South Korea: Oriental Brewery in the grip of labor dispute

South Korean brewer Oriental Brewery (OB) has been in the grip of labor dispute. OB’s labor union has gone on a general strike since Aug.16, further exacerbating labor-management dispute, Korea IT Times reported on August 23.

At first blush, the dispute seems to be caused by their disagreement over wage increases. However, some point out that it is an outgrowth of OB’s failure in reflecting the reality of the Korean liquor market after OB changed hands.

Since December last year, OB’s labor union has engaged in collective bargaining with the management more than 30 times to negotiate a pay rise. However, as the negotiations was going nowhere, the labor union decided to down tools.

The labor union claims that the management has set goals too high in order to make incentives elusive, a move that is no different from wage reductions. On the other hand, the management argues that they did not provide incentives because the goals have been attained and their incentive system exists separately from their wage system.

Since leading global brewer Anheuser-Busch InBev (AB InBev) bought back OB in 2014, OB has seen few signs of labor-management conflict letting up.

Earlier this year, the labor union filed a complaint with the Ministry of Employment and Labor against Frederico Freire, CEO of AB InBev’s Korean unit, for violations of the Working Hours Act. In May, OB's management and union agreed to let go of 111 employees through a voluntary retirement program.

Under the leadership of largest shareholder AB InBev and a foreign CEO, OB has been using English as an official language, which many think created language barriers and even worsened communication problems.

21 August, 2016