Strike hits Standard Chartered's S. Korean unit

27th June 2011, Comments 0 comments

Thousands of workers at Standard Chartered bank's South Korean unit launched an indefinite strike on Monday in protest at management efforts to push ahead with a performance-based pay system.

About 3,000 unionised workers of SC First Bank -- almost half its employees -- have joined the stoppage, said union leader Kim Jae-Yul, but the bank said all branches would stay open.

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 told AFP, 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 labour 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 labour unions".

SC First Bank said 2,500 out of 6,500 staff were on strike. The company has sent 300 workers from its headquarters to branches to maintain normal operations, a spokeswoman said.

"All our branches will be open... we are trying to minimise any disruptions in customer service," said spokeswoman Joo Hee-Sun.

"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.

Joo said the bank's latest proposal offers a 5 percent rise on average basic pay, and an increase of 10 percent with the new incentive scheme.

"The bank is committed to adopting a fair performance system that promotes employment stability and the bank's long-term growth," she said.

© 2011 AFP

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