Wage Deal Broken

The Hyundai Motor union rejected a tentative wage deal this year agreed between the leaders and the management.
The Hyundai Motor union rejected a tentative wage deal this year agreed between the leaders and the management.

 

Members of the Hyundai Motor union rejected a tentative wage deal this year agreed between their leaders and the management with a record low agreement rate. This is the first time that Hyundai’s unionized workers have rejected such an annual pay deal, provisionally agreed, since 2008.

On August 24, the company management and union leaders struck a deal to raise the workers’ monthly wage by 58,000 won (US$52), pay 3.3 million won (US$2,960) as a one-time incentive as well as a bonus of 350 percent of the base monthly wage, give 200,000 won (US$179) worth of gift certificates which can be used in traditional markets and 10 Hyundai Motor shares.

Hyundai Motor's labor union announced that 45,777 out of its 49,665 unionized members participated in the vote on the 27th with a 92.17 percent turnout and 35,727 of them, or 78.05 percent, were against the accord. Only 10,028 unionized members, or 21.9 percent, voted in favor of the tentative wage deal. This is the lowest agreement rate in votes on provisionally agreed annual pay deals in history.

The company’s union members voted down a tentative wage agreement this year since they were not satisfied with smaller increases in basic pay, bonuses and incentives than the previous years’ package, according to industry sources. In addition, the field workers’ labor organization, which is the counter-balance of the current union’s executive, persuaded union members to vote against the tentative agreement and some unionized workers said the tentative agreements were not good enough after accepting lost wages as they staged 14 rounds of partial walkouts since the wage talks began in July.

Both the company management and union leaders have to start renegotiating this year’s wage package next week. They need to come up with the second tentative agreements in two weeks in order to reach an agreement before Chuseok, a Korean national holiday similar to Thanksgiving.

In a bid to address stalled negotiations, the management retracted plans to expand the wage peak system to start cutting payments for workers as they near retirement, which was the biggest issue. The company management and union leaders will also discuss ways to improve wage systems through a wage system and ordinary wage improvement committee in order to secure the future wage competitiveness and offer reasonable solutions to ordinary wage problems, and start implementing them next year.

 

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