SEOUL, June 25 (AJP) -The labor union of South Korea's largest automaker, Hyundai Motor Co., secured the legal right to strike on Thursday after labor authorities suspended mediation in the company's wage negotiations, raising another labor risk at a major industrial workplace following Samsung Electronics.
According to Hyundai Motor and its union, the National Labor Relations Commission decided to suspend mediation in the dispute, concluding that the gap between labor and management remained too wide to reach an agreement through conciliation.
The ruling came a day after union members voted in favor of strike action in a ballot. With both the strike authorization vote and the mediation suspension completed, the union is now legally permitted to stage a strike under South Korean labor law.
The union plans to launch a central strike committee on June 30 to discuss possible industrial action and its negotiating strategy.
Labor and management have held 11 rounds of talks this year. The union declared negotiations broken down on June 12 and began strike preparations, saying the company had failed to present a wage proposal.
The union is demanding a monthly base wage increase of 149,600 won ($97), excluding seniority-based pay raises, a performance bonus equivalent to 30 percent of the company's net profit from last year, an increase in bonuses from 750 percent to 800 percent of monthly pay, and an extension of the retirement age.
With the union now holding legal strike rights, industry observers expect Hyundai Motor to present its first wage proposal in the near future in an effort to avoid a work stoppage.
Last year, the company and union reached a wage agreement after workers staged three partial strikes.
"The company does not have an official message regarding the union's acquisition of the right to strike. We will make every effort to reach an amicable agreement with the union," an employee from Hyundai Motor's media relations team told AJP by phone.
Meanwhile, shares of Hyundai Motor closed at 504,000 won ($326.8) on the KOSPI, down 0.98 percent on the day.
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