A high-altitude sit-in protest by subcontracted workers atop a 30-meter crane and on a factory rooftop at Hanwha Ocean’s Geoje shipyard has entered its ninth day. The protest, which began with demands for direct negotiations with Hanwha Ocean as the primary contractor, has entered a new phase after a court sided with the subcontract union. On the afternoon of Oct. 8, Hanwha Ocean is scheduled to hold separate rounds of collective bargaining with its regular workforce union, the Hanwha Ocean Branch, as well as two subcontract unions — the Geoje-Tongyeong-Goseong Shipbuilding Subcontract Branch and the Welliv Branch.
The subcontract negotiations became possible after the Seoul Administrative Court rejected Hanwha Ocean’s application for a stay of execution on Oct. 1. Previously, the National Labor Relations Commission had ruled that Hanwha Ocean was subject to collective bargaining with the Welliv Branch, a union representing workers at a partner company that operates employee cafeterias, commuter buses and related services. Hanwha Ocean challenged the ruling on the grounds that Welliv is an independent service provider and that Hanwha Ocean therefore should not be considered an employer for collective bargaining purposes. The court, however, rejected the application, finding that compliance with the obligation to post a collective bargaining notice was unlikely to cause irreparable harm.
Hanwha Ocean’s position is further complicated by the fact that negotiations with its regular union also remain unresolved. Management put forward a second proposal that included a base salary increase of 123,689 won ($92.48) and a one-time settlement payment of 6.5 million won, but the union rejected it, demanding a base salary increase of 149,600 won and an increase in the bonus rate to 900%. Tensions peaked on the morning of Oct. 8, when Kim Yu-cheol, chairman of the Hanwha Ocean Branch, joined the high-altitude tower crane protest to press demands for an extension of the retirement age and improvements to the performance-based compensation system.
The subcontract union has also maintained a hard line. Of the six subcontracted workers who began their sit-in on Sept. 30, two came down on Oct. 8 to attend the first round of negotiations, while the remaining four have said they will continue the protest until collective bargaining is concluded. They argue that because Hanwha Ocean has applied performance bonuses at the same rate to direct and subcontracted workers, subcontracted workers should also receive a fair share of performance-based compensation.
The shipbuilding industry’s broad order tailwind has now run into a labor dispute. Hanwha Ocean recorded $7.71 billion in orders this year, up 22% from the same period last year, but debt of about 12 trillion won and a high debt-to-equity ratio of 168% continue to weigh on the company. An industry official said, “In shipbuilding, meeting delivery deadlines is everything. If cranes — key production facilities — stop operating and production schedules are delayed, disruptions to future delivery schedules are unavoidable.”
Concern within the local community is also growing. Byeon Gwang-yong, mayor of Geoje, issued a statement warning that a prolonged protest could pose risks to worker safety and place a burden on the regional economy, and urged both sides to engage in constructive dialogue. Hanwha Ocean has said it will comply with its obligation to post a collective bargaining notice in accordance with the court’s decision, while maintaining that the question of whether it should be legally recognized as the employer of subcontracted workers must ultimately be determined through a ruling on the merits. Further friction is therefore expected as negotiations continue.
Source: Business Korea