This year’s wage and collective bargaining negotiations in the shipbuilding industry are drifting back into uncertainty just as they appeared to be nearing a conclusion. Following the rejection of a tentative agreement between HD Hyundai Heavy Industries and its union in a membership vote, a court ruling recognizing Hanwha Ocean’s obligation to negotiate with a subcontractor union has reignited labor tensions.

The labor union of HD Hyundai Heavy Industries announced that 52.14% of the 7,541 participating union members voted against this year’s tentative wage and collective bargaining agreement on Sept. 2, resulting in its rejection. The agreement was a record-breaking package worth an average of 40.56 million won, or approximately $30,129, per union member, including a 120,000 won increase in base pay and an 11 million won lump-sum payment, yet it still fell short of workers’ high expectations.

Last year, the union reached a final agreement only after two additional months of negotiations and a full strike following the rejection of a first tentative agreement. This year, with operating profit expected to roughly double from the previous year, the union is demanding a 30% share of operating profit, making the path to renegotiation far from smooth. The union plans to gather members’ opinions before formally requesting renegotiation with management, while keeping open the possibility of a full strike that had been announced for after the Chuseok holiday, as well as a potential joint strike with the Hanwha Ocean union.

Hanwha Ocean now faces a new set of bargaining challenges following a separate court ruling. The 13th Administrative Division of the Seoul Administrative Court rejected Hanwha Ocean’s application for a stay of execution, which the company had filed in opposition to a corrective order issued by the National Labor Relations Commission. As a result, Hanwha Ocean must engage in collective bargaining with workers at Welliv, a subcontractor responsible for in-house welfare and facilities management, pending a final ruling on the merits.

The court held that Hanwha Ocean’s obligation to engage in collective bargaining does not mean it must unconditionally accept the union’s demands and therefore found it difficult to conclude that the company would suffer irreparable harm. Notably, the National Labor Relations Commission had determined that Hanwha Ocean holds substantial control over the agenda items demanded by the Welliv union branch, including improvements to aging facilities such as the kitchen and commuter buses.

Hanwha Ocean stated that it would proceed with negotiations in accordance with the court’s ruling, while the Korean Metal Workers’ Union urged the primary contractor to fulfill its responsibilities immediately. Although Hanwha Ocean has been pressing ahead with daily negotiations since the Chuseok holiday, the combination of the subcontractor union branch’s high-altitude protest and the expanded scope of bargaining subjects means it is expected to take some time before a first tentative agreement can be reached.

That said, some observers note that the rejection rate at HD Hyundai Heavy Industries this time stood at 52%, lower than the 60% range recorded last year, and that the union has not yet launched a full-scale strike, raising the possibility that a second tentative agreement could be reached relatively quickly. Management expressed regret that an agreement described as the highest-level package in the shipbuilding industry had been rejected and emphasized that it would seek a solution with an eye toward sustainable long-term competitiveness.

Source:Business Korea