A major South Korean labor union has called off plans for a nationwide work stoppage Tuesday. The so-called sympathy strike was canceled after the government and power workers agreed in principle to end a five-week labor action.
The South Korean government and the country's second largest labor group say they have struck a deal to end the power workers strike.
About 5,000 state employees of Korea Electric Power walked off the job February 25 to protest government plans to privatize the industry later this year. They fear that mass layoffs will result.
It appears that the two sides failed to come to terms on the key issue of privatization but have agreed to put it aside for the time being.
Instead, the South Korean labor minister says the government will use restraint in punishing the striking state workers and that in return, the power workers will get back to their jobs.
Tuesday's agreement came just before the Korean Confederation of Trade Unions was set call a sympathy strike. As many as 120,000 workers in key export industries were expected to join the labor action.
Hong Nam-ki is a research director for investment bank Morgan Stanley in Seoul. He says that the privatization issue will have to be resolved in the future. "I think this struggle is going to be ongoing for a long time to come. This balance between labor and management has been an ongoing issue for many years. I think for the time being people are being realistic and that this is an outcome that many parties can live with," Mr. Hong said. The power workers strike has posed a significant problem for President Kim Dae-jung. He is serving his last year in office and wants to ensure his legacy as a man who greatly advanced South Korea's free-market economy. Privatization is a key plank of his economic reform plans.
There have also been concerns that the power strike could cast a shadow over the World Cup soccer finals which South Korea and Japan will jointly host next month.