Prime Minister Kim Min-seok, middle, poses at Hanwha Ocean’s Seoul workplace, Jan. 5, with contributors in a ceremony to mark the shipbuilder’s efforts to foster mutual advantages with subcontracted shipyard staff. Joint Press Corps
Potential conflicts with subcontracted staff have emerged as a serious danger for Korean shipbuilders, whilst the businesses are anticipated to proceed posting strong earnings this yr.
The sense of disaster stems from rising political strain on shipbuilders to deal with subcontracted staff on equal footing with their instantly employed staff. The forthcoming enforcement of the revised Commerce Union and Labor Relations Adjustment Act, generally generally known as the “yellow envelope legislation,” can also be weighing on the trade, because it permits subcontracted staff to barter instantly with the principal employer.
After President Lee Jae Myung recommended Hanwha Ocean final month for its resolution to get rid of discrimination in opposition to subcontracted staff in bonus funds, different shipbuilders have confronted rising calls to observe go well with.
Hanwha Ocean stated the ratio of subcontracted staff’ performance-based bonuses to their base pay will now match that of the corporate’s common staff. In 2024, subcontracted staff obtained bonuses equal to 75 p.c of their annual base wage, whereas instantly employed workers obtained bonuses amounting to 150 p.c.
Prime Minister Kim Min-seok praised Hanwha Ocean’s resolution once more on Jan. 5 when he visited the corporate’s Seoul workplace.
“The federal government will proceed offering administrative and monetary help in order that the shipbuilding trade’s efforts to foster mutual progress with subcontracted staff can unfold to different sectors,” Kim stated.
Each the ruling and opposition events have urged different shipbuilders to emulate Hanwha Ocean, apparently hoping to win subcontracted staff’ votes within the June native elections.
Byun Gwang-yong, a member of the Democratic Social gathering of Korea’s (DPK) and mayor of Geoje — dwelling to Hanwha Ocean and Samsung Heavy Industries — known as discrimination in opposition to subcontracted shipyard staff probably the most urgent challenge to resolve when social gathering leaders visited the island on Jan. 9.
He repeated the sentiment when he joined Rep. Kim Tae-seon of the DPK and Ulsan Dong District Mayor Kim Jong-hoon of the minor opposition Jinbo Social gathering at a Dec. 22, 2025, press convention on the Nationwide Meeting.
The Jinbo Social gathering additionally held a separate press convention Monday, urging HD Hyundai Heavy Industries (HHI) to supply equal performance-based bonuses to subcontracted staff.
“Contemplating HD HHI’s document working revenue, it ought to pretty compensate subcontracted staff for his or her efficiency,” the social gathering stated. “Systematic discrimination in opposition to subcontracted staff has led to an outflow of labor and a downturn in regional economies.”
Members of the Ulsan Metropolitan Council from the primary opposition Folks Energy Social gathering additionally broke from their social gathering’s conventional pro-business stance by becoming a member of requires HD HHI to supply equal performance-based bonuses.
“Honest compensation isn’t a value however an funding that strengthens long-term industrial competitiveness,” they stated at a press convention on Dec. 15 final yr.
Buoyed by political help, unions representing subcontracted shipyard staff have strengthened their protests in opposition to shipbuilders.
“HD HHI, HD Hyundai Samho and Samsung Heavy Industries are nonetheless staying silent,” the unions stated in an announcement. “The efficiency of each shipyard employee deserves equal respect.”
The Jinbo Social gathering’s Ulsan department members maintain a press convention on the Ulsan Metropolitan Council, Dec. 15, 2025, urging HD Hyundai Heavy Industries and Hyundai Motor to deal with their subcontracted staff equally to their direct-hire staff by way of bonus funds. Courtesy of Ulsan Metropolitan Council
Shipbuilders in dilemma
Business insiders emphasised that subcontracted staff are employed by subcontractors, which have the fitting to find out performance-based bonuses.
“Principally, shipbuilders have shared a portion of their income with subcontractors to allow them to independently pay bonuses to their staff,” an trade official stated on situation of anonymity. “Every subcontractor’s base wage differs, so it’s tough to equalize the ratio of bonuses to base pay.”
Amid the controversy, HD HHI postponed its 2025 performance-based bonus fee to February, deviating from the conference of paying bonuses each December.
Though the corporate’s union formally requested equal therapy for subcontracted staff, some instantly employed staff voiced complaints, nervous that their very own bonuses may shrink.
“I don’t perceive why the corporate ought to pay efficiency bonuses to subcontracted staff,” an HD HHI employee wrote on the union’s on-line discussion board. “They need to ask their very own employers.”
Samsung Heavy Industries, in the meantime, determined to freeze its 2025 performance-based bonuses at 50 p.c of base month-to-month wage, the identical as in 2024, regardless of the corporate reporting its highest earnings in 11 years.
The choice triggered sturdy backlash from staff, who warned they’d put down their instruments until the corporate reversed its plan.
New labor legislation’s influence
Business officers count on the enforcement of the yellow envelope legislation in March to additional burden Korean shipbuilders.
“As soon as the legislation takes impact, every firm will face rising strain from unionized subcontracted staff to barter instantly,” stated an government at a serious conglomerate.
In line with a current survey by the Korea Enterprises Federation, 87 out of 100 corporations with annual income over 500 billion gained ($340 million) predicted the legislation would negatively have an effect on labor-management relations.
Particularly, 75 p.c expressed concern that unionized subcontracted staff may search direct bargaining and make extreme calls for.
