Strike Wave in Hyundaï

Labor Law Issues. The current general strike has a political character in that it resulted from the deterioration of the labor law by an authoritarian state. The debate over labor law reform has been at the forefront of industrial relations since 1980. Until now, a significant labor market manifestation of Korea's strategy for economic development was "controlled" industrial relations. A crucial aspect of the new labor law is control of labor. Authoritarian rule over industrial relations changed in 1987. This helped improve Korea's industrial relations by making it easier for trade unions to organize workers. As a result, trade unions have expanded their activities, and the range of issues open to bargaining between labor and management has increased. Since 1990, the government has returned to its old ways. The government has tried to set up tripartite bodies among labor, management, and government at the national level to help stabilize wage increases. In 1992, the state introduced a total wage system and/or one-digit policy in order to limit wage increases in the public sector. Simultaneously, the government proposed labor law amendments to weaken the union movement. It claimed that the unions were partly responsible for Korea's loss of international competitiveness. This plan faced strong opposition from the union movement and the government withdrew its proposal. In 1996, the government set up the reform committee for industrial relations law through which representatives from labor, as well as management and public interests, were commissioned to propose an acceptable framework of labor law amendments. However, this committee failed to agree concerning this concept. Nevertheless, the ruling party railroaded this controversial bill through the National Assembly in the absence of opposition lawmakers on December 18, 1996. They have argued that labor market institutions are too rigid in protecting workers and, with the growing pressure of increasing international competitiveness, some changes will have to be made to enhance the flexibility of the labor markets.

The new labor law delays authorization of multiple unions at the nationwide federation level until 2000. The administration-draft bill hat promised to lift the ban this year. This new law delays the authorization of the Korean Confederation of Trade Unions (KCTU) three years from the government's earlier promise. KCTU, an unauthorized national union body with 500,000 members, called an indefinite nationwide strike until the new labor law is retracted. The major issues of the new labor law are as follows:

1) Employers may downsize the payrolls when the company is going through financial deterioration, and change of business for the enhancement of productivity. Employers must consult with the trade union or the workers' representative before the lay-off is made.

2) If a documented agreement between the employers and trade unions is made, workers shell be allowed to work a maximum of 56 working hours per week without overtime pay premium on the a monthly basis.

3) When trade union and the employers agree, flexible work time shell be introduced in the by-laws of the company, allowing the workers to clock-in and to clock-out at their own discretion within a one month period.

According to the new law, an employer may dismiss, lay off, suspend, transfer or adapt for the flexible wage system. It is mean that the monthly wage of workers must decrease. Overtime allowances are the most important categories in the wage system in Korea. The proportion of overtime allowance among the total monthly wage is over one third. On the other hand, workers, especially union activists, fear management may lay them off to weaken the union movement. Actually, workers have difficulty concerning employment security. Finally, this political-economic climate appears to be the cause of a general strike. The government warned against illegal strikes saying that they would be strictly dealt with. The government called on unionists to use moderation, asserting that the new labor bill was aimed at reviving the vitality of the national economy, and promised that the government will see to it that employers would not abuse the lay-off system. Employer associations also promised to exercice extreme caution in managerial rights, ensuring maximum job security for employees by limiting lay-off to urgent crisis situations and saying that there would be no wage decreases for workers caused by the flexible work-hour system.

Strike in Hyundai Motors. The labor crisis in Hyundai escalated again this year as the Hyundai union intensified its strike in protest to the new national labor law. December 26, 1996, unionists at Hyundai Motors immediately went on strike. After a 2-weeks strike, workers at Hyundai Motors returned to work for two to six hours a day. However, Hyundai Motor Co. decided to shut down its major plant on January 10, 1997, because the normal operation of the company was impossible due to the strike. Unionized Hyundai workers said they will ignore the company's decision and continue their protest rallies at the plant. In a protest march of some 20,000 Hyundai workers towards Ulsan City Hall, a young worker attempted self-immolation during clashes with riot police by pouring flammable liquid over his body and shouting, "Abolish the bad labor law". On January 11, 1997, 30,000 workers participated in a rally called "The prayer meeting for the recovery of a young worker by burning himself". Hyundai Motors Co. management sought to stop the week-long lockout and to re-open auto plants as early as possible. Hyundai management requested that workers resume operation on January 16, 1997. Union workers of Hyundai decided to temporarily halt more than three weeks of strikes. Hyundai Motors said the factory was partially in operation since January 20, 1997, but the rate of production was under 20% with the production line not in full operation.

Since January 25, 1997, the labor union worked all night Saturday and through early Sunday voluntarily to make up for work lost during the strike. The overtime work resulted in additional production of 2,900 vehicles, the company said on January 26, 1997. Hyundai's union members, some 10,000 strong, continued to work through 8 a.m. Sunday after regular shifts Saturday morning had ended at 5 p.m., putting in 10 hours of overtime. Union officials said, "The company's production losses from the strike amounted to substantial sums, and in view of the fact the company management had decided not to seek legal retributions against the union over the strike, we at the union have decided to do our share in making up for the losses by extending our work hours".

In the wake of the month-long strike, Hyundai is currently having difficulty paying workers for the first time in 20 years. In fact, Hyundai management announced earlier this week that the company could not help delaying its workers' monthly pay due to financial problems caused by the recent strike. Workers are facing tough times, with unpaid wages an aftermath of the strike. A psychological burden is prevailing among workers because the company insists that striking workerswill be given no wages according to the "no work no pay" principle. This policy will no doubt led to new labor disputes this Spring. The union leadership has made a very deliberate approach to labor-management relations, in contrast to former militant union leadership. They have tried to have more open communication with management. They have made joint efforts with management to transform the existing confrontational labor-management relations into a cooperative partnership. The union leadership led to the promotion of increased production units and improved quality. If the company will hold the rigid wage policy, the labor-management relations may become more confrontational. Under the pressure of union representatives and activists at the plant level, union will likely force management to resolve this issue through bargaining. Post-strike dilemmas are evident within both labor and management. Hyundai's labor-management relations will be enter new testing period.

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