Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Minimum Wage Fixing Convention, 1970 (No. 131) - Republic of Korea (Ratification: 2001)

Article 4(3)(b) of the Convention. Appointment of independent members of a minimum wage fixing body. The Committee notes the comments of the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU) dated 12 June 2012, and the Government’s reply dated 26 September 2012 concerning the application of the Convention.

According to the allegations of the FKTU and KCTU, the Government’s decision to appoint nine public interest members of the 9th Minimum Wage Council (MWC) unilaterally, without any consultations with labour and management organizations, violates the Convention, which calls for the appointment of independent persons after full consultation with representative organizations of employers and workers concerned, where such organizations exist and such consultation is in accordance with national law or practice.

The two workers’ organizations also indicate that although the Minimum Wage Act does not specify the procedure for recommending the public interest members of the Council, efforts were made up until 2008 to appoint the public interest members in a manner similar to that followed for the appointment of public interest members to the Economic and Social Development Commission (ESDC). According to the Act on Establishment and Operation of the ESDC, public interest members are appointed by the President following the recommendations of workers’ and employers’ organizations.

According to the FKTU and KCTU, the qualifications of the nine public interest members are crucial for minimum wage negotiations since they represent the neutral group between the labour and management sides, especially since recent wage negotiations have proven difficult. They also indicate that measures should be taken to diversify the profile of the nine public interest members since at present they are all professors from the same university. Finally, the FKTU and KCTU maintain that the MWC as a social agreement body independent of the Government should be composed and operated in a democratic way, and to this end, new draft legislation for the revision of the Minimum Wage Act has been submitted to the National Assembly.

In its reply, the Government draws attention to the provision of Article 4(3)(b) of the Convention, which requires consultations only to the extent that such consultations are prescribed by national law or established in practice. In this connection, it refers to the negotiating history of this provision which shows that an unqualified consultation requirement was a major concern for many countries and therefore the reference to national law or practice was introduced to provide flexibility. In the Government’s view, therefore, Article 4(3)(b) of the Convention cannot be construed as meaning that a member State is obliged to undertake full consultations with labour and management before appointing independent representatives, if such consultation is not specified by national law or does not exist in national practice. The Government accordingly states that consulting workers’ and employers’ organizations prior to the appointment of the public interest members of the MWC is not provided for in the Minimum Wage Act and it has never been part of national practice, and therefore the allegations of the FKTU and KCTU are grounded on an incorrect interpretation of Article 4(3)(b) of the Convention.

In addition, the Government describes the process of minimum wage negotiations within the MWC, and the role of public interest members as mediators seeking a compromise between the workers’ and employers’ proposals, which underscores the importance of professionalism and independence on their part. In the Government’s opinion, if workers’ and employers’ organizations had a right to recommend public interest members, the independence and impartiality of those members would be seriously undermined.

Finally, with regard to the proposed revision of the Minimum Wage Act according to which labour, management and the administration would select three public interest members each, the Government considers that this would be tantamount to having 12 workers’ members, 12 employers’ members and three public interest members of the Council thus tilting the balance of its tripartite composition.

The Committee takes due note of the comments of the FKTU and KCTU and of the Government’s response. The Committee observes that the Convention requires full consultations with representative employers’ and workers’ organizations prior to the appointment of independent experts to a minimum wage fixing body only where such consultations are either expressly provided for in national laws or regulations or clearly established in practice. This conclusion is also reflected in paragraph 222 of the 1992 General Survey on minimum wages while the same view was expressed in an informal opinion given by the Office in 1980 at the request of a country.

In addition, the Committee considers that under this Article of the Convention, specific competence and impartiality are key qualifications of the members representing the general interest of the country – a point that is also found in Paragraph 9 of the Minimum Wage Fixing Recommendation, 1970 (No. 135), which refers to “suitably qualified” and “independent” persons. Therefore, based on the Government’s explanations that consultations prior to the appointment of the public interest members are neither provided for in the minimum wage legislation nor established in practice, the Committee is of the view that the selection process and working method of the Minimum Wage Council are consistent with the requirements of Article 4(3)(b) of the Convention.

However, the Committee feels obliged to recall the fundamental importance of genuine and effective consultations with the social partners for the smooth operation of the minimum wage fixing process. The Committee trusts that in the interest of promoting constructive social dialogue, the Government and the social partners will engage in open and good faith discussions with a view to examining possible adjustments or improvements to the existing system of minimum wage negotiations in order to enhance efficiency, prevent conflict and build confidence.

In addition, the Committee is raising other points in a request addressed directly to the Government.