At Hyundai, push for Court-ordered reinstatement of workers

Posted on : 2011-07-20 14:25 KST Modified on : 2019-10-19 20:29 KST
Experts recommend Hyundai use 5 pct. of net profits to convert all irregular workers into regular workers
 July 18.   (Photo by Yonhap News)
July 18. (Photo by Yonhap News)

By Kim So-youn 


At a commercial building across from the front gate of Hyundai Motor’s Ulsan factory in the North District neighborhood of Yangjeong, around 20 people gathered in a small space without a hit of a breeze, and no air conditioning to speak of. These were dismissed Hyundai Motor in-house subcontracting workers. Merely sitting there for ten minutes was enough to have their bodies soaked in sweat, but it was a very important place for them: a “second labor union office” functioning as a base for their fight for reinstatement.

Since the company blocked fired workers’ access to the factory, they rented a room in the building last February and have used it as a temporary office ever since. In 2011, some 104 workers have been fired after demanding to be converted to regular worker status, while more than one thousand others have received disciplinary measures. But for now, Hyundai Motor’s Ulsan plant, the world’s largest automobile factory at 4.95 million square meters (1.53 million pyeong), keeps going around the clock regardless of the plight of these workers worrying about how they are going to survive.

July 22 of last year is remembered as an unforgettable day for in-house subcontracting workers. To these people despairing in the darkness, a Supreme Court ruling came like a ray of light.

“Hyundai Motor’s in-house subcontracting corresponds to illegal temporary employment disguised as subcontracting,” the Court said. “As such, the court views those workers who have been employed for more than two years as being directly employed by Hyundai Motor according to the Temporary Workers Act.”

No one had seen it coming. Losses with the local and national labor relations commissions, Seoul Administrative Court, and Seoul High Court had been overturned by the Supreme Court. The ruling had a great impact. Union membership at the Ulsan, Asan, and Jeonju plants rose from 970 to 2,400. The anticipation that they might become regular workers led these employees to flock together under the union banner. In November 2010, around 250 in-house subcontracting workers occupied Ulsan’s No. 1 factory, halting operations for 25 days.

But both the law and the battle were seemingly useless in the face of a large corporation. Despite the passage of one year since the Supreme Court ruling, nothing has changed. Hyundai Motor still engages in illegal temporary employment, and not one in-house subcontracting worker has become a regular worker according to the Temporary Workers Act.

“Even after the Supreme Court ruling, the company has feigned ignorance, and the only ones suffering are us, the ones who put up a fight,” said Park Su-gil (not his real name), a 38-year-old subcontracting worker who worked at the factory after finishing his day job. “What kind of country is this?”

Park was recently reinstated after a two-month suspension over the factory occupation.

“Even today, subcontracting workers are using Hyundai Motor parts and reading directions written by Hyundai as the work in Hyundai Motor production facilities,” he said.

In terms of the Supreme Court ruling, this is a clear example of illegal temporary employment.

Both regular workers and the company are well aware of this.

“If there is a defect in a temporary employee’s work, a regular employee supervisor comes to point it out,” said Kim Man-cheol (not his real name) a 43-year-old regular employee who works in automobile assembly in Uijeongbu. “All of us working with them know that they are illegal temporary workers.”

A Hyundai Motor official said these workers “could be viewed as illegal temporary employees based on the Supreme Court ruling,” but added, “The court ruling is impossible to accept because it does not reflect the particular nature of the automobile industry.”

The Ministry of Employment and Labor (MOEL) previously ruled Hyundai Motor’s in-house subcontracting to be illegal temporary employment in 2004 and lodged an accusation, but prosecutors declined to press charges, giving the automaker a free pass. With the Supreme Court now recognizing the illegal nature of the employment, subcontracting workers are carrying out labor and legal battles in tandem.

From the company‘s standpoint, the in-house subcontracting system puts it in the catbird seat. Whereas other temporary workers, including contract and dispatch workers, have legal protections, no regulations exist for in-house subcontracting. They can be paid just half what regular workers make and are easy to dismiss. When the company wishes to fire them, it merely has to cancel its contract with the contractor, eliminating any need for a tug-of-war with workers.

For this reason, there has been a sharp increase in in-house subcontracting at large corporations, which should be creating regular positions in areas such as automobiles, shipbuilding, electronics, and steel. A recent trend has seen a proliferation of “no regular employee factories,” which only employ in-house subcontractors.

According to an analysis by the Korean Metal Workers Union policy research institute, it would cost approximately 120 billion won ($113.7 million) extra per year to convert Hyundai Motor in-house subcontracting workers to regular employee status.

“Given that Hyundai Motor has averaged around 2.5 trillion won annually in current net income over the past ten years, it could convert subcontracting workers to regular worker status with an investment of just 5 percent of this,” said Lee Sang-ho, a researcher with the institute. “Hyundai Motor needs to open its storeroom rather than just piling the money up in its coffers.”

The German automaker Volkswagen, which has emphasized the social role of companies, hired 400 dispatch workers as regular employees last year and plans to convert an additional 2,200 temporary workers to regular worker status this year.

Korean Committee of Irregular Workers’ Unions policy committee member Oh Min-gyu said, “The government has presented guidelines for in-house subcontracting, and politicians have come out with measures for addressing irregular employment, but it is all just for show without a solution to illegal dispatch employment, which is the heart of the irregular worker issue.”


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