HMM Labor and Management Reach Dramatic Wage Agreement After 77 Days... Avoid Logistics Crisis (Comprehensive)

HMM Auckland Ship

[Asia Economy Reporter Dongwoo Lee] The labor and management of HMM, the largest domestic deep-sea container shipping company, have reached a dramatic agreement on wages and collective bargaining (wage and collective agreement) after 77 days since negotiations began in June. The resolution of the negotiations is expected to alleviate concerns about logistics chaos for domestic export companies due to strikes.

According to HMM on the 2nd, HMM President Bae Jae-hoon, Kim Jin-man, Chairman of the Land Labor Union, and Jeon Jeong-geun, Chairman of the Maritime Labor Union, signed the final wage agreement at HMM headquarters in Jongno-gu, Seoul, on the morning of the same day. The agreement includes a 7.9% wage increase and payment of 650% in encouragement and incentive bonuses.

The wage increase will be applied retroactively from January 1 of this year, and the encouragement and productivity incentive bonuses will be paid within the year. Additionally, labor and management agreed to form a jointly participating task force (TF) to work on restoring wage competitiveness and establishing a performance bonus system.

The negotiations were dramatically concluded after an overnight session starting at 2 p.m. the previous day. The final negotiation proposal lowered the wage increase rate by 0.1% compared to the revised proposal initially presented by management, but the union accepted an additional 150% performance bonus, leading to a dramatic agreement.

Previously, management and the land and maritime unions conducted four rounds of collective bargaining but failed to narrow their differences and applied for dispute mediation at the Central Labor Relations Commission. In response, management presented a final negotiation proposal including an 8% wage increase and 500% performance bonus as a mediation plan, which the land and maritime unions each voted against in separate approval votes. Subsequently, the Maritime Labor Union indicated its intention to submit collective resignation letters from about 300 union members to management, heightening tensions over the possibility of a strike. Through labor-management consultations, the Maritime Labor Union’s planned submission of collective resignation letters and the scheduled onboard protests until that day are expected to be temporarily suspended.

The industry is also relieved by the resolution of the negotiations. Export companies can avoid the direct blow of logistics chaos caused by the realization of a strike. There was analysis that if the union actually carried out a three-week strike, the resulting damage could reach 680 billion KRW.

HMM labor and management plan to devote themselves to becoming a global top-class shipping company based on this wage negotiation settlement.

An HMM official said, "We apologize for causing concern among the public that logistics chaos might occur due to prolonged negotiations. Considering the difficult circumstances such as COVID-19 and the impact of the shipping industry on the national economy, labor and management were able to reach an agreement by making mutual concessions."

Kim Jin-man, Chairman of the Land Labor Union, emphasized, "Although the agreement is not a wage increase level that satisfies union members, we could not stand by as concerns about logistics chaos grew. We agreed on a magnanimous level to complete the reconstruction of shipping." Jeon Jeong-geun, Chairman of the Maritime Labor Union, also said, "Since we conducted negotiations bearing the heavy burden of the shipping industry responsible for 99.7% of import and export logistics, we hope the public recognizes the hard work of the seafarers."

This content was produced with the assistance of AI translation services.