Korean shipbuilding contract workers continue fight for better welfare

The 51-day strike came to an end. Daewoo Shipbuilding & Marine Engineering (DSME) and their contract workers managed to reach an agreement on July 22. However, it was a compromised victory. 21 DSME contract workers asked for a 30 percent increase in their wage but the agreement stated only a 4.5 percent increase instead, and this was a big retreat for the union. The union also asked for a guarantee of employment for all contract workers but DSME only agreed to “trying to maintain” their employment.

Through the strike, which started in June, the contract workers said they wanted to show the world “the poor working conditions they have to endure in the Korean shipbuilding industry.” For the past five years, shipbuilders, including the country’s third largest shipbuilder DSME, fired more than 75,000 contract workers due to financial difficulties. The workers also received minimum wage for their service even if they were veterans with 20 to 30 years of experience, according to the Korean Metal Workers’ Union.

There were reports that the labor union had succumbed to pressure from President Yoon Suk-yeol.  Four days before the agreement, Yoon had said the strike was an “illegal act” and hinted the authority could potentially intervene to arrest labor union members. 

DSME claimed to have lost about US$600 million because of the strike, from delayed deliveries of ships and tankers. With high inflation and the soaring cost of materials such as steel, some DSME shareholders suggested a restructuring to save cost.  Shortly after the strike, DSME also filed a lawsuit against the contract workers, asking for 47 billion won (US$33 million) compensation. 

The company multiplied an estimate of the total man-hour lost during the strike (approximately 750,000 hours according to the company’s calculation) with an average shipbuilding cost per hour, 63,113 won (US$45).

Kim Hyung-soo, regional head of the Korean Metal Workers’ Union of shipbuilding subcontractors, said DSME is trying to threaten the workers and sending the message that they will get punished if they participated in industrial action.  He added the workers “don’t have money to compensate for such a huge amount either.” 

DSME accused nine union leaders of business obstruction when the strike took place. The company argued the strike was “illegal” because it took place at one of the docks, where ships were being built.  The police requested for arrest warrants in July, but the Changwon District Court denied it, saying the strike was already over by then and the workers were willing to aid the investigation.

Lawyers for Democratic Society, an NGO, said the strike could not be seen as illegal because it was within a worker’s right to strike at their designated workplace. 

“In September 2020, the Supreme Court acknowledged the legitimacy of contract workers industrial action at their workplace, because (the employer) gets benefits from the contract workers’ labor and provides the workplace to collect such benefits,” said Democratic Society. “Even when the union’s industrial action partly infringes on the employer’s legal benefits, the employer should tolerate it.” 

Maritime Fairtrade sent a request to DSME asking if the company was going to withdraw the lawsuit against the workers but did not receive a reply.

The battle continues

Four subcontract companies of DSME closed during the strike, and only five out of 47 contract workers were allowed to return to their jobs, which was not what the company had agreed to with the union in July. 

To demand that all workers be given their jobs back and to protest against the “absurd” among of compensation asked, Kim and other workers from the labor union had been on a hunger strike in front of the National Assembly in Seoul and DSME’s Okpo shipyard, since August 18.

On September 7, DSME agreed to reinstate the remaining 42 workers. The union, however, vowed to continue to fight for better benefits for contract workers.

“Contract workers should maintain their efforts to fight for their rights even if the employment issue is settled,” Lee Kim Choon-taek, a senior official at the union of shipbuilding contractors, said at a cultural event held in front of the National Assembly on the same day. “We will try our best to make DSME withdraw the unfair request for damage compensation.” 

Photo credit: People’s Solidarity for Participatory Democracy, a grassroot organization. Contract workers hold press conference outside the National Assembly on September 5.

Sunny Um

Sunny Um

Sunny, our South Korea correspondent working out of Seoul, is a journalist with a passion for community journalism and an interest in economics and politics.

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