Indictment of Hyundai Motor executives could be landmark for labor-related cases

Posted on : 2017-05-25 17:15 KST Modified on : 2019-10-19 20:29 KST
Prosecutors have typically approached union cases with the employers’ interests in mind; that could be about to change
Kim Soon-seok
Kim Soon-seok

Prosecutors’ indictment of Hyundai Motor executives and the company’s corporation as “co-offenders” in union-busting tactics by subcontractor Yoosung Enterprise comes six years after the incident in question. But it could also be a dramatic break with their previous approach to investigations of labor-related cases, where enforcement of the law was typically focused on the employer’s interests. With a new administration emphasizing protections on basic labor rights means the next question is whether Prosecutors will begin more aggressively punishing anti-union crimes.

In a May 24 indictment against four executives of Hyundai Motor on charges of violating the Trade Union and Labor Relations Adjustment Act with their involvement in Yoosung Enterprise’s union-busting efforts, the Cheonan branch of the Daejeon District Prosecutors’ Office listed Hyundai Motor as a “co-offender” alongside Yoosung. One of the four, surnamed Choi, was head of the moving parts development office in the Hyundai Motor purchasing headquarters at the time of the anti-union activities in Sep. 2011.

In May 2011, a labor-management dispute at Yoosung - including union strikes and a lockout - resulted in Hyundai Motor experiencing difficulties with its parts supplies. As the more powerful side in the subcontracting relationship, Hyundai pressured Yoosung by saying it would have “no choice but to reduce orders in line with our delivery structure partitioning program if a stable production system, without the potential for a parts shortage, is not established by late 2011.”

At the time, Yoosung had encouraged workers closer to the company to create a second union to weaken and undermine the influence of the Korean Metal Workers‘ Union (KMWU, an umbrella group that the first union belongs to), which was then in conflict with management. Yoosung explained to Hyundai that it would “increase membership in the second union to ensure there is no parts shortage.” Far from trying to prevent Yoosung from taking unjust action against the union, Hyundai instead assigned and managed a timeline of second union enrollment targets. It also reprimanded Yoosung when membership failed to meet the desired levels, and summoned Creative Consulting officials to its head office in Seoul’s Yangjae neighborhood for meetings.

Prosecutors determined that Hyundai Motor‘s actions constituted “conspiracy” to engage in unjust labor actions with Yoosung to ensure a smooth supply of parts. Kim Sang-eun, an attorney representing the Yoosung chapter of KMWU in its suit against Hyundai Motor, called the indictment “significant in that [prosecutors] indicted Hyundai Motor as a co-offender, noting that this was not simply a matter of Hyundai Motor abetting Yoosung but of Hyundai Motor’s and Yoosung’s interests coinciding.”

The case is the first in Hyundai Motor history of its executives being targeted for criminal punishment in connection with a subcontractor’s actions. In Dec. 2013, prosecutors moved to dismiss charges against the ostensible “culprit” in the case, Yoosung chairman Yu Si-yeong. The trial began after the court decided in Dec. 2014 to accept the union‘s application for adjudication. Meanwhile, precedents for employers being recognized as liable for unjust labor actions in connection with their subcontractors’ unions were being set in the wake of a 2010 Supreme Court ruling finding Hyundai Heavy Industries responsible for the dismissal of employees by shutting down an in-house subcontractor where a union had been established.

“Prosecutors have traditionally been seen as closer to management, so it’s significant for them to indict the hiring company on charges of unjust labor actions,” said Soonchunhyang University labor law professor Cho Kyung-bae.

“Union busting is destructive to the Constitution. The only way to eradicate unjust labor activities is to sternly punish them when they are committed by main employers who neglect labor rights,” Cho said, adding that Prosecutors “need to show a firmer commitment to enforcing the law.”

The labor committee for the group MINBYUN-Lawyers for a Democratic Society commented on the move in a statement on May 24.

“The court needs to impose a heavy sentence on the Hyundai Motor officials indicted to send the message that the strategy of undermining a democratic union at one of its parts supplies is in serious violation of the law,” it said.

The statement also called for “intense monitoring and criticism of Prosecutors’ biased exercise of indictment authority in labor-related cases.”

By Park Tae-woo, staff reporter

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