Homeplus 'First Bloodless Labor Agreement in 4 Years': How Was It Possible? "Concession in Difficult Times" Labor and Management Join Hands

4.7% Flat Rate Increase Higher Than Competitors
Union Also Accepts as "Company's Bold Decision in Difficult Times"

Lee Je-hoon, President of Homeplus (center), Joo Jae-hyun, Chairman of the Homeplus Branch of the Mart Industry Labor Union (right), and Lee Jong-sung, Chairman of the Homeplus General Labor Union, are posing for a commemorative photo after the signing ceremony of the '2022 Wage Agreement' at the Homeplus headquarters in Deungchon-dong, Seoul, on the 12th. (Photo by Homeplus)

[Asia Economy Reporter Jeon Jinyoung] Homeplus has reached a wage negotiation agreement without conflict for the first time in four years. Until now, Homeplus was known in the industry as a place where labor-management conflicts frequently occurred ahead of wage negotiations. However, this time, labor and management reportedly reached a smooth agreement with the consensus of "not letting the negotiation drag into the new year during difficult times such as COVID-19 and rising prices."

According to industry sources on the 17th, Homeplus concluded the wage negotiations, which started this summer, on the 12th. The wage increase rate is 4.7%, and the gift certificate amount given during the Lunar New Year and Chuseok holidays will also increase from the previous 50,000 won to 100,000 won.

During the COVID-19 period, Homeplus experienced continuous conflicts between labor and management over wage negotiations and store reductions. In 2020, the union proposed an 18.5% increase, but the parties could not narrow their differences. After more than 20 meetings, they finally agreed on a 3.7% increase two years later. Even afterward, the union staged a total strike during the holidays in response to store closure announcements.

However, this time, there is an atmosphere that both sides made concessions considering the difficult times. In fact, Homeplus has suffered from deteriorating performance for several years, with sales and operating profits declining, and last year it fell into an operating loss. Additionally, with the worsening external environment such as economic downturn, it is currently difficult to seek a rebound. An industry insider said, "In the recent wage negotiations at E-Mart, the increase rate varies by rank from 3% to 5%, but Homeplus applied a flat 4.7% increase except for store deputy managers and head office supervisors, which shows some concession from the management side." A union official said, "More than 90% voted in favor during the tentative agreement vote. We believe the company made a significant decision during these difficult times, and the union accepted it. This allowed us to narrow differences smoothly."

The urgency to conclude the negotiations quickly also played a role. Currently, Homeplus has repeatedly delayed wage negotiations due to strikes during the COVID-19 period. The recent negotiations decided this year's wages at the time when next year's wage increase rate is determined, meaning the process has been delayed by a year. Internally, there are voices saying, "Both labor and management must have felt the burden of prolonged negotiations."

However, the negotiations scheduled for next year may again become a source of conflict. Next year, Homeplus will conduct wage negotiations and collective bargaining simultaneously. It is also a variable that it will be difficult to offer the same increase rate as this time given the lack of business performance. Currently, the Mart Union Homeplus branch claims, "Considering internal and external circumstances, next year's wage negotiations do not look easy." However, Homeplus stated, "Since the wage negotiations have now been concluded, nothing has been decided or announced regarding next year's wage and collective bargaining negotiations."

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