12 December, 2010
In August, this Contract and Agency Labour newsletter reported that the Supreme Court of Korea had issued a groundbreaking ruling that in-house subcontract workers employed for two years at Hyundai Motor in Ulsan, South Gyeongsang province, must be made permanent employees.
On 12 November, a similar ruling was made, this time by the Seoul High Court. This case was brought by seven former subcontract workers at the Asan Plant of Hyundai Motor. In line with the Supreme Court decision, the ruling states that in-house subcontractors’ employees, who worked continuously for two or more years, should be treated as the employees of the user enterprise.
The Seoul High Court ruling is particularly significant as it has broad coverage over several production departments at the plant.
Shortly after the Korean Supreme Court ruling on 22 July, the Korean Metal Workers' Union (KMWU), asked Hyundai to conduct collective bargaining with the union over direct employment for the subcontract workers. But Hyundai Motor refused, stating that it would appeal the Supreme Court decision.
On 4 November, KMWU filed a lawsuit against Hyundai demanding that a total of 1,900 in-house subcontractors with service of two or more years should be made full-time Hyundai workers, moved into regular jobs, and compensated for lost wages. (On average, contract workers at Hyundai earn 50 to 60% less than that of direct employees.)
On 5 November, KMWU submitted an application for mediation of an industrial dispute over collective bargaining with Hyundai Motor to the National Labor Relations Commission.
The Supreme Court’s ruling, and Hyundai’s intransigence in elevating subcontract workers to permanent status, has spurred workers to dramatically disrupt production at the Ulsan city factory in continuous sit-in strikes that began on 15 November. (See the ICEM CAL newsletter article on the Hyundai strike here.)