Conflict over salaries between the management and labor union of KB Kookmin Bank, South Korea’s biggest commercial bank by profits, is being prolonged, raising concerns that labor-management disputes could dampen the company’s growth momentum and operations.

After the bank’s labor union staged a nationwide strike last week -- the first in 19 years -- the management and the union appeared to have made some headway in negotiations by striking an agreement on the conditions for early retirement and bonus payouts.

However, the two sides again failed to reach an agreement on key issues, including the wage-peak system that involves a gradual reduction in salary for senior employees and the pay-band system that caps the wages of employees who fail to attain a promotion within a designated period of time. 

As a result, KB’s labor union said Monday that it had officially requested formal deliberation by the National Labor Relations Commission, raising the stakes in labor negotiations that are increasingly drawing criticism for inconveniencing bank customers.

“Despite hours of focused negotiations with the management, we could not narrow our differences and thus have requested deliberation by the National Labor Relations Commission,” the KB Kookmin Bank labor union said in statement.

The biggest point of disagreement between the two sides is the pay-band system as well as the employment recognition terms for bank teller employees. The firm wants to apply the pay-band system to all employees, as it now pertains only to employees who joined the firm more recently. The union hopes to abolish the system altogether.

Whether the two sides can reach an agreement remains to be seen. The union already sought the NLRC’s deliberations twice last month, but was unable to reach a mutually acceptable agreement through the quasi-judicial government body. As a result, the union staged a general strike last week.

The bank’s labor union said it intends to hold a maximum of four additional strikes in the coming months. The most imminent one is scheduled from Jan. 30 to Feb. 1, shortly before the Lunar New Year holiday in early February.

Three additional strikes have been announced -- between Feb. 26-28, March 21-22 and March 27-29, according to the union.

A KB spokesperson said the bank could not provide further updates on the current dispute between the management and labor union, as both sides have yet to conclude their negotiations.

Moreover, KB said Tuesday that around 600 employees have applied for voluntary early retirement, following a consensus between the management and labor union on the terms of the retirement option.

As of January, around 2,100 employees subject to the wage peak policy were eligible for the retirement option. The employees who applied for the option will be formally dismissed on Jan. 28, after the bank finishes its review.

KB Kookmin Bank is currently Korea’s No. 1 commercial bank in terms of profits. It had recorded 2.08 trillion won ($1.86 billion) in accumulated net profits as of the third quarter of last year, outrunning former champion Shinhan Bank to reclaim its previous title as the country’s leading bank. 

By Sohn Ji-young (jys@heraldcorp.com)