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Allianz Korea is on strike for 199 days.Status of ethical management in Allianz Life Korea regarding recent strike
2008/08/08 14:35

source : “Multinational Corporate Social Responsibility”(Especially about Allianz Life Korea case)by KANG Su-Dol (Professor of Korea University)

Failure of building trust between Labor and Management ? Neglecting inside customers, Deficiency of advanced management

The conflict of Allianz Life Korea came outside with ‘the implementation of performance related pay’ on January 21st 2008. Labor & management agreed about the introduction of performance related pay in 2005,2006 but the final model of pay system was not agreed. Negotiation of wages was linked with negotiation of performance related pay; the company raised 3.5% of pay additionally in 2006 in terms of giving up the allowance of monthly leave eternally. Allianz Korea had the freezing of wages in 2004, raised 14% in 2005 and 8% in 2006 (including 3.5% compensation for the waiver of allowance; 11.5% in 2006). Average raise of 3 years (2004~2006) is 7.3% of basic pay. But the company included 3.5% compensation for the waiver of allowance and made average rate of 2 years (13% per year; 2005~2006) and claimed that it raised the basic pay very much for the implementation of performance related pay.

So, Labor Union indicated the problems of company’s suggesting performance pay system and tried to get to the agreement by negotiation. But the company compulsorily applied 7.5% raise for the wages of 2007. Without agreement of Labor Union, the company insisted to pay the salary discriminately dividing into 5 grades of employees’ performance. Labor Union could not agree with this idea. Despite a lot of meetings for the renewal, union and company had never made agreement. So the union applied for the mediation in a labor trouble of the National Labor Relations Commission on April 23rd 2007, The National Labor Relations Commission decided to end the mediation without suggesting any proposal because of big difference between labor and company on May 14th.After the end of mediation, over 20 times negotiations were proceeded during May 15th ~ November 14th 2007. But the company insisted consistently that there could be negotiation only after setting the introduction of pe! rformance-related pay as a premise. So the union put to the vote for strike for two days (November 20~21 2007) about “the renewal of collective agreement, productivity bonus and regular promotion”. 1,008 union members out of 1,086 on the resister voted and 95.5% of the voters were agreed for strike. Union reported the strike to the south branch office of Seoul Regional Ministry of Labor. After that, union started the struggle of a work-to-rule and picketing.

On the process of this, the company concluded that the union abused the right of Agreement [distort] and the company announced the CEO message on January 17th and implemented compulsorily the performance-related pay without agreement of union on January 21st 2008. The performance related pay of Allianz Korea divides employees’ performance into 5 grades and pay the salary differently for each grade. But the labor union went into the strike pitching tents at headquarter, underground parking lot against the compulsory implementation of performance related pay: ’discriminated pay of basic salary & performance bonus’. The strike came into the spotlight because it was the first large-scale strike since the president LEE Myung-Bak government.
The company claimed, “the withdrawing of performance-related pay was the essential part for control of the company and could not be the object of strike” [deny, deceive]. The company insisted that “the conflict for power could not be settled by strike” [dominate, distort] and also claimed that “the mediation of the National Labor Relations Commission and the vote of union members was not for the withdrawing of performance-related pay that was pointed as the main reason of the strike by union so the strike was out of order” [deny, distort

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