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[Newsmaker]Massive compensation order alarms unions

Ssangyong Motor workers stage a protest in Pyeongtaek, Gyeonggi Province, Friday. (Yonhap News)
Ssangyong Motor workers stage a protest in Pyeongtaek, Gyeonggi Province, Friday. (Yonhap News)

A local court sounded alarm bells for illegal, violent strikes with a massive compensation order against unionized workers at Ssangyong Motor on Friday.

A district court in Pyeongtaek, Gyeonggi Province, ordered union members of Ssangyong Motor Co. and other activists to pay 4.6 billion won ($4.3 million) to the company and police for damages incurred during their violent strike in 2009.

It is the largest compensation order in Korea, which has been internationally noted for its labor militancy and violent strikes. Automaker unions are the nation’s most powerful and hard-line labor groups.

“The defendants should be held liable for compensation as they participated in violent strikes that lacked legitimacy,” Judge Lee In-hyeong said in his ruling.

Following massive layoffs by the country’s smallest carmaker in early 2009, hundreds of workers staged a 77-day strike at its factory in Pyeongtaek, some 70 kilometers south of Seoul, resulting in a violent clash between the union and police officers.

Ssangyong’s management and police each filed separate lawsuits against the union, seeking damages worth 15 billion won and 1.46 billion won, respectively.

Management argued that production was disrupted, while police claimed that 49 officers were hurt and equipment was destroyed by strikers during the standoff.

Ruling in favor of the plaintiffs, the Pyeongtaek branch of the Suwon District Court ordered the union to pay 3.3 billion won to the company and 1.3 billion won to the police.

“We expected the court to make a wise judgment, but it ordered an astronomical amount of compensation, which we cannot afford to pay and which will inflict unimaginable trouble to workers,” the union said after the ruling.

Ssangyong laid off thousands of workers in 2009 after it was put under court receivership in the aftermath of the 2008 global financial crisis. Some 1,900 employees chose voluntary redundancy, while 159 were dismissed and 455 were forced to take unpaid leave.

In January of this year, the company agreed with its union to reinstate the workers who had been on unpaid leave, saying its financial status had improved to the point where it could employ the workers, as its sales were recovering and its losses were shrinking.

However, the retired and dismissed workers were not subject to reinstatement.

The carmaker is now owned by Indian automotive group Mahindra & Mahindra Ltd., which acquired Ssangyong Motor from Chinese automobile manufacturer Shanghai Automotive Industry Corp. in 2010.

(From news reports)
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