HD Hyundai Reaches Wage Breakthrough, Hanwha Sit-In Continues

Hanwha Geoje shipyard. (Yonhap) While the shipbuilding industry is experiencing a boom in orders, discord continues in labor-management relations on the ground. Labor and management at HD Hyundai Heavy Industries have found a breakthrough to concluding negotiations by preparing a second tentative agreement for the wage and collective agreement, but Hanwha Ocean has not been able to find an exit from the conflict as the long-term sit-in by the subcontractor union continues. According to the shipbuilding industry on Oct. 23, labor and management at HD Hyundai Heavy Industries reached the second tentative agreement for this year’s wage and collective agreement during the 26th negotiation held at the Ulsan headquarters on the same day. This comes 21 days after the first tentative agreement was rejected in a union member vote. The new agreement focuses on a base pay increase of 120,000 won (about $90.59) and the payment of a lump sum of 11.5 million won (about $8,682) and 200%. The lump sum increased by 500,000 won compared to the first agreement, and the step-up salary increment was also raised by 5,000 won to 55,000 won. The provision of 300,000 won in welfare points, adjustments to the severance pay calculation standards, and the conclusion of a special agreement on industrial transition were also included. The union will hold a pros and cons vote among its members on Oct. 27. Previously, the first tentative agreement was rejected with 52.14% of the voters opposing it. The key is whether the additionally adjusted conditions can gain the consent of the union members this time. With the drafting of the agreement, the high-altitude sit-in by Kim Dong-ha, the head of the union branch, was lifted after five days. On the other hand, the subcontractor union’s sit-in has continued for nearly a month at the Hanwha Ocean Geoje workplace. Members of the Geoje, Tongyeong, and Goseong Shipbuilding Subcontracting Branch of the Korean Metal Workers’ Union have been staging a sit-in on cranes and factory roofs starting on September 30, demanding negotiations with the principal contractor. While HD Hyundai Heavy Industries found a point of agreement by adjusting wage and collective agreement conditions such as base pay, lump sums, and welfare, the Hanwha Ocean subcontractor union is raising issues of discrimination in performance bonuses, a decrease in real wages, and industrial accidents, in addition to the principal contractor’s responsibility to negotiate. This means that structural problems that are difficult to resolve solely through wage levels are intertwined. Hanwha Ocean explained that it is improving the standards for paying performance bonuses and continuing to increase the unit prices for partner companies regarding the union’s claims. Regarding the claims of concealing industrial accidents, the company stated that it is verifying related cases and taking measures against the relevant companies. The two sides held their second negotiation on Oct. 15, but the sit-in on the ground continues. An official from Hanwha Ocean stated, “In accordance with what is stipulated in the decision of the National Labor Relations Commission and the decision on the suspension of execution, we have conveyed our position that we will proceed with negotiations on agendas related to safety and the improvement of outdated facilities and equipment.” However, the tentative agreement of HD Hyundai Heavy Industries also does not mean a final conclusion. Since the agreement has already been rejected once, the results of the union members’ vote must be observed.