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POSCO Announces Roadmap to Directly Hire 7,000 Contract Workers, Restructuring Primary-Subcontractor Relations

This article was automatically translated by AI. There may be errors compared to the original Korean article.  Read original in Korean →

[비즈한국] POSCO announced on the 8th a roadmap to directly hire approximately 7,000 employees from partner companies who support operations at its Pohang and Gwangyang steelworks. POSCO explained that this measure is intended to resolve structural issues in its primary-subcontractor relationship and to strengthen its safety systems.

A worker works on producing molten iron at the No. 2 blast furnace of POSCO's Pohang Steelworks in Jecheol-dong, Nam-gu, Pohang, North Gyeongsang Province. Photo = Yonhap News
A worker works on producing molten iron at the No. 2 blast furnace of POSCO's Pohang Steelworks in Jecheol-dong, Nam-gu, Pohang, North Gyeongsang Province. Photo = Yonhap News

According to POSCO, those eligible for direct hiring are on-site employees of partner companies performing support tasks directly related to the steelmaking process. POSCO plans to proceed with the hiring process for employees at both steelworks who wish to join the company. The company stated that due to the nature of steelmaking, where large-scale facilities operate 24 hours a day and there are significant variations in job duties, a structure where direct employees and partner company employees work together has persisted.

POSCO presented this measure as part of its innovation in safety management aimed at eradicating the 'outsourcing of risks.' It also explained that this is a case of implementing the 'fundamental improvement of subcontracting issues, including multi-level subcontracting structures' announced in August of last year. A POSCO official stated, "Through the direct hiring of partner company employees, we will innovate the safety system at industrial sites and strengthen future steel competitiveness based on a win-win labor-management model."

This decision is also intertwined with worker status confirmation lawsuits that have been ongoing since 2011. POSCO's position is that it intends to settle the related lawsuits that have dragged on for nearly 15 years through this measure. The first lawsuit filed by POSCO's in-house subcontracted workers resulted in a Supreme Court victory for the workers in July 2022, becoming the first case in the steel industry to recognize illegal dispatch, and subsequent lawsuits filed since then have also resulted in victories for the workers.

POSCO's direct hiring policy is not unrelated to the changing labor-management environment following the revised Trade Union Act, the so-called 'Yellow Envelope Act,' which took effect on March 10. With the implementation of the revised law, if a primary contractor is deemed to be able to substantially and specifically control or determine the working conditions of subcontractor unions, it is obligated to negotiate. The impact on the field has spread rapidly, with 407 subcontractor unions demanding negotiations from 221 primary contractors on the very first day of the law's enforcement.

Amid this situation, the Gyeongbuk Regional Labor Relations Commission is scheduled to hold a second hearing and issue a ruling on the case of separation of bargaining units filed by the Korean Confederation of Trade Unions (KCTU) POSCO Subcontractor Chapter on the 8th. This case is drawing attention as the first instance to gauge the employer status and bargaining structure of private primary contractors, excluding the public sector. The ruling, which was scheduled for the 3rd, was postponed once due to sharp disagreements between the parties.

POSCO's direct hiring roadmap faces two tasks simultaneously: restructuring the primary-subcontractor relationship and resetting labor-management relations, going beyond a simple change in workforce management. The significance of this measure is expected to become more concrete depending on the actual scope and speed of the hiring transition, the treatment system after the transition, and the ruling of the Labor Relations Commission.

This article was automatically translated by AI. There may be errors compared to the original Korean article.
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