Heo Young-in, chairman of SPC Group, and group officials have been brought to trial on charges of urging Paris Baguette bakery workers affiliated with the Korean Confederation of Trade Unions (KCTU) to withdraw from the union and ordering disadvantages against them.
The Public Investigation Division 3 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Im Sam-bin) indicted Chairman Heo on the 21st on charges including violation of the Labor Union and Labor Relations Adjustment Act and detained him. On the same day, 17 others, including SPC Group executives who participated in the crime under Heo's orders, employees and the corporation of PB Partners Co., Ltd., were also indicted without detention. Including Hwang Jae-bok, CEO of PB Partners Co., Ltd., who was indicted in detention on the 22nd of last month, a total of 19 SPC-related persons, including the corporation, will face trial in this case.
The indictment targets include SPC Group Advisor Seo, Vice President Kim, Head of Communications, Vice President Kim, Head of External Cooperation, Executive Director Baek, Head of Public Relations, Executive Director Jeong, Chief Labor Officer of PB Partners, Executive Director Jeong, Head of Quality Control, Deputy General Manager Kang, heads of eight business divisions, and the chairman of the PB Partners union affiliated with the Federation of Korean Trade Unions (FKTU) Food Workers' Union.
Chairman Heo and others are accused of urging about 570 union members to withdraw from the KCTU-affiliated union within PB Partners, an SPC subsidiary managing bakery workers, after the union condemned the company's union suppression and continued critical activities urging the implementation of the 'social agreement.'
They were also investigated for giving lower scores in promotion evaluations because of union affiliation with KCTU and supporting the recruitment of union members for the FKTU-affiliated union, which was favorable to management.
Jeong, the Executive Director and Chief Labor Officer, was instructed to continuously provide lists containing bakery workers' workplaces and union affiliations to the chairman of the FKTU-affiliated union to facilitate the withdrawal work from the KCTU union. Both Jeong and the former chairman who received the list were also charged with violating the Personal Information Protection Act.
SPC Group operates the largest bakery franchise in Korea, deploying about 5,300 bakery workers employed by 11 partner companies nationwide to each store. The KCTU-affiliated union within the company claimed this was illegal dispatch.
Following a labor inspection by the Ministry of Employment and Labor, illegal dispatch was recognized, and about 16.2 billion KRW in fines were imposed due to non-compliance with corrective orders such as direct employment. As negative public opinion formed, SPC Group sought to resolve the issue by signing a 'social agreement' in January 2018 with participation from management, the two major unions, franchise owners, the National Assembly, and civic groups, and established PB Partners.
The social agreement at that time included ▲ direct employment of illegally dispatched workers through subsidiaries ▲ promise of equal pay within three years with headquarters employees ▲ correction of unfair labor practices (such as urging to join a specific union) and expression of regret regarding illegal dispatch.
According to the prosecution, during this process, Chairman Heo, who held resentment toward the activities of the KCTU-affiliated union, reprimanded CEO Hwang in July 2019 when the union branch chief A was elected as the workers' representative and ordered to make the FKTU-affiliated union the majority union to deprive A of the workers' representative status. Following this order, CEO Hwang mobilized company executives and employees to carry out the plan.
As a result, the FKTU-affiliated union's membership surged by about 900 from approximately 1,760 to 2,660 in just about six weeks, acquiring majority union status, and A lost the workers' representative position.
Chairman Heo also instructed CEO Hwang to carry out the withdrawal work of KCTU union members, citing concerns over brand value damage, as the KCTU union continued rallies criticizing management and urging the implementation of the previously signed social agreement. Subsequently, PB Partners executives, eight business division heads, manufacturing managers, and field supervisors, under Hwang's orders, systematically urged bakery workers affiliated with the union to withdraw.
The prosecution stated that competition arose among the eight PB Partners business divisions during the withdrawal work from the KCTU union, and rewards were even given to achieve the monthly target withdrawal numbers.
Consequently, the number of KCTU union members within the company sharply decreased from 730 in January 2021 to 336 in June of the same year, while the FKTU union increased from 3,370 in January 2021 to 3,946 in June.
Additionally, management gave 'D grades,' which in principle prevent promotion, or low scores during promotion evaluations to union members affiliated with the KCTU union to facilitate the withdrawal work, and provided personnel benefits to those who withdrew, thereby disadvantaging them in promotions.
SPC Group also decided on a policy to respond to labor disputes with the KCTU union by having the FKTU union represent management's position whenever issues surfaced externally, creating the appearance of 'union-to-union (No-No) conflicts.' When labor disputes were reported, the FKTU union chairman Jeon was made to give interviews reflecting management's stance or draft statements to quell the situation.
Meanwhile, during the investigation, it was revealed that CEO Hwang and Executive Director Baek (Head of Public Relations) bribed a prosecutor's investigator to halt the investigation into Chairman Heo and others. From September 2020 to May 2023, they received various investigation information such as search warrant requests and internal review reports and provided hospitality worth about 6 million KRW in return. The prosecutor's investigator and Executive Director Baek were previously indicted in detention on February 23 for bribery and bribery offering, respectively, and CEO Hwang was additionally charged with bribery when he was indicted in detention on the 22nd of last month, along with charges related to unfair labor practices.
A prosecution official stated, "Chairman Heo oversaw the entire group, made final decisions and orders on union response measures, and was confirmed to have led the crimes by regularly receiving reports on union withdrawal status and responses to the National Assembly and media."
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