Lafarge Group V Korean Chemical and Textile Workers Federation (KCTF)

Overview

NCP Decision Accepted
Current Status Closed
Date Submitted 01/10/2006
Case Duration Not known
Host Country South Korea  (OECD member)
Sector Building and Construction 
Issue(s) Union-busting/anti-union behaviour/outsourcing
Provisions Cited II.10  IV.1-a  IV.1-c  IV.1-d  IV.6  IV.8   
Case Description In October 2006, the Korean Chemical and Textile Workers Federation (KCTF) submitted a case to the Korean NCP regarding violations of the Guidelines by Lafarge Halla Cement. According to the KCTF, Lafarge closed its in-house subcontractor Woojin Industry on 31 March 2006 because the workers had joined the KCTF a few weeks earlier. The owner of Woojin Industry (a former manager of Lafarge) had previously announced that it would not close down if the workers left the KCTF. The workers that agreed to resign from the union were transferred to other subcontractors at the plant while the 11 workers that refused to leave were dismissed. During the following months, another four of the dismissed workers left the KCTF of which two were employed by other in-house subcontractors and two retired.

Given the nature of the relationship between Lafarge and Woojin Industry, the KCTF argued in its submission to the NCP that Lafarge should be considered as the real employer. Although the workers at the plant carried out the same or similar tasks, the Woojin workers were paid less than half of the salaries of the Lafarge workers. They were also forced to do overtime.

The Korean Labour Ministry had concluded that the Woojin workers should be treated as employees of Lafarge. Moreover, the Gangwon Regional Labour Relations Commission has twice ruled that the workers that demanded reinstatement had been unfairly dismissed.

Developments The NCP replied in November 2006 that it would be difficult to conclude that Lafarge had not observed the Guidelines because the company had submitted evidence that it had provided “labour-related education” for its subcontractors. In December 2006, the NCP then claimed that it had to await the final decision of the National Labour Relations Commission. It also referred to discussions that had taken place at the OECD Annual Meeting of NCPs, which it interpreted as NCPs should refrain from action in cases of parallel proceedings.

In March 2007, the National Labour Relations Commission overturned the ruling of the Regional Labour Relations Commission. The union has therefore appealed to the Ordinary Court.

In April 2007, Lafarge headquarters and the ICEM agreed to encourage the local Korean parties to find a solution through social dialogue under mediation of the Labor Ministry Office. Lafarge committed to 'do its best efforts' to help the remaining workers to find an equivalent job among its subcontractors.

Outcome In September 2007, three of the dismissed workers came to Paris to meet with the management of Lafarge. On 1 October 2007, an offer was made by Lafarge which included positions with the company’s subcontractors for the now remaining four workers. The offer was rejected by the KCTF on 4 October because the proposed workplaces were organised by affiliates to the FKTU. Besides, some of them were considered as external suppliers and not subcontractors. The KCTF also argued that the proposed salary was below the minimum wage.

Organisations

Lead NCP South Korea NCP : Independent Expert Body 

Companies

Multinational Company Lafarge (Home country: France)
Subsidiary Lafarge Halla Cement (Home country: South Korea)
In-house Subcontractor Woojin Industry (Home country: South Korea)

Complainants

Lead Complainant Korean Chemical and Textile Workers’ Union : National Sectoral Union 

Related Documents

BWI  'The dual face of Lafarge Group in Korea All that glitters is not gold'
   http://www.bwint.org/pdfs/Lafargecase.pdf [Date URL accessed: 17/4/2010]

TUAC Analysis

Did the NCP publish its initial assessment? status-icon
Did the case involve parallel proceedings? status-icon
Was the existence of parallel proceedings an obstacle to the NCP accepting the case? status-icon
Was the businsess relationship other than that of a subsidiary? status-icon
Was the nature of the business relationship an obstacle to the NCP accepting the case? status-icon
Did the NCP inform other relevant government departments about its acceptance of this case? status-icon
Did the NCP offer mediation or conciliation? status-icon
Did the company accept the offer of mediation or conciliation? status-icon
Did the complainant(s) accept the offer of mediation or conciliation? status-icon
Was mediation or conciliation held? status-icon
Was mediation or conciliation conducted by a professional mediator? status-icon
Did the parties reach agreement? status-icon
If yes, did the NCP publish this agreement following the consent of the parties? status-icon
If mediation was refused or failed did the NCP make an assessment of whether the company had breached the Guidelines? status-icon
Did the NCP conduct in-host country fact finding? status-icon
Did the NCP make recommendations to the company on the future implementation of the Guidelines? status-icon
Did the NCP publish its final statement or report? status-icon
Did the NCP provide for follow-up of the agreement/recommendations? status-icon
Did the NCP inform other relevant government departments about its final statement or report? status-icon
Did the NCP inform public pension funds about its final statement or report? status-icon
Did the NCP apply any consequences in this case? status-icon
Did the NCP follow the indicative timescales set out in the procedural guidance? status-icon
Was there a positive outcome for the workers involved in this case? status-icon
Did the filing of the case under the Guidelines have a positive impact for the workers involved? status-icon
Did the lead NCP play a positive role? status-icon
If different, did the home NCP play a positive role? status-icon

TUAC Assessment

LINK TO INTERNATIONAL FRAMEWORK AGREEMENT

Implications

Outsourcing; parallel legal proceedings