Hyundai Motor Group’s announcement Monday to embrace all of its subcontractors has become the talk of the town.
Pundits are watching whether other companies suffering similar problems will follow suit.
The world’s fifth-largest automaker announced that the labor union and management of Hyundai Motor have agreed to gradually hire outsourced workers at its manufacturing plants as regular staff.
The number of such employees has been pegged at 2,000 by 2017, which will consistently increase so that all workers at Hyundai Motor’s manufacturing sites will be guaranteed regular work contracts in the foreseeable future. This plan covers workers of Hyundai’s outsourcers who are dispatched to its manufacturing sites, with the same duties and working environment as the regular workers.
The Monday announcement was based on a consensus between the management and subcontractors’ union of Hyundai Motor. In return, the two parties agreed to drop all civic and criminal suits against each other. Hyundai will support subcontractors laid off from the outsourcing companies to find another job if the company cannot rehire them.
“Also, we have set a quota for subcontractors at regular position openings from 2018 so that one day all of the subcontractors can become regular workers,” a Hyundai spokesman said.
Hyundai Motor Group’s flagship company hopes that the agreement will thaw the ice at its manufacturing sites stemming from contract inequality: According to the company, the average payroll of its regular workers stands at 98 million won ($83.5 million) but that of subcontractors is 60 million won, and Hyundai’s benefit package is way above that of subcontractors.
“Since many of the subcontractors are youngsters, the direct employment will secure a better environment for a long period of time,” a Hyundai spokesman said. “Now that the issue has been settled, we will take a more aggressive role in creating good-quality jobs for the society and contribute to the nation’s economy,” the company stated.
The announcement came five years after the Supreme Court ruled that Choi Byeong-seung, a subcontractor at Hyundai’s Ulsan plant, should be recognized as a regular worker because he had worked an equal amount of time under equal working conditions, and thus the subcontract status should be regarded as ineffective and invalid.
The ruling made little change to the company, which cited the extra cost of hundreds of billions of won and claimed it caused a rift between the management and the subcontractors’ union, resulting in violent activities.
But after being hit hard with accusations, lawsuits, demonstrations and public censure, Hyundai Motor has agreed to upgrade about 4,000 of such contracts since 2013.
However, there are issues still on the table.
Whether subcontractors will be able to have their careers fully recognized upon contract renewal is yet unclear. Since the length of their career discerns their salary in the seniority-based system, it is extremely important for their careers that their full length of service is acknowledged. But the issue remains in a gray area.
The fact that the 2,000-plus regular position will be included in the already-promised 36,000 jobs to be created in the entire business group by 2018 is also a disappointment to tens of thousands of jobseekers vying for the limited number of openings in the company.
Moreover, the rule does not apply to the subcontractors at Kia Motors’ manufacturing plants, the sibling carmaker under Hyundai Motor Group. “(When it comes to Kia) we have a long way to go,” a group insider said.
Most of all, such an agreement did little to impress the rather-hawkish Hyundai Motor labor unionists, who have turned down overtime since Monday after wage negotiations ended fruitlessly. The management declined to comment but assumes tens of billions of won in losses if the sabotage continues through the weekend and results in the scheduled full-strike from next week.
To make matters worse, unionists of Kia on Wednesday also cast their ballots for a possible strike.
By Bae Ji-sook (email@example.com