Hyundai Motor's union declares breakdown in labor talks before start of summer break

ULSAN, July 31 (Yonhap) -- Union leaders of South Korea's top automaker on Thursday declared a breakdown in wage talks before workers take time off for summer break. 

The announcement, which followed the 14th wage and collective bargaining agreement negotiation at the carmaker's main production plant in this industrial city 414 kilometers southeast of Seoul, claimed workers have reached the end of their patience and laid the blame for the lack of progress on prevarication by the management.

Management-side officials said it was regretful that workers prematurely declared a rupture in the talks, when the company has made clear it wants to touch on all issues raised by employees so a middle ground can be found.

"Hyundai Motor is an important player in the national economy and we owe it to our business partners, parts suppliers and the people not to cause unnecessary anxiety," an executive said. The move by the union may be a sign that it is laying the groundwork for a strike, or at the very least making clear it will stick to its demand in regards to expanding the scope of standard wages.

Reflecting such concerns, workers said they have submitted a request for arbitration to the National Labor Relations Commission, a required step before they can legally walk out if no settlement is reached.

Labor leaders said the main sticking point to negotiations has been management's persistent refusal to count regular bonuses as part of standard pay. They said this conflicts with the Supreme Court's ruling on the matter.

The country's highest court made a landmark ruling in December that said all fixed bonuses should be counted as standard wages.

The ruling expands the scope of standard wages that can affect allowances given out to workers for overtime duties and the amount of severance pay that employees receive when they retire.

Hyundai Motor, however, argues that its bonuses were not given uniformly or unconditionally to all workers, so it did not meet the court's criteria. It also said a separate legal battle that specifically addresses Hyundai Motor's wages is under way, so it only makes sense for this ruling to be made before it decides on any wage increase.

If no headway is reached, the union can hold a general meeting of employees in mid-August to receive input on a future course of action. It can then hold a vote to decide on a walkout. The workers go on summer leave next week.

While Hyundai Motor has been slow to make headway, workers at GM Korea Co., who already reached an understanding on wage increases for this year, endorsed the labor-management pact in a vote earlier in the day. Of all workers that cast a vote, 54.7 percent approved the pact.

The management agreed to include regular bonuses as part of its standard salary, with the move being applied retroactively from March.

The carmaker will also increase basic pay by 63,000 won (US$61.50) per month and give workers 6.5 million won as a special bonus.