The recent push by Kia’s labor union to extend the retirement age to 64 and demand various allowances has caused a stir. They argue that the company should pay a congratulatory allowance of $850 when an employee turns 60 and increase the congratulatory allowance for the birth of an employee’s child up to $1,520, which has sparked controversy.
According to the automotive industry, the Kia labor union finalized a 2024 collective bargaining agreement amendment request containing these contents on the 3rd and delivered it to the company. The proposal includes an expansion of the congratulatory allowance payment targets and amounts and emphasizes the need to increase the congratulatory allowance for the birth of employees’ children.
Last year, Kia Motors increased the congratulatory allowance paid at the birth of a child from $850 to a maximum of $4,250 after negotiations with the union. Especially in the case of having a third child or more, they agreed to pay a congratulatory allowance of $4,250. However, the union was not satisfied with this and argued that they should pay $4,250 for the first child, $8,500 for the second child, and $14,500 for the third child.
Moreover, the union’s collective agreement revision proposal includes a clause requiring the company to pay a congratulatory allowance of $850 when an employee turns 60, which has been at the center of controversy. Apart from this plan to expand the congratulatory allowance, they are also demanding a retirement age extension to 64, a 4.5-day work week, a 6.36% basic wage increase, and a performance bonus payment of 30% of operating profit. In the industry, they are dubbed the aristocratic union.
In addition, the proposal includes demands to extend the number of vacation days for a child’s wedding from 4 to 7 days, to provide 2 days of paid leave when an employee or their spouse turns 60 and when a child enlists in the military, and a training center that employees can use as a rest area. Requests for the construction of dormitories in the metropolitan area for children were also included.
The industry criticizes the union’s demands as exceeding social norms. While unions can demand fair wage increases and improved working conditions to represent workers’ rights, these demands can decrease a company’s competitiveness due to excessive compensation demands, especially when they come from union members of large corporations boasting million-dollar salaries.
It seems that the demands of the union, excluding the extension of the retirement age, are exceeding the conventional wisdom and causing tension between the labor and management sides. Accordingly, Kia’s labor and management announced that they will start wage and collective agreement negotiations starting with the traditional meeting held this month.
However, as Kia’s global sales performance until May this year decreased by 0.9% to 1,286,111 units compared to the same period last year, it is unlikely that they can accept all of the union’s demands. There are opinions that the Kia labor union, which receives a million-dollar salary, is demanding excessive benefits and hindering Kia’s growth, along with exacerbating the social deprivation of small and medium enterprise workers.
In response, the Kia labor union conducted a survey among its members and revealed that 50.2% of respondents answered that the priority issue to be achieved during the renewal of the collective agreement is the extension of the retirement age, and 59.5% of respondents said that the appropriate amount for a performance bonus payment request is $29,000 or more. They justified the demand to increase the congratulatory allowance for children as a measure against low birth rates.
Recently, with the global economic downturn deepening, labor-management conflict is considered one of the important factors that greatly affect the entire South Korean economy and the overall labor market, not just the problem of a single company. This labor-management conflict problem is not only in Kia but also in major domestic companies such as Hyundai Motor and Samsung Electronics. It is also predicted that domestic companies will have to devote a lot of time to solve this.
Meanwhile, Samsung Electronics has also been in the spotlight as the National Samsung Electronics Labor Union declared a strike for the first time since its establishment. They escalated their fight by going on strike through collective annual leave on June 7 as negotiations with the company were not going well. They even began a 24-hour sit-in in front of the Seocho office building on a promotional truck bus.
It is understood in the industry that there is a heated debate over whether the strike by Samsung Electronics’ union had to occur in the current situation where Samsung Electronics is in a semiconductor crisis.
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