Daejeon and Busan Abolished Bonuses and Reformed Wage Systems
Seoul Bus Union: "Management's Proposal Is Different"
Seoul Metropolitan Government: "Similar in Terms of Converting Bonuses to Base Salary"
As negotiations over collective wage agreements remain stalled due to the issue of ordinary wages between city bus labor and management in Seoul, differing interpretations have emerged between the Seoul Metropolitan Government and the labor union regarding the wage system reforms implemented in Daejeon and Busan. The city government views the recent proposal by Seoul bus management as similar to those cases, in that it involves abolishing bonuses as part of wage system reform. However, the union argues that the management's proposal does not recognize bonuses as part of the ordinary wage.
On May 30, the Seoul City Bus Labor Union asserted that the 2012 wage system reform in Daejeon is entirely different from the plan currently proposed by the Seoul Bus Transportation Business Association. In Daejeon, bonuses were abolished but recognized as part of the ordinary wage. In contrast, the Seoul bus association’s approach does not recognize bonuses as part of the ordinary wage, but instead eliminates bonuses and compensates for this by increasing base salary and allowances.
Previously, in 2012, Daejeon’s city bus labor and management converted bonuses, summer vacation allowances, and driver insurance premiums into the base salary, resulting in a 3.2% wage increase. Following the wage system reform, a separate wage negotiation led to an additional 3.75% increase in base salary, resulting in a total wage increase of about 7%. The current proposal from Seoul bus management sets the average annual salary of 62 million won as the 'total amount' standard. Within this framework, bonuses would be converted into base salary, after which a second stage would involve negotiating the wage increase rate. The Seoul Metropolitan Government believes this two-step process?wage system reform and base salary increase?is essentially the same as the Daejeon model.
The union also pointed out that if bonuses are recognized as part of the ordinary wage and converted into base salary, as was done in Daejeon, there should be a natural increase in wages. However, the management’s proposal does not provide for this. The union stated, "According to the Supreme Court ruling, wages would increase even without any action, but the Seoul Metropolitan Government and management are asking us to forgo this increase."
In Busan, where a collective wage agreement was signed on May 28, bonuses and summer vacation allowances were eliminated and incorporated into the base salary, which alone resulted in about a 10% wage increase. The union commented, "In Busan, the wage table was simply adjusted to reflect the automatic increase." The Seoul Metropolitan Government, meanwhile, emphasized that the Busan case was also based on wage system reform and urged, "We hope labor and management in Seoul will engage in serious discussions within this framework."
Management also maintains that specific increase rates and formulas should be resolved through negotiation, but that priority should be given to reaching an agreement on wage system reform. A representative of the bus association stated, "This year’s collective bargaining proposal from the association is to abolish bonuses and incorporate them into base salary, as was done in Daejeon and Busan, while the union insists on retaining bonuses. If the union agrees to convert bonuses into base salary, we are ready to resume negotiations at any time. Once negotiations resume, only the rate of increase needs to be discussed at the table."
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