[Editorial] Labor reform

Under the incoming government, big business groups engaged in unfair labor practices are likely to face mounting pressure to clean up their act. Thus far, some of their old practices have been tolerated, but not anymore.

In her Lunar New Year message, President-elect Park Geun-hye renewed her resolve to change the “wrong” practices of the past to usher in a new era. Although she did not mention any specific field where such corrective action was needed, she repeatedly stressed on the campaign trail the need to reform corporate labor practices.

Taking their cue from the president-elect, government agencies have already started to ratchet up pressure on business groups.

Last Thursday, the Seoul Regional Labor Administration made an unusual move. It raided the headquarters and several stores of E-Mart, the nation’s largest supermarket chain, to search for evidence of illegal labor practices.

The raid was a follow-up on a special labor audit conducted last month, during which inspectors found that the retail giant spied on its employees to prevent them from joining the company’s union.

According to news reports, E-Mart, the flagship of Shinsegae Group, one of the nation’s top 20 conglomerates, is suspected of constantly monitoring employees believed to be critical of management.

The retail chain operator reportedly classified its employees into four groups based on their attitude toward the company.

E-Mart is also alleged to have monitored employees’ conduct off the job, such as their relationships with the opposite sex, thus invading their right to privacy.

Allegations against the company also include the unfair dismissal of “problematic” workers and attempts to lobby government agencies, such as the Ministry of Employment and Labor and the Fair Trade Commission, to cover up its illegal practices.

If all these allegations turn out to be true, E-Mart would be punished not just for unfair labor practices but for violating the laws on privacy and bribery.

Two days prior to labor authorities’ raid on E-Mart, Chung Yong-jin, vice chairman of Shinsegae Group, was questioned by prosecutors for 12 hours over the group’s alleged illegal support for its bakery unit.

The prosecution’s investigation followed the FTC’s slapping last October of 4 billion won in fines on the group for unfairly backing the bakery, called Shinsegae SVN. Chung is suspected of having told group affiliates, including Shinsegae department stores, to give preferential treatment to the bakery.

The ordeal for the chaebol tycoon does not end here. Together with his sister, Chung is also facing trial for his refusal to attend parliamentary hearings, which were held last fall on conflicts between discount store chains and smaller retailers at traditional marketplaces.

The labor office’s action against E-Mart had other chaebol owners on edge as it came following the imprisonment on Feb. 1 of Chey Tae-won, head of SK Group, the nation’s third-largest chaebol conglomerate.

He was put in prison right after the court sentenced him to four years behind bars for embezzling $45.6 million in company funds.

But the raid should not be seen as chaebol bashing. Rather, it should be seen as a clarion call for voluntary efforts to change unwholesome practices.

Pressure on chaebol groups also comes from the prosecution. Last month, prosecutors in Ulsan said they had reopened an investigation into the long-standing labor strife at Hyundai Motor.

The dispute involves in-house subcontractor workers ― employees who are hired by Hyundai Motor’s subcontractors but work under the direct control of the automaker, just like its regular employees. These workers have persistently demanded that they be treated as regular staff.

Prosecutors first investigated the case in 2004 at the request of the Labor Ministry but closed it in 2006 without indicting any Hyundai official. In 2010, the Supreme Court ruled in favor of a former in-house subcontractor worker who filed a complaint against Hyundai Motor. But the car producer ignored the ruling, fueling protests by his fellow irregular workers.

The message in prosecutors’ move is unmistakable: Illegal labor practices will no longer be tolerated.

It’s time for business groups to review their labor practices and throw away unfair ones. They should show that they truly respect workers’ rights. This will pave the way to tripartite talks among labor, management and government on resetting industrial relations and promoting other reforms.