Posco, Hyundai Steel management and unions begin wage negotiations under 'Yellow Envelope' law

Steel giants Posco and Hyundai Steel have begun annual wage negotiations with their unions under a new labor law that has handed workers significantly more bargaining power.

Posco's union sent management a list of demands, headlined by a 7.1 percent base salary increase on May 20, according to industry sources on Monday. Formal negotiations are expected to begin in early June.

Hyundai Steel's labor and management also held their first meeting on May 8 and have since completed four rounds of talks, with the union demanding a 150 percent increase in bonuses compared to last year. Management has not yet offered a proposal, and the union has warned that it must do so at the next session, scheduled for Tuesday.

The talks at both companies are unfolding under the shadow of Korea's “Yellow Envelope” law that took effect in March. The law's original aim was to widen the legal definition of “employer” under the Trade Union and Labor Relations Adjustment Act. 

As a result, subcontractor unions can now demand to bargain directly with the parent company rather than just their immediate employer — and both steelmakers are already contesting that in court.

In April, the Incheon Regional Labor Relations Commission ruled that bargaining units among Hyundai Steel's subcontractor unions should be separated, allowing each subcontractor union to bargain individually and directly with the parent company. Hyundai Steel filed for the National Labor Relations Commission (NLRC) to review this ruling. 

“We filed because we wanted to clarify the standards and procedures, given that the revised labor law is still in its early stages of implementation,” a Hyundai Steel spokesperson said.

Likewise, Posco received the same ruling from the North Gyeongsang Provincial Labor Relations Commission and filed for a review.

Posco is also facing a separate dispute, as workers are contesting the company's decision to hire around 7,000 workers currently employed through subcontractors at its Pohang and Gwangyang steelworks and have filed for mediation with the NLRC. Although the commission's intervention blocked the union from securing the right to strike over the issue, the union says it intends to raise the direct-hire question during the main wage talks. It has also formed a strike preparedness committee.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY JEONG HYE-JEONG [[email protected]]