Tue, Jun 28, 2011 - Page 10 News List

Standard Chartered S Korea unit strikes over incentive pay

AFP, SEOUL

Thousands of workers at Standard Chartered bank’s South Korean unit went on strike yesterday in protest at management efforts to push ahead with a -performance-based pay system, a union chief said.

About 3,000 unionized workers of SC First Bank — half its employees — have joined the strike, union leader Kim Jae-yul said.

Kim said management had refused to negotiate annual pay rises unless employees agree to a new performance-based wage system instead of the seniority-based compensation prevalent among South Korean firms.

“The management said it won’t discuss a pay raise unless we agree that the new compensation system begins in January 2012,” he said, calling the condition “unacceptable.”

SC First Bank, established in 2005 after the Asia-focused British-based banking group acquired Korea First Bank, is the first bank in South Korea officially to push a performance-based pay system.

South Korean firms trying to dump traditional seniority-based compensation have often faced intense opposition from workers who worry that a change would make job cuts easier.

The Korea Financial Industry Union, an umbrella union for bank employees, denounced SC First Bank for “pushing the labor union and workers over the edge of a cliff.”

It said in a statement that performance-based pay “can be never accepted, since it is a serious threat to the job security of our union members and can ruin the very foundation of labor unions.”

The bank has sent 300 workers from its headquarters to branches to maintain normal operations, its spokeswoman said.

“All our branches will be open ... we are trying to minimize any disruptions in customer service,” spokeswoman Joo Hee-sun said.

“We will focus on offering essential banking services for customers instead of trying to sell [new financial products],” she said, adding IT-related workers had not joined the strike and would maintain normal online operations.

The bank will continue with the plan to adopt performance-based pay despite the dispute, she said, adding she could not give a figure for the number of workers on strike.

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