The union members of the Standard Chartered First Bank Korea ended Monday their one-day strike in protest of the management’s proposal to adopt a performance-based pay system.

The union said it decided to return to work from Tuesday, adding that it would push for a meeting with the management to settle the labor dispute. “But if the negotiation makes little progress, we will go into another strike,” said a union member.

On Monday, about 2,700 members from the labor union gathered in Chungju, North Chungcheong Province, to protest against the proposed change to the current seniority-based wage system, arguing that management was trying to reduce labor costs at the expense of their job security.

The Korean arm of the U.K. banking giant since January has been pushing to introduce the performance-based pay system for the first time in the local industry.

The management said the new system would enhance service quality by better rewarding those who perform better.

“The new system also aims to improve welfare benefits for the workers by differentiating the support amount of education and pension according to their age group,” an official at the lender said.

The bank deployed non-union members to run business operations as per usual.

The financial watchdog said it launched a taskforce to watch for unexpected fallout from the labor strike.

“We’re closely watching the situation as there is a chance that the strike could be prolonged,” said an official at the Financial Supervisory Service.

By Cynthia J. Kim (cynthiak@heraldcorp.com)