Understanding Labour Unions in the APAC Region: A Guide for Employers

Introduction

Labour unions are crucial in advocating for workers’ rights and benefits. Understanding and navigating labour union landscapes is essential for employers, especially those operating internationally; maintaining positive labour relations and ensuring compliance with local laws is of utmost importance.

Importance of Labour Unions

1. Employee Representation

• Function: Labour unions represent employees in negotiations with employers regarding wages, benefits, working conditions, and other employment terms. This representation ensures that employees have a collective voice that can advocate for their interests.
• Impact: Unions help balance power dynamics between employers and employees, ensuring fair treatment and equitable compensation. For instance, without union representation, individual employees may find it difficult to negotiate salary increases or improved benefits due to a lack of bargaining power. Unions consolidate individual concerns into a unified voice, which can effectively negotiate for better working conditions and wages, thereby ensuring that employees receive fair compensation for their labour. According to a study by the Economic Policy Institute, unionized workers earn on average 13.2% more in wages than their non-union counterparts.

2. Collective Bargaining

• Function: Unions engage in collective bargaining to negotiate contracts on behalf of their members. This includes negotiating wages, working hours, health and safety policies, and other employment conditions.
• Impact: This process can lead to better wages, benefits, and working conditions for employees but may also increase labour costs for employers. For example, through collective bargaining, unions have historically secured benefits such as health insurance, paid leave, and retirement plans. While this improves the quality of life for workers, it also means that employers need to allocate more resources to meet these demands. However, these improvements can lead to a more motivated and productive workforce, which can benefit employers in the long run by reducing turnover rates and increasing employee satisfaction. A report by the International Labour Organization found that collective bargaining can lead to better working conditions and reduce income inequality.

3. Advocacy and Support

• Function: Unions advocate for workers’ rights, provide legal support, and assist with grievances and disputes. This includes lobbying for labour-friendly legislation and policies, providing legal representation for members in disputes, and offering support during disciplinary actions or layoffs.
• Impact: They are critical in protecting employees from unfair treatment and ensuring workplace safety and compliance. For instance, unions often play a key role in reporting and addressing workplace hazards, ensuring that employers comply with safety regulations and that workers have a safe environment. Additionally, unions provide a support system for employees who may face discrimination or unfair treatment at work, offering legal assistance and ensuring that their rights are protected. This advocacy helps create a more equitable workplace and ensures that employees are treated with respect and dignity. The National Institute for Occupational Safety and Health (NIOSH) highlights the role of unions in promoting workplace safety and health standards, leading to fewer accidents and injuries.

Navigating Labour Unions in Different Countries

1. Japan

• Key Union: Japanese Trade Union Confederation (Rengo).
• Legislation: The Trade Union Act protects workers’ rights to organise and engage in collective bargaining.
• Employer Tip: Foster open communication and mutual respect with union representatives.

2. India

• Key Union: All India Trade Union Congress (AITUC).
• Legislation: The Industrial Disputes Act regulates labour relations and dispute resolution.
• Employer Tip: Ensure compliance with regulations and engage in proactive dialogue with union leaders.

3. South Korea

• Key Union: Federation of Korean Trade Unions (FKTU).
• Legislation: The Trade Union and Labour Relations Adjustment Act governs union activities and labour relations.
• Employer Tip: Maintain transparent communication and adhere to fair labour practices.

4. Australia

• Key Union: Australian Council of Trade Unions (ACTU).
• Legislation: The Fair Work Act regulates workplace relations and union activities.
• Employer Tip: Engage in constructive bargaining and ensure compliance with the Fair Work Act.

5. Indonesia

• Key Union: Confederation of Indonesian Trade Unions (KSPI).
• Legislation: The Manpower Act governs labour relations and union rights.
• Employer Tip: Collaborate with unions to ensure compliance and address worker concerns.

6. Philippines

• Key Union: Trade Union Congress of the Philippines (TUCP).
• Legislation: The Labour Code of the Philippines regulates union activities and labour relations.
• Employer Tip: Engage in good faith negotiations and comply with the Labour Code provisions.

Recent Union Strike in the APAC Region

Case Study: The 2024 Samsung Union Strike

• Union Involved: Samsung Electronics Union.
• Background: For the first time in its 55-year history, Samsung’s largest union went on strike over disputes related to pay and bonuses. The strike was announced as part of broader labour actions across South Korea, reflecting increasing labour unrest in the country.
• Impact: The strike involved around 28,000 employees, with union members using annual leave to participate in the strike. This action highlighted the growing influence of unions within major South Korean companies and set a significant precedent for labour relations in the tech industry.
• Source: CNN, France24

Challenges and Opportunities

1. Legal Compliance

• Challenge: Navigating complex and varied labour laws related to union activities across different countries in the APAC region can be daunting for multinational companies. Each country has unique regulations regarding union recognition, collective bargaining, and dispute resolution, which can change frequently. Non-compliance with these laws can lead to significant legal penalties, reputational damage, and operational disruptions.
• Opportunity: Partnering with local legal experts or labour consultants can ensure compliance with union-related laws and mitigate risks. These professionals can provide up-to-date knowledge of local regulations, help develop compliance strategies, and train staff on legal requirements. Engaging with an Employer of Record (EOR) can also be beneficial, as they offer expertise in local labour laws and can handle compliance-related tasks. According to a report by Deloitte, effective compliance management can drive performance by reducing risks, enhancing decision-making, and providing a clear framework for managing regulatory changes. A robust compliance framework not only mitigates legal and financial risks but also contributes to operational efficiency and improved labour relations.

2. Labour Disputes

• Challenge: Managing strikes, work stoppages, and other forms of industrial action can significantly disrupt business operations. labour disputes can arise from disagreements over wages, benefits, working conditions, and other employment terms. These disputes not only affect productivity but can also damage the employer’s reputation and employee morale.
• Opportunity: Establishing robust conflict resolution mechanisms and maintaining open lines of communication can help address disputes effectively. This includes developing a clear grievance-handling procedure, fostering a culture of transparency, and engaging in regular dialogue with union representatives. According to a study by SHRM, effective conflict resolution can lead to improved labour relations and a more cooperative work environment. Investing in mediation and arbitration services can also help resolve disputes before they escalate.

3. Employee Engagement

• Challenge: Balancing union demands with business objectives can be challenging. Unions often advocate for better wages, benefits, and working conditions, which can increase operational costs. At the same time, businesses need to maintain profitability and competitiveness.
• Opportunity: Fostering a collaborative relationship with unions can enhance employee satisfaction and productivity. This involves actively listening to employee concerns, involving union representatives in decision-making processes, and demonstrating a commitment to fair labour practices. A report by Gallup highlights that highly engaged employees are 21% more productive and show 41% lower absenteeism. Engaging with unions constructively can help align employee goals with business objectives, leading to a more motivated and committed workforce.

Conclusion

Understanding and effectively managing labour union relations is crucial for employers operating in various countries. By staying informed about local union laws, engaging in good faith negotiations, and fostering positive relationships, employers can navigate the complexities of labour unions and ensure a harmonious and productive workplace. For more insights and assistance in hiring and managing your employees, contact us at EOS Global Expansion.

References

1. Japanese Trade Union Confederation (Rengo)
2. All India Trade Union Congress (AITUC)
3. Federation of Korean Trade Unions (FKTU)
4. Australian Council of Trade Unions (ACTU)
5. Confederation of Indonesian Trade Unions (KSPI)
6. Trade Union Congress of the Philippines (TUCP)

Featured photo by Etienne Girardet on Unsplash