Tension is rising inside POSCO as both the direct employer (regular workers) and subcontractor unions have successively warned of strikes. The POSCO regular workers' union recently voted on industrial action with a high approval rate of 92%, resolving to take industrial action and escalating its campaign. Subcontractor unions are also directly demanding talks with POSCO, the direct employer, following the implementation of the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers.
◇ Direct employer union resolves to take industrial action with 92% approval
According to the steel industry on the 13th, POSCO management and the regular workers' union, the Federation of Korean Metalworkers' Trade Unions under the Federation of Korean Trade Unions (FKTU Metalworkers' Federation) POSCO Labor Union (POSCO union), are set to hold their sixth round of talks on the 14th with both labor and management participating. The two sides met five times from the opening session on June 12 through July 8 but failed to find common ground.
The POSCO union began this year's collective bargaining by shifting to a strike countermeasures committee system. Although in 2023 and 2024 the union also switched to a strike countermeasures committee during stalled talks, this is the first time it has formed such a committee before talks even began.
A POSCO union official said, "Unlike last year, there is significant pent-up anger on the shop floor this year over inadequate rewards for performance, safety issues, and management's unilateral decision to directly hire subcontracted workers," adding, "Forming a strike countermeasures system before talks means the union's direction this year is focused on industrial action."
In May, the POSCO union sent management a 13-item demand that included a 7.1% increase in base pay, a lump-sum payment equal to 600% of base pay, an increase in holiday bonuses, employee stock ownership plan grants, and the formation of a special self-safety committee. At the talks on the 8th, management presented its first review proposal on the union's demands, but the union says it was merely an insincere response.
What the POSCO union takes most issue with is that management is limiting employee compensation, citing difficult business conditions due to a slump in the steel market, while significantly increasing dividends to the holding company (POSCO Holdings) and group-level investments. The union believes the holding company views POSCO, the operating company, only as a cash cow, with no compensation in return. POSCO was split off as an operating company when POSCO Group transitioned to a holding company structure in Mar. 2022.
Dividends POSCO paid to the holding company POSCO Holdings increased from about 320 billion won in 2023 to 888 billion won in 2024 and came to 527.4 billion won in 2025. The POSCO union points out that although operating profit plunged from 2.0826 trillion won in 2023 to 1.4731 trillion won in 2024 and 1.7804 trillion won in 2025, the dividend payout ratio to POSCO Holdings (dividends as a share of net profit) grew from 41% in 2023 to 61% in 2025. The POSCO union is demanding that management disclose the decision criteria for dividends sent to POSCO Holdings.
In response, a POSCO official said, "Because we paid relatively lower dividends to the holding company early after the spin-off to secure working capital, it may look as if dividends later increased, but we executed them according to the prescribed dividend procedures."
The POSCO union is also pushing back against the POSCO Group chairman Chang In-hwa's plan to reorganize the group's business portfolio released on the 2nd. POSCO Group decided to pursue growth on three pillars: steel, secondary batteries, and energy. Accordingly, it will invest a total of 16.7 trillion won over three years through 2028, including 7.6 trillion won in steel (industrial resources), 4.1 trillion won in secondary batteries (strategic resources), and 3.7 trillion won in energy (energy resources).
An analyst at a securities firm said, "Looking at POSCO Group's business reorganization investment plan, it effectively means investing cash flow generated from steel into lithium and energy businesses."
A POSCO union official said, "Until now, POSCO has consistently played the role of a cash cow at the group level, but employees receive no compensation for that while the company only calls for expanding investments."
The POSCO union is leaving open the possibility of going on strike, breaking the 58-year no-strike tradition that has continued since the company's founding in 1968. In 2023 and 2024, the POSCO union secured the right to strike through the Central Labor Relations Commission's suspension of mediation and a vote by union members to take industrial action. At the time, the strike crisis escalated, but labor and management reached a last-minute agreement and averted a strike.
While the usual process to secure the right to strike begins with the Central Labor Relations Commission suspending mediation, the POSCO union first held a strike vote on the 8th–9th and resolved to take industrial action with 92% approval.
In response, POSCO management said at the talks on the 8th, "We regret that a strike vote was held before our proposal was presented while we were reviewing the union's demands."
If future talks break down, the union plans to apply for collective bargaining mediation procedures with the Central Labor Relations Commission. If the commission decides to suspend mediation, the union secures the right to strike and can stage a walkout.
◇ Subcontractor unions pile on direct bargaining demands with POSCO
Pressure is also mounting from subcontractor unions demanding direct talks. This follows the implementation in March of the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers, which gives subcontractor unions the right to demand bargaining with the direct employer whose employer status is recognized.
The POSCO In-house Subcontractors Gwangyang Chapter of the Korean Confederation of Trade Unions (KCTU) Metal Workers' Union is demanding that POSCO agree to direct employer bargaining. They argue POSCO is refusing to bargain, citing procedures to unify the bargaining channel. Earlier, the North Gyeongsang Regional Labor Relations Commission and the Central Labor Relations Commission found that POSCO should separate the bargaining units of the KCTU Metalworkers' Union, the Plant Construction Workers' Union, and the FKTU Metalworkers' Federation subcontractor unions.
POSCO said, "Since the announcement on the 8th confirming the labor union requesting talks, we have been engaging in mutual consultations on administrative procedures to ensure smooth bargaining."
The KCTU POSCO In-house Subcontractors Gwangyang Chapter is also opposing POSCO's plan released in April to directly hire 7,000 workers at partner companies at the Pohang and Gwangyang steelworks. They argue POSCO is hiring them into job categories different from existing regular workers and discriminating in pay. The subcontractor union is demanding an end to unilateral direct hiring and that the process proceed through bargaining.
The direct hiring decision is also a point of contention for the POSCO direct employer union under the FKTU. They say management announced direct hiring of subcontractors without any communication with the union, raising concerns that existing union members could suffer in areas such as benefits and safety.
A POSCO direct employer union official said, "The direct hiring decision itself is a managerial choice, so there is no justification to block it, but the problem is that the company proceeded unilaterally without communication," adding, "Protecting union members' rights and working conditions is key."
The KCTU Construction Industry Federation's National Plant Construction Workers' Union, a subcontractor union in plant construction, has filed a complaint with the Seoul Regional Office of Employment and Labor alleging unfair labor practices by POSCO, as well as S-Oil and Korea Zinc, which are refusing to bargain. The plant union is made up of workers who build steelworks and power plants and handle maintenance and repairs of facilities.
The plant union claimed that POSCO, the direct employer, is delaying talks by citing procedures to unify the bargaining channel. The plant union decided to join the KCTU general strike on the 15th.