Democracy at work: Employee board participation

By Dae-Han Song (Chief Editor, The [su:p])

[Representative from workers, management and the city sign the ordinance for employee board representation (Source: Labortoday.co.kr)]

On Jan. 6, for the first time in Korea, the Seoul Research Institute appointed an employee to its board of directors. Twelve of Seoul City’s other public corporations will follow. While restricted to a minority presence, the employee directors will, nonetheless, have full rights and authority in setting a company’s vision and policy. The basis for employee board representation is an ordinance passed by Mayor Park Won-soon last year. During a time when government policies 1 favor management while making the lives and existence of workers and unions more precarious and difficult, representation at the board of directors – the highest level of management – can be a powerful weapon for workers. Yet, designed out of political negotiation with built in limitations, the weapon needs refinement, and its wielder needs mastery.

The ordinance passed on Sept. 29 2016 mandates Seoul City public corporations with over 100 employees (13 in total) to introduce an employee-elected, mayor-appointed employee board director. The ordinance is part of the mayor’s larger efforts for transparency in city governance and communication between the city, management, and workers. 2 Requirement to run for the position is employment for at least a year. Public corporations with less than three hundred employees must have one employee director. Those with more must have two. The number must not to exceed ⅓ of the board. 3

The employee’s rights and authority as board director for a three year term is limited by his/her minority status (not to exceed ⅓ and oftentimes much less than that 4). Nonetheless, such presence is an important weapon in the fight to democratize the workplace. Not only can an employee director bring the opinions, grievances, and feedback of workers to  the board, but they can also provide valuable information from the board to workers and the union. Naturally, the greater communication minimizes unnecessary conflict between workers and management. It also allows for policy that is more effective and consistent by providing an opportunity to include workers’ experiences and feedback. Having those on the ground heard on the top means more effective policy and greater accountability and transparency in management.

Nonetheless, the fact that this system emerged out of negotiation between workers, management, and the city explains its built-in limitations that still need to be refined out through practice and struggle. The first limitation is a clause that employee board directors must revoke their union membership. 5 In addition, the election of the employee board directors by workers is marred by giving the mayor final appointment power. 6 When both these limitations combine, it is possible for an employee board director to be elected that does not represent the vote of the workers and is estranged from the union. These limitations must be addressed and fought against lest the employee board director competes, rather than cooperates, with unions in representing the voice of workers. Such situation might create the conditions for an employee board director to fall prey to the influence of the rest of the board rather than representing the voice of workers.

While it is still too early to tell how implementation of employee board participation will impact the workplace, we can peer into the Seoul Research Institute to examine its potential. On Dec. 12 last year, 234 workers voted, after a two week campaign that involved 30 nominees. The top two candidates were proposed to the city, with the mayor choosing and appointing Doctor Bae Jun-sik, 7 the candidate that at 53.4%, had won the majority of votes. As an employee board director, Bae plans to work closely with the research institute’s employee association. 8 He promised to extend the benefits of regular 9 workers to all the workers, to increase communication between workers and management, to increase employment security for the master’s degree level researchers, and to improve working conditions. After becoming board director, the management suggested creating a task force exploring turning irregular workers into regular ones and improving the conditions of irregular workers. All these point to a best possible start as regards to appointment, cooperation with the association of employees, and cooperation from management.

In our larger struggle to build a society where workers can live with dignity and power, the employee board representation system provides an opportunity with great potential. Yet, an opportunity becomes a victory only after it’s won. In that regard, the employee board representation system has yet to be won. Only as workers and union wield it, fight for its refinement, can this become a valuable weapon to achieve democracy at work.

Bibliography

Conchon, Aline. Board-level employee representation rights in Europe: Facts and trends. Accessed  at https://www.etuc.org/IMG/pdf/2011_ETUI_Report___Board_level_employee_representation_rights_in_Europe.pdf  

Bae Jun-sik, PhD. Seoul Research Institute. Email interview on Jan. 19, 2017.

Kim Sook-hye. Seoul City Team Leader of Public Corporations. Phone interview on Jan. 23, 2017.

Opengov.seoul.go.kr. “근로자이사 1호” 배준식 이사를 만난다 (Meeting employee board representative #1 Bae Jun-sik). Jan. 7, 2017. Accessed at http://opengov.seoul.go.kr/mediahub/10828164   

Park Tae-ju. 한국에서 ‘근로자이사제’의 도입은 어떻게 가능한가 (How was Korea’s introduction of the “employee board representation” possible). Nov. 9, 2016. Accessed at http://klsi.org/content/8530

Seoul City. 서울특별시 근로자이사제 운영에 관한 조례. Ordinance for operation of Seoul Metropolitan City’s Employee Board Participation. Accessed at http://www.law.go.kr/DRF/lawService.do?OC=poweresca&target=ordin&MST=1254039&type=HTML&mobileYn= (cannot be directly accessed, must be initially searched for at http://legal.seoul.go.kr/legal/front/page/existing.html)

Notes:

  1. As the city was introducing the employee board representative tens of thousands of workers were going on strike against their management’s implementation of the government’s performance based pay and termination system.
  2. The ordinance uses the wording of employee rather than worker. The author prefers the term worker, but given the wording of the system as employee, both terms will be used interchangeably, unless otherwise specified.
  3. It is important to note that even the European model that inspired Seoul City’s employee board representation system gives final word on decisions to the board of directors representing shareholders’ interests.
  4. Most public corporations’ board of directors have 8 to 11 directors meaning that even if there are two employee directors, their proportion would not exceed 25%.
  5. The twisted rationale behind this requirement is a labor union law that stipulates that when someone representing the interests of management joins a union then that union is no longer recognized as a union. While this law proves valid in preventing management from infiltrating and controlling unions, the application of such law into an employee board director that is meant to represent the voice of workers in the board rather than the other way around  goes counter to the original intention of this law.
    It’s important to note that in the European model the employee board director is either chosen by a union or has close ties with it. In neither case is the employee board director forced to withdraw their union membership.
  6. A special election committee presents a pool of candidates twice the size as the final number of appointees based on the results of the election. The mayor appoints the employee board representative from this pool. For example, appointment of two employee board directors would require a pool of four candidates.
  7. Doctor Bae Jun-sik is part of the Department of Urban Management Research at the Seoul Research Institute.
  8. The research institute does not have a union but instead has an employee association.
  9. Regular workers refers to those that are hired on a permanent basis rather than on an annual contract basis. In that regard, regular workers make up the core of a work team, with irregular workers being hired for yearly contracts.

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