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August 15, 2018

Oracle Korea’s reputation on the line with record-long strike

PUBLISHED : July 10, 2018 - 14:20

UPDATED : July 10, 2018 - 14:38

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[THE INVESTOR] Oracle Korea, the local unit of global software giant Oracle, is facing severe reputation damage due to a record-long union strike amid accusations of mismanagement including sexual harassment.

Workers of the leading B2B technology provider have been sitting outside the main office for 55 days as of July 10 after 19 negotiations with the management from December to April failed. This is now the longest strike by employees of a foreign IT company in Korea.

“Some people think we don’t need a union because they believe we work at a leading global IT company and have well-paid jobs,” Kim Chul-soo, president of the Oracle labor union, said. “It’s not true at all.” 


Oracle Korea union workers sit in a protest in June
Oracle Korea Labor Union



The union claims that workers are suffering from a decline in real wages because there has been no increase in basic salary for the last 10 years, while half of the salary is based on incentives. Hiring scams similar to those at local banks, along with sexual harassment are also among the union’s accusations.

Furthermore, as Oracle Korea began shifting its business focus to cloud computing in the last few years, more than 100 workers left voluntarily or were dismissed.

“I saw so many colleagues being forced into a situation where they decided to leave unfairly,” said a worker by the surname Lee who has been working at Oracle for 10 years. “Things have reached a tipping point.” 

The number of total employees at Oracle Korea, which opened in 1989, is estimated to reach 1,200. The labor union said almost 600 workers are members of the labor union as of now.

The unionists claim that working hours are also an issue, saying that it’s normal to work 80 hours per week, while some even work more than 110 hours. 

The dissatisfaction with the company led to the creation of a labor union, the third among foreign IT companies, in October 2017. Before last year, the Korean branch of US printer and PC giant Hewlett-Packard was the only foreign IT company with a labor union. HP Korea’s labor union was formed during the merger process of Fujitsu Korea and Compaq Korea in 2002. In August 2017, a labor union was established at Microsoft Korea. 

“I believe the company is slow in reaching an agreement with the labor union on purpose partly to maximize financial hardships of workers who won’t get paid during the strike,” said Lee. 

While the management is blaming the headquarters, the union said it is unable to contact top executives directly.

Lee Jung-mi, Justice Party lawmaker, last month said that Oracle Korea is minimizing its responsibilities while maximizing profits by abusing regulatory loopholes. In 2016, National Tax Service imposed more than 314.7 billion won (US$282 million) penalties on Oracle Korea for corporate tax evasion worth nearly 7 trillion between 2008 and 2014. Oracle Korea has filed a complaint with a tribunal and the case is still pending.

“After converting to a limited liability company, Oracle Korea is exempted from an external audit. It doesn’t disclose any management information such as revenue, dividends or donations,” the lawmaker claimed. “Based on the last report in 2008, the company sent 138 billion won, or 48 percent of its total sales, to the headquarters as license fees and other charges while 23 billion won out of 41.4 billion won of revenue was transferred as dividends.” 

She pointed out that there is no way to confirm if there were excessive charges and fees transferred to the headquarters while its workers are being mistreated.

The Investor reached out to both the headquarters and the local unit for comments. They sent out an official statement saying: “The company respects local laws. The company has been faithfully engaged in negotiations with the labor union and is ready to continue to participate in talks to achieve agreements in the future.”
An official at the Korean unit, when contacted, declined to confirm the labor union’s claims.

By Park Ga-young (gypark@heraldcorp.com)

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