Hanwha Ocean Reaches Tentative Wage Agreement

Panoramic view of Hanwha Ocean Geoje Workplace. (Photo courtesy of Hanwha Ocean) Labor and management at Hanwha Ocean have prepared a tentative agreement after long-running negotiations for the wage and collective agreement. The contents include a basic pay increase of 140,000 won (about $106) and a lump-sum payment of 8,500,000 won (about $6,422), along with improvements to the performance pay system and the rehiring of retirees. According to Hanwha Ocean on Oct. 27, labor and management derived a tentative wage and collective agreement during the 30th negotiation held on the afternoon of this day. The agreement included a basic pay increase of 140,000 won and the payment of a lump sum of 8,500,000 won, which includes a settlement lump sum and a win-win encouragement bonus. They also decided to establish a system to provide welfare points equivalent to 1,000,000 won annually. Along with this, they gathered consensus on a partial increase in congratulatory and condolence expenses, the expansion of the pre-school child support fund from 100,000 won to 300,000 won per month, and the recruitment of new employees. They also found meeting points regarding the performance pay system and the issue of rehiring retirees, which had emerged as major contentions during the negotiation process. To improve the performance pay system, labor and management decided to form and operate a task force until the end of the year. The policy is to prepare payment standards so that objective and predictable indicators can be reflected in the calculation of financial and strategic performance pay. Regarding the rehiring of retirees, they decided to rehire union members who have reached retirement age as production contract workers for one year. Afterward, whether to extend this for an additional year will be reviewed according to separate deliberation standards. This agreement was reached amid differing views with the management, as the union had been demanding a basic pay increase of 149,600 won, a 900% payment of bonuses, and an extension of the retirement age. The management previously proposed a basic pay increase of 138,689 won and a lump sum of 7,500,000 won, but expanded the scope of the basic pay increase and the size of the lump sum during the final negotiation process. Hanwha Ocean maintains the position that this tentative agreement focused not only on one-time compensation but also on the continuous improvement of wage and welfare levels. In particular, the company explained that it presented a competitive basic pay increase amount at the highest level in the industry and included an encouragement bonus to promote artificial intelligence transformation (AX) innovation in the lump-sum compensation. The explanation also noted that the welfare point system equivalent to 1,000,000 won annually was prepared so that executives and employees can enjoy benefits in the long term. An official from Hanwha Ocean said, “Both labor and management made efforts to prepare a sustainable tomorrow and a foundation that members can enjoy in the long term.” The tentative agreement will be put to a vote for or against at the union members’ general assembly on the morning of Oct. 29, after going through deliberation by the branch delegates and a briefing session for union members on Oct. 28. If approved in the vote, the wage and collective agreement will be finally settled. If the wage and collective agreement is settled, Hanwha Ocean Branch Head Kim Yoo-chul, who is currently staging a high-altitude sit-in at the facilities of the Geoje Workplace, is also expected to conclude the sit-in and come down to the ground.