a union’s most fundamental tool – collective bargaining – with pay based on individual performance, it also arms management with a powerful tool to destroy worker unity: competition.
Park’s PRPT is part of a larger effort to cut the public budget and flexibilize  the labor market. Faced with the growing demand for social services of an aging population, instead of increasing taxes on the chaebols (Korea’s corporate conglomerates), the Park Administration slashed the public budget in 2014 by reducing benefits for public service workers, established a salary ceiling in 2015, and this year, introduced a performance related pay system that would incentivize cost savings under “efficiency” and “productivity” and facilitate the firing of workers and the breaking of unions.
The PRPT would determine 15-30 percent of a worker’s salary by evaluating workers’ performance on a curve. The top 10 percent would be placed on the 1st tier; the next 20 percent, on the 2nd; the next 40 percent, on the middle; the next 20 percent, at the 4th tier; and 10 percent at the lowest tier. After three successive evaluations at the lowest tier, a worker would be fired or transferred. As the evaluators, this would give management a powerful tool to divide workers and pressure union members while displacing collective bargaining with individual performance based pay.
Making a Killing
One of the most well-known cases of performance related pay and termination system is Korea Telecom (KT) – South Korea’s largest Telecom agency and among its top twenty conglomerates. In 2009, KT enacted the performance based pay and termination system. From 2009 to 2013, 23 workers committed suicide earning KT the nickname “the killer company.” Lim Hee Chan, a KT union member, describes the system and the stresses that lead to the suicides, “It wasn’t those getting the Fs who were committing suicide or quitting, it was others after failures or unable to meet a certain performance requirement who were affected.” Lim’s union activities have earned him Ds and Cs: “They don’t give me Fs because that would be excessive.” Even bullying has its limits.
The performance related pay and termination system not only threatens workers, it fundamentally transforms their role as public servants. “What we fear is that we have to work driven by money. This muddles the values of the public worker,” explains Pak Gyeong Deuk, Vice President of the Seoul National University branch of the Korean Health and Medical Workers’ Union (SNU Hospital Workers Union). When workers are incentivized to cut costs and increase revenue, it undermines their public service. Under the pretext of depleted funds, the hospital implemented a type of performance based evaluation system in 2013 under the pretext of “emergency management.” Departments were encouraged to cut costs and increase revenue. The departments were then ranked by their success with the best being rewarded an expensive meal at a hotel. The patients had foot the bill: “We started using cheaper lower quality supplies like needles and gloves that endangered patients” and patients were encouraged to take on more examinations which increased “the money spent per patient.”
Kim Eeh Won, a super-delegate for the maintenance branch of the Seoul Metropolitan Rapid Transit Corporation (SMRT), explains that the PRPT endangers passengers’ safety by eroding the cooperation between maintenance workers necessary to keep the trains safe and encouraging workers to hide and pass on their mistakes lest they be rated poorly: “The maintenance may look good from the outside, but it would be rotting in the inside.”
Workers Fight Back
It is no surprise that such an existential threat reenergized the fighting spirit of unions. For Pak (SNU Hospital Workers’ Union) it was only such threat that could bring the various unions together to strike together for the first time in 22 years. They are aided by a public that has grown distrustful of the government for its broken promises and a presidential corruption/nepotism scandal.
The PRPT has not yet been eliminated, but the unions are winning concessions from management, while organizing and educating workers and winning over public opinion. The Seoul Metropolitan Rapid Transit Corporation worker’s union and the Seoul National University Health and Medical Workers’ Union were among the KPTU affiliated unions that were able to win concessions from their strikes. The SMRT worker’s union was able to reach an agreement with the more liberal and labor-friendly Mayor of Seoul Park Won Soon: The system would be implemented with the approval of the union. Kim wonders if this was maybe a politically palatable way of effectively gutting implementation of the PRPT while still “appeasing those that support the PRPT.” In other words, at least for now, they have stopped the PRPT. The SNU Hospital Workers Union reached an agreement, after striking for 18 days, that eliminated the termination provision of the PRPT and staved off implementation until after 2017. “2017 is important to us because the Park government which is pushing this will be out of office,” explains Pak. As the Park administration is the one pushing for these measures, it appears that their struggles are inextricably connected to a larger political struggle to change the ruling party. A struggle further fueled by public outrage at a presidential scandal.
A Radical Imagination
If the carrot and stick approach of the PRPT is not the way to improve public service, then what is the solution? The answer may reside in a revolution on the other corner of the world centered around the needs of people: Venezuela’s social missions. Even as the Venezuelan government wages a fierce struggle to save the Bolivarian Revolution (started in 1999) from economic sabotage by an economic elite with US support, even as it stumbles to find efficiency and efficacy in its own governance, it has created a new model of social welfare with design, implementation, and accountability based on people’s protagonism, participatory democracy, and repayment of the social debt. People, organized into councils (of workers, students, community) are empowered to participate in the provision of services that address the social debt of poverty, sickness, and illiteracy from decades of neoliberalism. People are not simply recipients of services but they are also active in its governance and implementation. Hospitals involve community councils in their health education and campaigns; universities are governed with input from student councils; factories work in consultation with worker councils. While South Korea doesn’t have oil revenue (which funds the missions) like Venezuela, it nonetheless has great wealth in the profits of its conglomerates. Such profits have allowed the top thirty conglomerates to accrue 754 trillion won (nearly $680 billion) in capital assets – equivalent to nearly half of South Korea’s GDP. Expropriating corporate profits through taxation could provide services without compromising quality. There’s still a long and hard road ahead. If this journey of a thousand miles is completed a step at a time, then the performance-related pay and termination system would take us backwards.
Special thanks for their time, insights, and fight to Kim Eeh Won, super-delegate of the Maintenance Branch of the Seoul Metropolitan Rapid Transportation; Pak Gyong Deuk, Vice President of the Seoul National University branch of the Korean Medical and Hospital Workers Union; Liem Wolsan, Director of International and Korean Peninsula Affairs of the Korean Public and Transportation Workers; and Choi Dong-joon, Chair of the Mechanics branch of the Seoul Subway Workers’ Union.
Dae-Han Song is Chief Editor of the World Current Report, published by the International Strategy Center in South Korea, and a KPI fellow.
 Liem Wolsan, Director of International and Korean Peninsula Affairs of the Korean Public Service and Transport Workers’ Union, explains that while the original plan was to pass this labor market reform across the whole economy, that the loss of the Saenuri (the conservative ruling) Party’s majority in the National Assembly triggered this desperate attempt by the Park Administration to bypass the legislative process and issue guidelines for the public sector. The Park administration’s ability to hire and fire the heads of these public corporations gives it tremendous power in implementing its policies.
 About half of Korea’s workforce is comprised of irregular workers – fixed contract employment that makes it easy to terminate employment.
 Flexibilizing the labor market refers to restructuring it to make the hiring and firing of workers easier. In other words, it means replacing full time workers with fixed-contract workers.
 Pak explains how the depleting budget of the hospital was a result of the hospital spending its budget on construction of hospital expansion.
 The last general strike took place in 1994 when the government railroaded a bill making it easier to fire workers