With labor-management collective bargaining at POSCO, the steel business company under POSCO Group, breaking down, the POSCO labor union (POSCO union) has decided to begin a partial strike next month. If the union actually goes on a partial strike, it would break the 58-year tradition of no labor disputes that has continued since POSCO was founded in 1968.
This is the second time, following 2024, that the POSCO union has secured the right to strike. In 2024, after the union secured the right to strike, additional labor-management talks led to a settlement. But this year, the union's stance is seen as far more hard-line than in previous years, in part due to backlash against the management's decision to directly hire 7,000 cooperative partner employees.
The POSCO union secured the right to strike after the National Labor Relations Commission decided to halt mediation during the third mediation session related to collective bargaining on the 18th. To secure the right to strike, the commission must decide to halt mediation in collective bargaining, and the union's strike ballot must pass. The POSCO union, which last month approved a strike in a members' vote with a 92.2% approval rate, gained the right to strike with the commission's decision to halt mediation.
POSCO labor and management failed to narrow their differences on key issues, including base pay increases and payments of a lump sum (incentive), employee stock ownership, holiday bonuses, and long-service celebration payments. The union demanded a 7.1% increase in base pay, a lump sum equal to 600% of base pay, 50 shares in the employee stock ownership plan, a 200% holiday bonus, and payment of five years' worth of wage drift. Management, however, maintains that, considering this year's operating profit outlook, the union's demands are too difficult to bear. It said the demands cannot be accepted because meeting them all would require an expense of 1.4 trillion won.
POSCO said it "presented a more advanced proposal during the third mediation session of the National Labor Relations Commission, but we regret that the union chose to secure the right to strike before seeking common ground."
While leaving the door open for additional talks with management, the POSCO union plans to launch phased industrial action starting with a partial strike in September. The strike countermeasures committee is currently reviewing targets for a partial strike and has begun preparations. Given the nature of the steel industry, where once a blast furnace is shut down it takes considerable time and expense to restart, the union plans to carry out a partial strike targeting specific plants or departments, production lines, and units of work.
A POSCO union official said, "A partial strike must weigh several factors, including not only the impact on production but also members' ability to participate, safety issues, the company's capacity to respond, and work patterns by site," and added, "Industrial action is not aimed at stopping production; depending on the company's response, we will consider expanding the targets and intensity."
POSCO's tradition of no labor disputes is regarded as unusual in the industry. POSCO, founded in 1968 under a government initiative and grown into a key national industry, is seen as having a history that underpins this tradition. Pride in leading industrial modernization under the banner of "steelmaking to repay the nation" contributed to stable labor relations.
But in 2023, suspicions that former POSCO Group Chairman Choi Jeong-woo held a "luxury overseas board meeting" to secure another term fueled union distrust of management. In April 2025, police decided not to refer Choi and 16 inside and outside directors of POSCO Holdings to prosecutors, finding no charges in allegations that company funds were illegally spent on an overseas board meeting. After Choi stepped down in March 2024 and took a post as a senior adviser with the same annual salary as during his two-year chairmanship, controversy flared again. At the time, POSCO Group said, "Compensation was set at the same level as former senior advisers."
This year marks the second time, following 2024, that the POSCO union has secured the right to strike. Earlier, in 2023, the union held its first-ever strike ballot since the company's founding and resolved to take industrial action, raising the specter of a strike, but labor and management reached an agreement during the commission's mediation session, settling the talks. In 2024, the commission's decision to halt mediation and the passage of the strike ballot allowed the union to secure the right to strike for the first time. Afterward, through working-level negotiations, the two sides produced an agreement in December of that year, averting a strike.
In the steel industry, many say the POSCO union's stance is far more hard-line this year than in previous years. The main reason cited is the April decision by POSCO's Pohang and Gwangyang steelworks to directly hire cooperative partner employees. The union is protesting that, even though a deterioration in conditions for existing employees and safety issues are expected, management unilaterally announced the direct hires without prior consultation with the union, causing confusion.
POSCO labor and management are clashing over whether the direct-hire decision falls under the scope of a labor dispute as defined by the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers (Trade Union and Labor Relations Adjustment Act). The yellow envelope law, which took effect in March, added "managerial decisions that affect working conditions" to the scope of labor disputes, and the two sides are at odds over whether the decision to directly hire subcontract workers falls under this category.
The union argues that if direct hiring proceeds, it is expected to significantly affect working conditions, including organizational and staffing structures, job classifications, wages and benefits, and the duties and promotion structures of existing employees. For this reason, the POSCO union, aiming to ratchet up pressure on management, for the first time this year put industrial action to a members' vote and then began collective bargaining. In the 2024 strike ballot, the approval rate was around 72%, but this year it exceeded 92%.
Regarding the union's claim that the decision to directly hire subcontract workers falls within the scope of labor disputes under the yellow envelope law, a POSCO official said, "The company finds it difficult to offer a separate position."