Political Conflict Between Daewoo Shipbuilding & Marine Engineering Subcontractors Spreads (Comprehensive)

Largest Compensation Claim in History Against Workers
Labor Sector: "Erasing Survival Rights of Non-Regular Workers"
Expanding into Conflict Between Ruling and Opposition Parties
Bill to Limit Compensation Claims for Union Strike Losses
Proposed by Lawmakers Kang Byung-won and Lim Jong-sung, Among Others

On the afternoon of the 22nd of last month, when the subcontractor labor-management negotiations at Daewoo Shipbuilding & Marine Engineering were tentatively settled, Kwon Su-o, CEO of Noksan Enterprise and a representative of the partner company (third from the left), and Hong Ji-wook, vice chairman of the Metal Workers' Union, bowed in greeting after giving a briefing at the Okpo Shipyard of Daewoo Shipbuilding & Marine Engineering in Ajoo-dong, Geoje-si, Gyeongnam.
[Image source=Yonhap News]

[Asia Economy Reporter Choi Seoyoon] Daewoo Shipbuilding & Marine Engineering (DSME) plans to file a 47 billion KRW damages lawsuit against the subcontractor union executive committee as early as the 26th. This is to hold them accountable for production disruptions and resulting sales losses caused by a month-long union occupation protest. The union side has opposed the claim, saying, "We earn just enough to live month to month, so this amount is absurd." Meanwhile, in the National Assembly, the so-called ‘Yellow Envelope Act,’ which limits damages claims for union strike losses, is being promoted, reigniting the conflict between DSME and its subcontractor labor union.

On the 25th, a DSME official stated, "In principle, we plan to file a damages lawsuit worth 47 billion KRW against the subcontractor union executive committee within this week," adding, "The losses due to the strike amount to about 800 billion KRW, but as work has resumed, the sales decline is gradually decreasing, so we calculated the claim amount considering fixed cost losses excluding that." He further added, "If additional losses are confirmed, the claim amount may increase." The 47 billion KRW claim is the largest damages suit ever filed against workers.

The labor community strongly opposed, calling it "a measure to annihilate the basic labor rights and livelihood of non-regular workers." The Korean Confederation of Trade Unions (KCTU) Gyeongnam branch issued a statement immediately after the damages suit news broke, saying, "DSME did not take any responsible role during the struggle and worsened the situation by inciting conflict between unions," and "If they have no responsibility for employment, they should bear the responsibility for the losses themselves."

The Gyeongnam branch stated, "The DSME subcontractor union strike has raised several social issues," adding, "First, the multi-tier subcontracting labor market discrimination must not be left as is, and second, the structural discrimination against non-regular workers is a problem that can shake the foundation of society and must not be postponed for resolution." They emphasized, "As these social issues surfaced, subcontracted workers put down their desperate demands and resolved the struggle with trust in agreements and solidarity for social progress."

On the 27th of last month, Woo Won-sik, the head of the task force, is speaking at the 3rd meeting of the Democratic Party's Daewoo Shipbuilding & Marine Engineering Response Task Force (TF) held at the National Assembly in Yeouido, Seoul. The Democratic Party formed a party-level TF on the 20th of last month in response to the strike by subcontracted workers at Daewoo Shipbuilding & Marine Engineering.
[Image source=Yonhap News]

The conflict between DSME and its subcontractor labor union is spreading into the political arena. On the 3rd, ruling and opposition parties engaged in a sharp debate over DSME’s damages suit move during the National Assembly Environment and Labor Committee plenary session. Ruling party lawmakers argued for firm measures against illegal strikes, while opposition lawmakers countered that imposing hundreds of billions in damages claims on workers for strike legitimacy issues they find hard to uphold would destroy the unions.

Four bills known as the ‘Yellow Envelope Act (Amendment to the Labor Union and Labor Relations Adjustment Act)’ are currently pending in the National Assembly. The bills aim to restrict employers from filing damages lawsuits or executing provisional seizures for losses caused by union strikes. The bills were respectively proposed by Democratic Party lawmakers Kang Byung-won, Lim Jong-sung, Lee Soo-jin, and Justice Party lawmaker Kang Eun-mi. The name originates from 2014 when Ssangyong Motor strike workers were ordered by the court to pay 4.7 billion KRW in damages, and civic groups sent donations in yellow envelopes to support them. The bills were also proposed in the 19th and 20th National Assemblies but were discarded due to term expiration.

Meanwhile, the DSME subcontractor union began an indefinite hunger strike in front of the National Assembly on the 18th. They claim that the company is not honoring the ‘employment guarantee for union members of closed subcontractors’ agreed upon during collective bargaining. Kim Hyung-soo, head of the Metal Workers’ Union Geoje-Tongyeong-Goseong Shipbuilding Subcontractor Branch, said, "We discussed guaranteeing employment for 47 union members from four subcontractors that closed before and after the strike, and the company said they were not worried about employment issues due to severe manpower shortages and agreed to ‘make the best effort.’ This was confirmed together with the primary contractor DSME, but there has been no progress even after a month." Regarding this, an industry insider explained, "The representatives of partner companies are also making efforts, but it just takes time."

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