Hyundai Steel Labor and Management Continue 'Strong vs. Strong' Confrontation...Legal Basis for 'Workplace Lockout'

The labor-management conflict at Hyundai Steel, centered on the scale of performance bonuses, is reaching a peak due to the company's decision to implement a 'workplace closure.' After the labor union (union) carried out several partial strikes since last month, Hyundai Steel decided to shut down the factory and withhold wages from union members.

On the 24th at noon, Hyundai Steel partially closed some facilities at the Dangjin Steelworks located in Dangjin City, Chungnam Province. It is estimated that 80 to 90 union members have stopped working due to this closure. Workplace closure is a system defined as a right of the employer under the Labor Union and Labor Relations Adjustment Act. The facilities halted by this decision correspond to the early process stage of cold-rolled steel sheet production. However, if the labor-management conflict continues, there is a high possibility that workplace closures will also occur in the subsequent process lines due to the continuous nature of the production process. The total number of union members engaged in cold rolling at the Dangjin Hysco branch is 557.

As Hyundai Steel implemented a partial workplace closure on some lines of the cold rolling mill at the Dangjin Steelworks amid union strike actions, the interior of the cold rolling mill was seen completely empty on the previous day (24th). Photo by Yonhap News

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The company has firmly stated that the workplace closure will continue "until the end of the dispute," but the union shows no signs of backing down. A representative of the Hyundai Steel Dangjin Hysco branch of the Metal Workers' Union Chungnam branch said, "If the company does not take a progressive stance, we will continue the dispute." Four other branches besides Dangjin Hysco (Suncheon, Pohang, Incheon, Dangjin) are raising funds to support the union's ongoing struggle.

The key requirement for workplace closure stipulated in Article 46 of the Labor Union Act is that the closure must occur "after the union has commenced a dispute." Stopping wage payments as a preemptive measure before any dispute action is taken does not meet the requirements and is therefore not legally permitted. Of course, the legitimacy of workplace closure is often ultimately decided by court rulings, and past court precedents generally hold that workplace closures should be implemented restrictively when the balance of power between labor and management is broken and the employer is at a significant disadvantage.

Hyundai Steel Dangjin Steelworks.

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Hyundai Steel's management argues that since the union began dispute actions on the 21st of last month, the workplace closure starting on the 24th cannot be seen as a preemptive measure but rather as an unavoidable action. A company official said, "Frequent strikes have undermined operational stability, and the company has suffered enormous losses." The company also cited the potential deterioration of its financial soundness as a reason why the workplace closure was inevitable. Hyundai Steel estimates that the total amount of performance bonuses (450% of base pay + 10 million KRW) proposed by management will reach 400 billion KRW.

The union points out that the company's refusal to accept labor at the post-process production line is a "de facto workplace closure trick." The union also announced plans to take legal action in the future. Since the 21st of last month, the union has continued several partial strikes on annealing and rolling facilities, and in response, the company has refused to accept labor for the partial strike processes and subsequent processes since the 3rd. Union-affiliated workers in the post-process stage have not accepted the refusal to accept labor and continue to come to work, performing tasks such as equipment maintenance.

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