Year’s Biggest Concern: Wage, Collective Bargaining Negotiations Going Hard since Moon Jae-in Administration’s Inauguration | BusinessKorea

Sunday, February 25, 2018

Almost all labor-management wage negotiations have been delayed since the inauguration of the Moon Jae-in administration.
Almost all labor-management wage negotiations have been delayed since the inauguration of the Moon Jae-in administration.
Seoul, Korea
4 January 2018 - 10:00am
Michael Herh

Since the inauguration of the Moon Jae-in administration, cases in which labor-management wage negotiations have been delayed or dramatically concluded after some difficulties have been on the rise. Hyundai Motor, Kia Motors, GM Korea and other automobile companies which had gone through difficulties in labor-management negotiations are sure to have extended negotiations in the New Year, continuing from last year. Hyundai Motors and GM Korea are expected to reach agreements in the New Year, continuing from the previous year for the first time in history.

Hyundai motor’s unionized 51,000 workers will resume strikes this week for higher salaries and bonuses and will go on strike for eight to 12 hours a day over the next four working days in a move to press the company to come up with an "improved" wage package, the Hyundai's labor union said in a statement on January 3.

"If the company does not offer an additional increase in wages, the union will have no other option but to stage a prolonged strike this year," union leader Ha Bu-young said on the day.  

In its latest offerings, the company said it would raise workers' basic monthly wages by 58,000 won (US$53) and provide bonuses worth 300 percent of basic pay plus 3 million won (US$2,700) in extra compensation. But the revised offer was rejected by the union in a vote held last month.

In fact, the negotiations for 2017 between labor and management had been forced to continue in the New Year for the first time in its 50 years’corporate history. On December 30 last year, the labor union held a labor issue committee meeting after and decided to reject all overtime work including working overnight on weekdays and cease all consultations and the renovation of factory facilities on January 3. "It has become virtually impossible to reach an agreement within this year," a union official said on the day. "We will take a legal action against the management at the beginning of the new year."

The Labor Union of GM Korea dramatically hammered out a tentative agreement on wage negotiations in the 25th negotiations since the first round of talks on May 23 of 2017. The main agreement is to raise employees’ basic salaries by 50,000 won (US$45), an incentive of 6 million won or US$5,400 (to be paid on February 14, 2018) and a performance-based bonus amounting to 4.5 million won or US$4,050 (to be paid on April 6, 2018). However, it is forecast that the final agreement will be reached in the New Year. "Because the deal needs to pass union members’ votes, it will be possible to seal the deal at the beginning of the New Year," a GM Korea official said.

The shipbuilding industry including Hyundai Heavy Industries (HHI) and Daewoo Shipbuilding & Marine Engineering also cut a deal on wage negotiations before the end of 2017. The labor and management of HHI tentatively agreed on wage negotiations aimed at freezing employees’ basic salaries in two years. Both sides had had wage and collective agreement negotiations in 2016 and wage negotiations in 2017 altogether as they failed to finalize wage and collective agreement negotiations in 2016. Among some provisions of the collective bargaining agreement ineffectual in the past, they agreed to remove the preferential treatment of employees’ and retired workers’ children in recruitment processes.

The labor and management of Daewoo Shipbuilding & Marine Engineering recently agreed a tentative agreement on wages and collective bargaining that will not pay bonuses and freeze wages in 2016 and 2017. The union went on a full-scale strike in two years and the union chairman held a sit-in on a 17-meter-high light tower at Geoje Shipyard, capping a long period of the labor dispute but both sides fortunately reached the agreement. Both sides also scratched off a "hereditary clause," which states that the company should hire employees' children ahead of others at the time of new recruitment which sparked off big social controversy.

In the meantime, seven out of 10 Korean firms have expressed concern about unstable labor-management relations this year, as the government is pushing to strengthen the interests of workers, according to the Korea Employers Federation.

A survey made by the federation said the biggest concern of surveyed 236 companies was related to legal disputes over the issue of ordinary wages and the biggest bone of contention in labor-management negotiations is union demands for wage increase.


Copyright 2013 BusinessKorea Co., Ltd.
301 Samdo Building, 12-1
Yeoido-dong, Yeongdeungpo-gu
Seoul, Korea 150-010
Tel: +82-2-578-3220
Fax: +82-2-578-3224


Web design by: