Between Fragmentation and Centralization: South Korean Industrial Relations in Transition

Abstract

This study investigates profound changes in South Korean industrial relations after the Asian financial crisis of 1997. Korea's neoliberal labour reforms have produced a large number of non-standard workers, deepening the union representation gap. Realizing that the fragmented enterprise unions could not adequately protect workers from this degradation of labour, trade union leaders began a major organizational drive at the industry level and tried to institutionalize sectoral bargaining. A political space for union centralization was partially opened because the state needed labour's co-operation to implement neoliberal reform packages. However, disorganized centralization in Korea, where important decisions on wages and working conditions have been negotiated mainly at the company level, has faced limitations in achieving meaningful changes in the dualistic structure of the labour market. This study concludes with a review of changes in Korea's labour law in 2010 and a discussion on the effects of the law on bargaining rights of non-standard workers and the incipient industry-level bargaining. This trend towards union centralization may continue, but the notable gap between the formal bargaining structure and actual practice is expected to widen. © 2011 Blackwell Publishing Ltd/London School of Economics.