Recently, Hyundai Motor successfully completed five years of wage and collective bargaining discussions without any interruptions. But Kia is currently facing a tough battle in negotiations with its labor union. (Image courtesy of Yonhap News)
SEOUL, Sept. 25 (Korea Bizwire) – In the Korean automotive industry, there’s a big debate about something called “employment inheritance clauses.” Recently, Hyundai Motor successfully completed five years of wage and collective bargaining discussions without any interruptions. But Kia is currently facing a tough battle in negotiations with its labor union.
In this year’s wage talks, Kia’s management proposed increasing wages and introducing a performance-based pay system, similar to what Hyundai has. The company also offered to extend the retirement age, hire new employees, improve employee benefits, and invest in new Korean factories.
However, the labor unions are opposing Kia’s demand to change the “employment succession clause” in their agreement before hiring new employees.
The employment succession clause is a part of Kia’s labor agreement. It gives priority to hiring family members of union members who passed away due to illness while working, retirees, and children of long-serving employees (those who worked for 25 years or more).
Even though this clause has not been put into practice for a long time, it’s still part of the agreement and causes controversy every year. Hyundai got rid of a similar clause in 2019.
The Ministry of Employment and Labor believes that this employment succession clause goes against the principles of equality in the Constitution and the Employment Policy Basic Act. Last August, the ministry, along with Kia, ordered over 60 companies to remove the clause. These companies have either removed it or are in the process of doing so, with more than 50 already completing this process.
However, Kia has been unable to remove the clause due to resistance from the labor union. Kia has been asking the union to get rid of the clause every year since 2014.
The union argues that this year’s wage talks aren’t the right time to discuss this issue. Kia’s labor agreement is renewed every two years, but not this year, so they say this discussion can wait until next year. However, the company believes it should be discussed this year, even if the actual change happens next year.
Kevin Lee (kevinlee@koreabizwire.com)
