Bargaining over the wage and collective agreement in the shipbuilding industry is showing signs of dragging on. Among the three major shipbuilders (HD Hyundai Heavy Industries, Hanwha Ocean, Samsung Heavy Industries), Samsung Heavy Industries wrapped up wage talks first on the 23rd of last month, while HD Hyundai Heavy Industries and Hanwha Ocean are struggling to reach labor-management agreements.
HD Hyundai Heavy Industries must resume bargaining after a tentative agreement reached by labor and management on the 30th of last month was voted down in a union (Korean Metal Workers’ Union HD Hyundai Heavy Industries Branch) membership vote on the 2nd of this month. The union leadership is expected to raise pressure on management in additional talks, including a general strike, reflecting members’ dissatisfaction with the tentative agreement.
The situation is more complicated for Hanwha Ocean. Hanwha Ocean must hold simultaneous talks not only with the regular workers’ union but also with the subcontractor union (Korean Metal Workers’ Union Geoje-Tongyeong-Goseong Shipbuilding Subcontractors’ Chapter) and the union of Welliv, a partner company that operates cafeteria and commuter bus services (Welliv Chapter). This comes after a court on the 1st ordered Hanwha Ocean to include the Welliv Chapter as a party to collective bargaining, siding with the subcontractor union.
According to the shipbuilding industry on the 7th, labor and management at HD Hyundai Heavy Industries are preparing to renegotiate after the tentative agreement was rejected with 52.14% opposed in a union membership vote on the 2nd. The union leadership is said to be gathering members’ views.
An HD Hyundai Heavy Industries official said, “The schedule to resume talks is still undecided, and we will set it in consultation with the union.”
Earlier, on the 30th of last month, labor and management at HD Hyundai Heavy Industries drew up a tentative agreement centered on a flat monthly base pay raise of 120,000 won (including 50,000 won for step increases), a lump sum of 11 million won and a 200% order-competitiveness support bonus (based on the stipulated wage), and a performance bonus. The agreement was reached just before President Lee Jae-myung was scheduled to attend the launching ceremony for the third Aegis destroyer (Daehokimjongseo) at the Ulsan shipyard.
According to labor and management, the tentative agreement would have an average wage increase effect of 40.56 million won, 10.61 million won higher than last year. However, the tentative agreement did not include the union’s core demand in this year’s wage talks to pay “at least 30% of operating profit as a performance bonus.” The base pay increase is also lower than in 2024 (130,000 won) and 2025 (135,000 won).
An industry official said, “It appears the linkage of profit-sharing to company earnings and the size of the fixed wage increase fell short of union members’ expectations and failed to win support,” adding, “There are also loud calls urging the union leadership to stage a general strike.”
Hanwha Ocean plans to begin talks on the 8th with the subcontractor union (Geoje-Tongyeong-Goseong Shipbuilding Subcontractors’ Chapter) and the partner company union (Welliv Chapter). This follows a court on the 1st rejecting Hanwha Ocean’s application for an injunction to stay the Central Labor Relations Commission’s ruling that Welliv Chapter be included as a party to collective bargaining.
The 13th Administrative Division of the Seoul Administrative Court dismissed Hanwha Ocean’s application to stay the “order to correct the public notice confirming the union requesting bargaining” issued against the Chairperson of the Central Labor Relations Commission. As a result, the commission’s view that Hanwha Ocean must include the Welliv Chapter in the public notice confirming the union requesting bargaining stands. The court found it hard to see a risk of irreparable harm because management is not necessarily required to accept union demands simply by engaging in collective bargaining.
Since March, after the yellow envelope law (amended Trade Union and Labor Relations Adjustment Act) took effect, the Geoje-Tongyeong-Goseong Shipbuilding Subcontractors’ Chapter has demanded that management hold joint talks with the union of Welliv, a Hanwha Ocean partner that runs cafeterias, commuter buses and laundries at Hanwha Ocean’s Geoje site (Welliv Chapter). The Geoje-Tongyeong-Goseong Shipbuilding Subcontractors’ Chapter includes about 170 workers from small and midsize shipyards in addition to Hanwha Ocean. Fewer than 100 are Hanwha Ocean subcontracted workers. The Welliv Chapter has about 450 members.
Hanwha Ocean has maintained that it will not engage in collective bargaining with the Welliv Chapter. Management says Welliv is a service outsourcing agency contracted with the company through competitive bidding, not a party to an employment contract, and therefore the company’s status as employer cannot be recognized.
In July, Hanwha Ocean filed an administrative lawsuit and sought a stay of execution with the Seoul Administrative Court, challenging the Central Labor Relations Commission’s ruling recognizing the company’s employer status with respect to the Welliv Chapter. The company said it would seek a court judgment on the scope of recognizing employer status between a principal contractor and a subcontractor.
Hanwha Ocean said on the 7th, “The court’s dismissal of the application to stay execution is a decision limited to the obligation to make a simple public notice (the public notice confirming the union requesting bargaining), and the court found that fulfilling the notice obligation alone does not immediately impose an obligation on the principal contractor (Hanwha Ocean) to agree to collective bargaining or conclude a collective agreement,” adding, “Whether employer status is recognized will be determined in the ruling on the merits.”
Hanwha Ocean has also yet to find common ground with the regular workers’ union. Since the 30th of last month, labor and management at Hanwha Ocean have shifted from holding talks twice a week to negotiating every day.
Source: ChosunBiz