The union and management of Hyundai Motor finally reached a provisional wage agreement after a series of 14 strikes.

 

The collective bargaining on wage this year stalled with little progress due to the expansion of the wage peak system. The wage agreement was made, because the management withdrew the expansion of the wage peak system.

 

Seemingly the union has won the wage bargaining, as the company withdrew the demand for the expansion of the wage peak system which the union strongly resisted. Looking into the details of the wage increase, the base wage increment is 58,000 won(US$52) per month with annual 350% of performance pay, 3.3 million won(US$2.960) of incentive pay, 200,000 won(US$180) of gift vouchers and 10 Hyundai Motor shares.

 

However, the wage hike this year is comparatively moderate and it can provide the company with an opportunity to establish the two-tier wage system for the new recruits which the company has long desired. The base wage differential between the existing worker and the new recruit is 28,000 won(US$25.15).

 

The composition of wages at Hyundai Motor is the ordinary wage with overtime pay, performance pay and bonuses which are evenly distributed into four segments.

 

When the business slows down, overtime pay and performance pay and bonuses will shrink. This means that the workers' wage will go down. This year the mobilization of Hyundai Motor workers was strong enough to stage a series of 14 strikes, due to the economic slowdown and sluggish car sales.

 

The provisional wage agreement should be endorsed by the union members through the votes for its finalization.

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