Emergency Measure
With the Hyundai Motor Labor Union’s strike prolonged, the government is expected to exercise its emergency arbitration right. The emergency arbitration right is exercised when it is feared that a labor union’s strike will put the people’s everyday lives at risk or do the national economy harm.
“If the management and labor fails to hammer out an agreement as soon as possible and the strike continues, we will put an early end to the strike by devising all measures in law and systems after taking into consideration the strike’s impact on the Korean economy and people’s jobs,” said Lee Ki-kwon, minister of employment and labor in an event to make presentations on fair performance evaluation models in the Seoul Employment and Labor Office on September 28. That is to say, it seems that Lee hinted at the emergency arbitration right set by the Labor Union Act.
When the emergency arbitration right is exercised, the labor union is prohibited from walking off for 30 days and the Central Labor Committee begins arbitration. If the arbitration fails, the chairman of the committee can order settlement by arbitration. Settlement by arbitration equals a collective bargaining agreement.
Up to the present, the emergency arbitration right has been exercised a total of four times. Namely, workers of the Korea Shipbuilding Corporation downed tools in 1969, the labor union of Hyundai Motor walked out in 1993 and Asiana Airlines and Korea Airlines pilots went on a strike in 2005.
“The Hyundai Motor Labor Union has gone recorded 22 strikes including an overall strike in 12 years for 72 days up until today since July 19,” Minister Lee said.
"It is a very serious problem for the Hyundai Motor Labor Union whose members receive salaries which representatively belong to the top 10% to continue the strike while demanding an excessive pay raise without considering socially weak people such as those working at partners and temporary workers."
The 72-day strike of the labor union brought Hyundai Motor a decline in 121,167 units or 2.7 trillion won (US$2.4 billion). In particular, first-tier partners (380 firms) posted 1.3 trillion won (US$1.1 billion) in sales loss. In this way, numerous small and mid-sized partners are seeing their losses snowballing due to the strike.
Last year, the average yearly salary of Hyundai Motor hit 96 million won (US$86,400). But that of first-tier partners stood at 65% of the average yearly salary of Hyundai Motor. Employees of second- and third-tier partners take home pays which are 30% to 35% of those of Hyundai Motor employees.
On the other hand, the labor and management of Hyundai Motor tentatively agreed to this year’s wage negotiation proposal which raised wages by 58,000 won (US$52) and will give a 350% performance-based bonus, a reward of 3.3 million won (US$2,970), ten shares of the company and a 200,000 won (US$180) gift certificate for traditional markets among others after a marathon negotiation on August 24. But the agreement was rejected as 78.05% of votes were cast against the deal.