South Korea may push ahead with the controversial move to mandate labor representative in the management board starting with public enterprises after a tripartite committee on labor-management issues approved of the idea.

According to Maeil Business Newspaper’s investigation from related government offices, the presidential Economic, Social and Labor Council gave a go-ahead to the idea of the ruling party and government proposing to seat one or more labor board members in state enterprises, which employers strongly protest as interference in management rights.

There are three bills pending at the legislative proposing labor addition to the management board.

The motion by ruling Democratic Party lawmaker Kim Kyung-hyup is closest to the government outline.

Kim proposes to seat minimum one non-permanent board member at the recommendation of the union or employees at 131 state or semi-state institutions out of total 340 public enterprises.

The finance and economy ministry proposes the member to be picked from employees for a non-permanent seat as an outsider upon recommendation could represent voices of umbrella trade union rather than the employees.

If the new mandate takes place, state utility Korea Electric Power Corp. (Kepco) could be first to comply. Other state utilities under Kepco including Korea Hydro & Nuclear Power Co. would follow suit.

State-invested lenders like the Industrial Bank of Korea (IBK) would be next contestants. The move is feared to add to the country’s notorious labor unrest and conflict.

Lee Byung-tae, professor of business management at Korea Advanced Institute of Science and Technology (KAIST), said labor board representation could be risky when trust between management and union is low and may interrupt management with rampant court challenges.

By Oh Chan-jong, Lee Sae-ha, Yoon Ji-won, and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]