As the POSCO labor union, the regular workers' union at POSCO, declared the breakdown of collective bargaining and the possibility of the company's first strike since its founding is being discussed, a key point of contention between labor and management is the long-service commemorative award. POSCO labor and management are at odds over paying gold as a long-service award.
Currently, POSCO gives gold in the form of a commemorative plaque only to employees with more than 30 years of continuous service and to retirees. But in this year's collective bargaining, the union is demanding that gold be awarded every five years starting in the 10th year of service.
Management reportedly refused the union's demand, citing the case of financial burdens increasing at POSCO Group affiliate POSCO FUTURE M.
According to POSCO labor and management on the 24th, POSCO currently provides long-service gifts in eight tiers based on years of service. By tier, cash (congratulatory money), leave, and gold are awarded on a differentiated basis.
POSCO pays only congratulatory money in the fifth year of service and pays congratulatory money and leave in the 10th, 15th, 20th, and 25th years. For 30-year employees, it provides congratulatory money and leave plus 10 don of gold, and for 35-year employees, it provides congratulatory money (travel vouchers) and 1 don of gold. For those retiring at the mandatory retirement age, it provides congratulatory money and leave, and 2 don of gold.
In this year's collective bargaining, the union demanded that, separate from congratulatory money and leave, gold be awarded every five years starting in the 10th year of service, and that the weight of gold given to those with 30 or more years of service be increased. It called for giving 5 don of gold in the 10th year, 7 don in the 15th year, 10 don in the 20th year, and 15 don in the 25th year.
It also demanded raising the 30th year from 10 to 15 don and the 35th year from 1 don to 20 don. Separately, it requested newly adding leave for those with 5 and 35 years of service.
However, POSCO management did not accept the union's demands, citing increased volatility in gold prices. It reportedly also explained that gold is taxed at the market price at the time of receipt, so taxes can vary widely depending on the payment timing.
Under tax law, gold paid in kind is taxed as earned income based on the market price on the date of payment. The domestic purchase price for 1 don (3.75 g) of gold rose from 580,000 won (excluding value-added taxes) on July 1 last year to around 800,000 won on July 1 this year.
Instead, POSCO management proposed raising cash payments by 100,000–200,000 won in consideration of the "mid-career" cohort in the 10–20 year range and their roles and responsibilities. It would raise the 10th year by 100,000 won from 400,000 won to 500,000 won, and the 15th and 20th years by 200,000 won each to 700,000 won and 900,000 won, respectively.
POSCO management proposed keeping the current 15 don of gold for the 30th year of service, considering its symbolism, but abolishing gold payments for the 35th year and for retirees and replacing them with cash.
In drafting this long-service commemorative award demand, the POSCO union looked to the example of group affiliate POSCO FUTURE M. POSCO FUTURE M is known to pay gold every five years starting in the 10th year of service.
A POSCO union official said, "Because the steel industry, as a capital-intensive industry, values technical proficiency, awards for long service carry great meaning," and noted, "Our position is that it should be improved at least to the level of the group affiliate."
Regarding the union's demand to pay gold at the level of POSCO FUTURE M, POSCO management reportedly said at the bargaining table that "because we have not been able to shed past legacy (existing practices), current financial burdens are increasing," and indicated it could not accept the demand.
After this remark became known, some POSCO FUTURE M employees reportedly reacted by questioning why another company was being dragged in. POSCO management was also said to have mentioned cases at other groups such as Hyundai Motor and Samsung.
The POSCO union the previous day declared the breakdown of collective bargaining and said it would apply for mediation by the National Labor Relations Commission. Because the POSCO union has already voted to stage industrial action, if the commission decides to suspend mediation after opening the mediation process, it will secure the right to strike and can walk out. If the union actually goes on strike, it would break POSCO's no-strike tradition that has continued since its founding.