KG Mobility (formerly Ssangyong Motor) has decided not to receive 4 billion won that the labor union must compensate the company for damages caused by an illegal strike in 2009.
According to the Korean Confederation of Trade Unions (KCTU) and KG Mobility on the 1st, KG Mobility held a temporary board meeting on 29th and passed an agenda item not to enforce the damage-compensation claim against the Metal Workers' Union. This was based on an agreement among the "labor-labor-management" parties — the Metal Workers' Union Ssangyong Motor chapter, the KG Mobility Labor Union, and KG Mobility.
On the same day, it delivered a letter of commitment to the National Metal Workers' Union under the Korean Confederation of Trade Unions (KCTU) stating that "KG Mobility will not enforce the damage-compensation claim as of Sept. 30, 2025, in connection with the Supreme Court damages case."
◇ Ssangyong Motor union strikes using steel pipes and slingshots in protest of restructuring layoffs proposed as a court receivership self-rescue measure
Earlier, the Metal Workers' Union Ssangyong Motor chapter went on strike for 77 days from May to August 2009 in opposition to the management's layoff plan. Ssangyong Motor, whose parent Daewoo Group had gone bankrupt, was acquired by Shanghai Automotive Industry Corporation in 2004, but Shanghai Automotive gave up management control in Jan. 2009 and applied for court receivership. One of the self-rescue plans prepared by management was to lay off 2,646 people, or 37% of the entire workforce, and the union went on strike in protest.
During the strike, the Ssangyong Motor union illegally occupied the plant and committed acts of violence. They blocked nonunion workers from entering the plant, and when management personnel tried to enter, the union drove them out using steel-pipe slingshots and forklifts. They fired large bolts at management with a giant slingshot, threw Molotov cocktails, and even attempted arson at the plant.
Ssangyong Motor filed a 15 billion won damages suit against the union and its members, claiming that it suffered losses due to production disruptions caused by the union's plant occupation sit-in. In Dec. 2015, management withdrew the suit against individual members but maintained the damages suit against the union.
In the first and second trials, the court ruled that the Metal Workers' Union must compensate management 3.31 billion won, reflecting operating profit that could have been earned from car sales during the strike and fixed expenditure, among other factors. The Supreme Court remanded the case with instructions to reduce the compensation, and on remand the amount was cut to 2.09 billion won. The Supreme Court finalized this ruling in May. Including delayed interest, the amount the union must compensate comes to about 4 billion won.
KG Mobility acquired Ssangyong Motor in 2022. After the Supreme Court finalized its ruling, management and the union discussed the damages lawsuit. Management accepted the non-enforcement view of not receiving the compensation.
◇ After a first-trial ruling ordered 4.7 billion won in compensation to management and police, a "47,000 won" yellow envelope was delivered
The Ssangyong Motor strike and management's damages suit set the stage for the "Yellow Envelope Act" (amended Labor Union Act). In Dec. 2013, after a first-trial ruling ordered the Ssangyong Motor union to pay 4.7 billion won to management and the police, a citizen delivered 47,000 won in donations in a yellow envelope.
This led to the "Yellow Envelope Campaign" to help Ssangyong Motor workers. The campaign drew on the idea that pay envelopes used to be yellow. In three fundraising drives run by the Beautiful Foundation, about 47,000 people participated and more than 1.46 billion won was raised.
The civic group "Sonjapgo" (Let's end damages suits and provisional seizures! Hand in hand!), established during the campaign, led the legislative drive for the "Yellow Envelope Act." In Apr. 2015, 34 lawmakers from the New Politics Alliance for Democracy (now the Democratic Party of Korea) introduced a bill to amend the Labor Union Act to expand the scope of "legal strikes" exempt from damages liability and to bar management from claiming damages against individual workers. The bill passed the National Assembly plenary session in 8th, 10 years later. The Yellow Envelope Act will take effect on Mar. 10 next year.
In a statement released that day, the Korean Confederation of Trade Unions (KCTU) said, "This agreement is an 'indicator that the era of retaliatory damages must end now,'" and argued, "Corporations that are maintaining damages claims, including Hyundai Motor, Hyundai Steel, Hanwha Ocean, and Korea Optical High Tech, must now make a magnanimous decision."