Subcontracted labor unions are also increasingly demanding performance bonuses, in the backlash from the Yellow Envelope Act
Members of the Korea Metal Workers’ Union’s Hyundai Steel irregular workers chapter hold a press conference in front of the National Assembly in Yeouido, Seoul, on March 25.
Subcontracted labor unions at SK hynix will hold a rally on April 30, demanding that they should not be discriminated against primary contractor employees who received performance bonuses worth hundreds of millions of won. They argued that only the primary contractor had enjoyed the benefits of record-high earnings, calling it “discrimination against subcontracted workers.”
At the same time, subcontracted labor unions at Hyundai Mobis have moved into strike action, demanding opposition to the sale of its lamp business division and negotiations with the primary contractor.
With the Samsung Electronics union warning of an “unprecedented strike” in May, storm clouds of labor unrest are gathering one after another at semiconductor and automobile production sites, the country’s main export industries. Semiconductors and automobiles account for nearly half of domestic exports.
If shutdowns, or temporary suspensions of operations, become a reality, the country could be pushed toward an export cliff.
According to industry sources on April 29, subcontracted labor unions will hold a rally in front of Building 3 at SK hynix’s Cheongju plant on April 30, demanding negotiations with the primary contractor. The P&S Logis branch, a subcontracted labor union, had previously held a rally with the same demands on April 20.
The subcontracted labor unions said, “SK hynix broke its quarterly operating profit record in the first quarter of this year, but the lives of subcontracted workers have become even harder,” adding, “The gap in wages and performance bonuses between the primary contractor and subcontractors has reached an unimaginable level.”
They continued, “Regular employees’ annual salaries approaching 200 million won ($135,777) and performance bonuses worth hundreds of millions of won have reduced subcontracted workers’ labor to nothing more than secondary labor,” and claimed, “We cannot help but ask whether SK hynix’s brilliant achievements have nothing to do with subcontracted workers.”
The situation at Hyundai Mobis is no less unsettling. Following the full-scale strike launched on March 27 by the unions of subcontractor Gyeongju IHL and Gimcheon Unituse over the proposed sale of the lamp division, the office and research staff union at Hyundai Mobis headquarters in Seoul has also launched a solo relay protest against the sale.
The union declared, “This is not a simple matter of reorganizing a business unit, but a critical issue involving core future vehicle technologies and the employment security of our members.”
In the automotive sector, a shutdown at even a single parts supplier can bring an entire finished-vehicle production line to a halt. Currently only two subcontractors have gone on strike, but if all 25 subcontractors were to act together, Hyundai Motor and Kia factories would also grind to a standstill.
The Korea Metal Workers’ Union, which includes five Hyundai Motor Group affiliates, has announced a general strike for July 15, demanding the right to negotiate directly with primary contractors.
Since the Yellow Envelope Act took effect on March 10, and following SK Hynix’s payout of a performance bonus equivalent to 10% of operating profit, the specter of strikes has been spreading across industrial sites throughout the country.
According to the National Labor Relations Commission, a total of 294 cases related to the employer status of primary contractors were filed with labor commissions in the one month following the enforcement of the Yellow Envelope Act.
Given that semiconductors and automobiles are the backbone of South Korea’s export economy, a shutdown becoming a reality could deliver a devastating blow to the country’s export performance.
According to the Ministry of Trade, Industry and Energy, semiconductor exports from January through March of this year totaled $69.6 billion, while exports of automobiles and parts came to $20 billion. The two categories account for 34.9% and 10.0% of total exports respectively, representing nearly half of the total.
Kim Dae-jong, a professor in the Department of Business Administration at Sejong University, stated, “The government must respect autonomous labor-management negotiations, but given the enormous impact on the national economy, it is now time to support the creation of an environment grounded in rational mediation and the rule of law.” He added, “To secure the industrial competitiveness needed for the era of the Fourth Industrial Revolution, pro-labor policies such as the current Yellow Envelope Act must be reconsidered.”
Jung Suk-yee
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