A comparative study on industrial relations and collective ...

1 Working Paper No. 8A comparative studyon industrial relationsand collective bargainingin East Asian countriesYoungmo YoonNovember 2009 InternationalLabourOfficeGenevaIndustria land EmploymentRelationsDepartment(DIALOGUE)W orking Paper No. 8 A comparative study on industrial relations and collective bargaining in East Asian countries Youngmo Yoon industrial and Employment relations Department International Labour Office Geneva November 2009 Copyright International Labour Organization 2009 First published 2009 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to ILO Publications (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: The International Labour Office welcomes such applications.

2 Libraries, institutions and other users registered in the United Kingdom with the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP [Fax: (+44) (0)20 7631 5500; email: in the United States with the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923 [Fax: (+1) (978) 750 4470; email: or in other countries with associated Reproduction Rights Organizations, may make photocopies in accordance with the licences issued to them for this purpose. ILO Cataloguing in Publication Data Yoon, Youngmo A comparative study on industrial relations and collective bargaining in East Asian countries / Youngmo Yoon ; International Labour Office, industrial and Employment relations Department. - Geneva: ILO, 2009 1 v. (Working paper ; ) ISBN: 9789221229179;9789221229186 (web pdf) International Labour Office; industrial and Employment relations Dept labour relations / collective bargaining / East Asia The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers.]]

3 The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Catalogues or lists of new publications are available free of charge from the above address, or by email: Visit our web site: Printed in Switzerland iii Preface This paper is part of a series of studies on industrial relations developments in different countries and regions of the world.

4 It examines the current state of industrial relations and collective bargaining , as well as the varied legal, political, economic and social changes leading to the realities of employment relations in East Asian countries today. Before the 1990s these countries enjoyed relative stability in industrial relations ; however, as a result of globalization, they now face increasing competitive pressures and are experiencing a degree of turbulence as the actors attempt to settle into viable models of industrial relations . The paper provides a comparative analysis of industrial relations systems and collective bargaining practices in East Asian countries. Particularly interesting is the range of workers and employers organizations traditions and practices, in addition to the different of collective bargaining processes present in these countries.

5 In China and Viet Nam, the national trade union centre holds a monopoly over workers representation, and though this provides for political sway, it does not suggest in each case strong workplace influence. This is different from Japan and Korea which have strong traditions of enterprise trade unionism. This, too, is changing as trade unions in these countries attempt to manage the effects of global competition, the emergence of non-regular forms of employment and declining union membership. Indeed, employers organizations are faced with similar challenges. They show as much diversity in their structures as the trade unions. Often employers organizations are stand-alone bodies whose purpose is to represent their members interests with regard to labour market issues and policy through tripartite consultation.

6 However, some employers organizations are part of a broader business organization, as is the case in Cambodia. Enterprise collective bargaining is the most prominent approach in East Asia, for reasons that vary in each country. In Malaysia and Singapore, the governments imposed enterprise unionism, though recently, there has been a move towards sectoral bargaining . Importantly, collective bargaining in the public sector is seriously underdeveloped in all countries in the region, due in part to legal restrictions placed on workers. The paper s findings suggest that one must understand the history of democratization and the political background in East Asian countries particularly in the late 1980s and early 1990s in order to grasp the diversity of industrial relations and collective bargaining practices that have emerged in the region.

7 I am grateful to the author, Youngmo Yoon, for undertaking this study of industrial relations and collective bargaining developments in East Asian countries, and commend the report to all interested readers. November 2009 Tayo Fashoyin Director, industrial and Employment relations Department v Abbreviations ACFTU All China Federation of Trade Unions AUPE Amalgamated Union of Public Employee (Singapore) APINDO Employers Association of Indonesia (Asosiasi Pengusaha Indonesia) CEC China Enterprise Confederation EAB Employers Activity Bureau (Viet Nam) ECOP Employers Confederation of the Philippines FDI Foreign direct investment FKI Federation of Korean Industries FSPSI Federation of All Indonesia Workers Unions GMAC Garment Manufacturers Association of Cambodia HRM human resource management KADIN Indonesian Chamber of Commerce KCTU Korean Confederation of Trade Unions KEF Korea Employers Federation NPA National Personnel Authority (Japan) NWC National Wage Council (Singapore) NTUC National Trade Union Congress (Singapore)

8 SBF Singapore Business Federation SNEF Singapore National Employers Federation SOEs state-owned enterprises STEC State Trade and Economic Commission (China) VCA Viet Nam Cooperatives Association VCCI Viet Nam Chamber of Commerce and Industry VGCL Viet Nam General Confederation of Labour vii Contents Preface .. iii Abbreviations .. v 1. Introduction .. 1 2. Political and economic contexts of industrial relations developments in East Asia .. 2 Market economies in East Asia .. 2 Transition economies in East Asia .. 3 3. industrial relations actors .. 4 Trade unions .. 4 China, Viet Nam and Singapore: Strong political voice but weak influence at the workplace .. 4 Fragmented trade unions at both national and enterprise levels in Cambodia, Indonesia, the Philippines and 5 Gradual changes in enterprise unionism in Japan and Korea.

9 6 Employers organizations .. 8 4. collective bargaining and social dialogue mechanisms in East Asia .. 11 Tripartite social dialogue .. 11 collective bargaining in East Asia: Scope, structure and trends .. 14 Destabilization of enterprise bargaining structures .. 14 Recent evolution of collective bargaining structures in Asian transition economies .. 17 Wage negotiations in East Asia .. 20 collective bargaining in the public sector .. 23 Restriction of collective bargaining rights in the public sector .. 23 Practices of collective bargaining in the public sector .. 24 5. Conclusions .. 26 References .. 29 1 1. Introduction East Asia has been the most dynamic part of the global economy in the last two to three decades, achieving extraordinary economic growth and social transformation during this Its combined share of global GDP rose from 17 per cent in 1980 to 29 per cent in 2005.

10 The region includes major economic powerhouses of the global economy such as Japan, China and Korea the second, third and fifteenth largest economies, respectively, in the The countries in East Asia display a great degree of diversity in economic development and political structures. Thirty years ago, Cambodia, China, Laos, Mongolia and Viet Nam were still socialist planned economies. At that time, Japan was already a major global economic power, while the so-called Asian tigers Korea, Taiwan/China, Hong Kong, and Singapore were on their way to becoming middle/high-income countries, thanks to successful export-oriented industrialization programmes. Following in their stead were the second-tier tigers Malaysia, Indonesia and Thailand which had just started their journey towards industrialization.