After 77 days, HMM labor and management finally reached an agreement, salary increase and bonus
The HMM labor union strike, which has attracted strong market attention recently, has the latest results.
It is reported that on September 1, HMM's management and the union representing the crew and staff began the latest round of negotiations. After 18 hours of negotiation, an agreement was finally reached on the wage issue.
Employees’ salaries have increased by 7.9%, and employees will receive bonuses up to 6.5 times their monthly salary.
The core issue of this labor dispute is salary increase. Prior to this, the labor dispute between the two parties had lasted for 77 days.
The HMM union stated that from 2011 to 2019, the local shipping industry has been in recession and employee wages have also been frozen. This year, HMM achieved record operating income. The HMM union was dissatisfied with the only 2% increase in salary this year.
The labor union asked for a 25% salary increase, but the Korea Development Bank, the largest shareholder of HMM and a national policy lender, disagreed after swapping debt for equity.
The management and the labor union have conducted many consultations since June 18. Although the government's Central Labor Relations Committee conducted mediation, they all failed.
On August 22, the seamen's union voted to strike. 317 members collectively submitted a letter of resignation to the union and indicated their intention to join the MSC, which offered a salary equivalent to 2.5 times the current salary of HMM.
Then, on August 30, HMM's office staff also voted to strike.
In order to avoid what the company said could cause a loss of 580 million US dollars, HMM urged more negotiations. Eventually, the HMM union stated that it would postpone the resignation and strike plan, and agreed to hold a new round of negotiations with HMM management on September 1.
On September 2, HMM stated: “After about 18 hours of fruitful negotiations and discussions, the management and the trade union reached an amicable solution based on goodwill and mutual understanding. So far, there has been no interruption in route services and ship operations. Everything remains normal."
The HMM union stated that although it did not meet expectations, it decided not to go on strike considering the adverse effects on the economy. Union Chairman Jang Jong-Geum mentioned the wage freeze in the past 10 years and said: “Considering the inflation in those years, the salary increase will not have much impact. We are asking for a 25% salary increase, taking into account the experience we have experienced in the past ten years. Circumstances, this number should be seen as salary normalization, not a real salary increase."
It is understood that most of South Korea's import and export goods are transported by HMM ships. The Korean Shipowners’ Association stated in a statement on August 25: “If the HMM union really starts a strike, it will have a serious impact on South Korea’s import and export trade.”
HMM has also stated that if the union decides to carry out any form of strike, HMM and its THE alliance may suffer approximately US$580 million in operating losses. At the same time, the strike will also cause major global supply chain risks.
