Workers at KB Kookmin Bank, South Korea's leading lender, launched a nationwide strike Tuesday for the first time in 19 years over bonuses and wage system reforms, its labor union said.
The one-day walkout started at 9 a.m., as last-minute overnight negotiations between the labor and the management did not lead to a breakthrough.
The last time unionized workers took collective action was in 2000, when the bank acquired the Housing & Commercial Bank.
The exact numbers of participants and branches that are being affected are yet to be known, but the union said more than 10,000 members appeared to join the collective action, which crippled operations at around 600 out of 1,057 outlets across the country.
As part of an effort to minimize inconvenience to customers, the bank designated some branches as central outlets to deal with tasks of nearby affected branches, while encouraging more customers to use online and mobile services, according to the lender.
As of end-Nov., the major lender had 31.1 million customers, some 60 percent of the country's total population.
The union and the management have been wrangling over key labor issues, including rules on the wage payment system and the amount of bonuses to be given to employees for last year.
After negotiations, including arbitration attempts by the National Labor Relations Commission, went nowhere, 96 percent of some 12,000 workers voted in favor of the strike last month.
The two sides have not budged an inch over the introduction of the wage peak system in which employees get reduced salaries for several years just before retirement.
While the union calls for the starting age for the wage peak system to be delayed by one year, the management has insisted on a swifter introduction, as well as the unification of the rules for senior and junior employees. Currently, managerial-level workers have to accept their wage peak period occurring several months sooner than rank-and-file employees.
The two sides also remain at odds over the so-called pay band system that limits wage increases in case a worker fails to be promoted during a certain period of time. The union calls for its abolishment, which has been in place for new employees since 2014, while the management wants to expand its scope.
As for the annual bonus, the company has agreed to accept the union's demand of giving the amount equivalent to 300 percent of their basic monthly wages, up from its own proposal of 200 percent.
But it attached strings, including the union's acceptance of its proposal regarding the wage peak and other payment systems, a suggestion dismissed by the union.
"Since October last year, we've had more than 10 rounds of negotiations till today. But the management has simply insisted on its own positions," union leader Park Hong-bae said.
The labor union has vowed to launch several more rounds of such short-term strikes unless an agreement is reached with management.
With detailed plans being made, a two-day walkout is planned starting Jan. 31.
KB Kookmin Bank is the country's No. 1 commercial lender in terms of profits. As of the third quarter of last year, it had logged 2.08 trillion won ($1.86 billion) in accumulated net profits for the year, outrunning former champion Shinhan Bank to reclaim its previous title as the nation's leading bank.
Also on Tuesday, financial authorities held an emergency meeting to discuss ways to reduce inconvenience caused by the bank's strike.
Kim Yong-beom, vice chairman of the Financial Services Commission, told the meeting that the FSC is closely monitoring the situation to minimize fallout to customers.
In a statement, Kim voiced his "regrets" over the strike, urging the bank and its labor union to bridge differences through dialogue. (Yonhap)