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Labor Union of Hyundai Heavy Industries Breaks Labor-Management Pact to Increase Membership
A Move against Membership Contraction
Labor Union of Hyundai Heavy Industries Breaks Labor-Management Pact to Increase Membership
  • By Michael Herh
  • January 14, 2020, 11:17
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The Hyundai Heavy Industries (HHI) trade union is seeking to retain union members who were promoted to assistant managers. Under the union’s 30-year-old pact with the management, employees who become assistant managers are automatically deprived of their labor union membership. But the labor union is ignoring the pact to prevent a drop in union membership from weakening its bargaining power and decreasing membership fees.

In a public notice issued on Jan. 9, the union encouraged the 180 newly promoted assistant managers to maintain their union membership, saying that the union’s bargaining power has been declining due to a sharp decrease in the number of members. “Although the collective bargaining agreement is not applied to you at the moment, we ask you to maintain your union membership, which will help us revise the pact to retain you as union members,” it said.

The labor union's move goes against the labor-management collective bargaining agreement signed 30 years ago. At the time, the labor union demanded that assistant managers be banned from becoming union members because they represented the management. The management accepted this demand.

However, the labor union stealthily changed the enforcement rules of the labor-management collective bargaining agreement in July last year as it suffered financial difficulties due to an increase in labor union operating costs arising from strikes and post-strike litigation. The management is not responding to the demands of the labor union that the agreement be revised.

The Korean Confederation of Trade Unions (KCTU)’s strategy is playing a role in the labor union’s unreasonable move. The KCTU has recently become the largest umbrella group in Korea and is seeking to embrace even subcontractors to maximize its negotiating power.

Spin-offs and labor members’ retirements and promotions pushed down the number of HHI's labor union members from 17,000 five years ago to 10,000. Due to the sluggish shipbuilding market, few new hires were made, contributing to the membership contraction. The labor union leadership chose to restore the qualifications of unqualified workers against the drop in the number of labor union members. The labor union expects that if more than 1,340 assistant managers join the labor union, the total number of labor union members will increase from the currently 10,460 to around 12,000.

The labor union's sensitivity to the number of labor union members is closely related to labor union membership fees. Since May last year, the labor union has urged unionists to go on strike while demanding that the management put a halt to a split-off. The total amount of collected labor union member fees ran short as the labor union paid unionists who took part in the strike with labor union member fees as their living expenses. Hyundai Heavy Industries' labor union even embraces subcontractor workers to enhance its power. Last year, the labor union of Hyundai Heavy Industries formed an integrated labor union with subcontracting workers for the first time among labor unions of large Korean corporations, and voted that the management should be responsible for subcontracting workers' wages and welfare benefits.

The labor union’s strategy of expanding its membership is based on the KCTU’s strategy of expanding the bargaining power. The KCTU is above the labor union of Hyundai Heavy Industries. “The KCTU proposed such a strategy in order to increase labor unions’ bargaining power and the Korean Metal Workers Union’s central bargaining power,” a labor union official said.

Some experts point out that the Hyundai Heavy Industries Labor Union, which has not yet been out of a shipbuilding recession tunnel, is keen only on expanding its power. Hyundai Heavy Industries posted a deficit of more than 500 billion won (about US$431 million) in 2018 and failed to meet its order target in 2019. As its offshore plant division has no work, the management is forced to mull over relocating loitering workers.