hankyoreh

Hyundai Motor unions and management representatives meet at the factory in Ulsan for collective bargaining on wages

An announcement by the Korean Metal Workers’ Union (KMWU) that it plans to take 250 billion won (US$219.9 million) from regular workers’ wages (wage claims) to use for subcontracting companies and irregular workers is being seen as a meaningful example of the labor world taking the initiative in reforming the South Korean labor market’s dual structure of regular and irregular employment.

The move goes beyond demanding that chaebol employers take the first step in paying their share, while responding to arguments that the regular worker unions also bear some responsibility. The next question is whether the resulting “job solidarity fund” of over 500 billion won (US$439.9 million) will offer a new model for collective labor-management relations in South Korea.

But making the fund actually happen will require the cooperation of Hyundai Motor and Kia Motors, which have so far said they have no legal obligation to participate in collective bargaining for companies in Hyundai Motor Group.

KMWU’s proposal involves making resources of ordinary wage claims owed to workers and a portion of the increase in pay to workers from yearly collective bargaining on wages. It’s a different approach from last year’s demands that part of Chairperson Chung Mong-koo and Vice Chairperson Chung Eui-sun’s stock dividends be provided as seed money.

With regular workers paying a share, the job solidarity fund is likely to be used for subcontractor workers facing harsher conditions.

“Working hours at Hyundai and Kia have been reduced through a continuous daily two-shift system [one eight-hour day shift and one eight-hour night shift], but many partner companies and subcontractors are still working 10 hours at a time or alternate day and night shifts,” explained a KMWU source.

“The solidarity fund may be used to reduce working hours at subcontractors and increase the number of jobs,” the source added.

But many hurdles have to be cleared before KMWU’s proposal can become a reality. First is the question of whether Hyundai and Kia will get on board. KMWU has demanded joint bargaining by affiliates, noting that current wage and collective bargaining for affiliates takes place under the de facto leadership of Hyundai Motor’s head office. To date, the company has refused to go along.

“Not only is joint bargaining at the group level not possible due to the companies’ different business environments, including working conditions and ability to pay, but we are also under no legal obligation to participate,” a Hyundai Motor source told the Hankyoreh on June 19.

“A social solidarity fund can’t be discussed through group-level joint bargaining. It’s something that has to examined by labor and management on a company-by-company basis as needed, in consideration of factors like the business situation and bargaining conditions,” the source added, suggesting the approach is more or less out of the question.

The second hurdle concerns whether labor and management can agree on the schedule and scale for payment of overdue “ordinary wage,” a key source of seed money for the job solidarity fund. Thirteen of Hyundai and Kia’s 17 affiliates are currently involved in litigation, with some 92,000 plaintiffs. The union estimated average wage claims per worker between 21 million and 66 million won (US$18,470-58,060). The Supreme Court previously ruled in late 2013 that regular bonuses, which make up a large portion of wages, were considered ordinary wages - but Hyundai-Kia has yet to rework its wage system according to the new standard.

“As of last year, overdue wages of 7 to 12 million won (US$6,160-10,560) per person kept arising, but the company has gone ahead with the legal battle without reaching any agreement on ordinary wages,” a KMWU source said.

Cho Seong-jae, head of the Korea Labor Institute’s labor-management relations research headquarters, said it would be “better for labor and management to compromise than to continue shouldering legal costs and generating societal frictions.”

“Now that the union has come out with a forward-thinking measure [the job solidarity fund], the business community needs to stop responding so passively and blaming everything on the ‘selfishness’ of corporation unions, and start actively coming up with solutions to relieve polarization,” Cho advised.

KMWU also plans to work on bringing the government into the discussion by requesting consulting on the fund’s management, sources said. President Moon Jae-in has repeatedly stressed the importance of concessions toward job creation by regular worker unions and societal dialogue and compromise.

“The administration needs to respond to KMWU’s proposals as a positive sign in relieving the dual labor market structure and take active steps toward establishing a form for societal dialogue and consultation,” said Chung-Ang University sociology professor Lee Byoung-hoon.

By Park Tae-woo and Jung Eun-joo, staff reporters

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