Hanwha Ocean will sign an agreement with the government and the shipbuilding industry to eliminate the gap between prime contractors and subcontractors. As the shipbuilder recently decided to provide equal performance bonuses to both prime contractor and subcontractor workers, related content is expected to be included in the agreement. Domestic shipbuilders are concerned about the possibility of the initiative expanding across the industry, given the government’s involvement in contractual relationships between employers and workers.
According to industry sources on Dec. 25, Hanwha Ocean plans to conclude a memorandum of understanding (MOU) for eliminating prime contractor-subcontractor pay gaps with the Partner Company Council and the Geoje-Tongyeong-Goseong Subcontractor Branch in early January next year. Prime Minister Kim Min-seok is scheduled to attend the agreement ceremony and deliver congratulatory remarks. While specific details of the agreement have not been disclosed, industry sources expect it to include content related to addressing the chronic pay gaps between prime contractors and subcontractors in shipbuilding sites, as this aligns with the current government’s policy direction. Particularly following the Ministry of Employment and Labor’s presidential briefing on Dec. 11, after which Hanwha Ocean announced its policy to provide equal performance bonuses to workers of prime contractors and subcontractors, the main content is expected to codify this and expand it across the industry.
Until now, domestic shipbuilders have provided different rates of performance bonuses to prime contractor employees and partner company employees. For example, Hanwha Ocean provided 150% of basic salary as performance bonuses to its employees this year, but provided only about 75% — half that amount — to partner company workers. However, Hanwha Ocean’s position is to uniformly apply and provide 150% of basic salary, the same rate as prime contractor workers, for performance bonuses to be paid around February next year.
Labor unions are also pressuring the shipbuilding industry in support of the government’s policy. On Dec. 24, the Geoje-Tongyeong-Goseong Subcontractor Branch stated, “We welcome Hanwha Ocean’s decision,” while also asserting, “Rather than just media play, they should sit down with the shipbuilding subcontractor branch for collective bargaining and faithfully negotiate payment targets and methods.” The subcontractor branch recently demanded collective bargaining with Hanwha Ocean based on six anti-discrimination measures, including equal performance bonus payments, but Hanwha Ocean has refused. In particular, labor unions are showing movements to expand equal performance bonus payments not only to Hanwha Ocean but across the entire domestic shipbuilding industry. The Korean Metal Workers’ Union issued a statement the same day demanding: comprehensive expansion of equal payment rates for prime contractor-subcontractor performance bonuses, elimination of discrimination based on tenure, nationality, and employment type, immediate and sincere negotiations with subcontractor unions, and cessation of all performance bonus and welfare discrimination against migrant workers. It emphasized that “We hope Hanwha Ocean’s decision does not end as a one-time declaration.”
As Hanwha Ocean is set to sign an agreement containing such content with the prime minister in attendance, the shipbuilding industry is clearly in a state of bewilderment. This stems from concerns that the government’s apparent involvement could exert considerable pressure on shipbuilding companies. Particularly with the full-scale launch of the MASGA (Make America’s Shipbuilding Great Again) project approaching, they point out that shipbuilders, who want to avoid friction with unions and deteriorating relationships with the government, will be forced to accept equal performance bonus payments. An industry official said, “Since Hanwha Ocean took the initiative first, other shipbuilders have no choice but to follow suit,” adding, “As the burden on small and medium-sized shipbuilders will inevitably increase, this should be left to the autonomy of employers and workers.”
Source: BusinessKorea
