It’s no victory for Hanjin union

The vehement labor dispute at Hanjin Heavy Industries that has paralyzed the company for over 10 months is finally over after the management accommodated most of the labor union’s demands, including the rehiring of 94 workers laid off almost a year ago. Union members unanimously approved a last-minute deal struck between management and labor at a general meeting yesterday.

As a result, labor activist Kim Jin-sook has come down from her 309-day sit-in protest atop a crane at Hanjin’s shipyard in Busan, thus putting an end to the long labor battle. It is fortunate that the conflict has been settled without any casualties or accidents.

We are worried, however, about the way the dispute was resolved because it has not only made the future of the company more precarious but it could also have a far-reaching and adverse effect on labor-management relations.

First of all, as a result of the company’s decision to re-employ all laid-off workers and compensate them for their losses during this period, Hanjin’s financial condition will no doubt deteriorate, particularly given that the company has failed to obtain any orders for ships - except for specialized ones - since September 2008.

That means the company will need to reinforce its ability to manufacture ships with a new workforce - even if it has no new orders from outside. The 700-strong labor union will also face a similar dilemma: It would be totally meaningless to send the workers back when the company is on the brink of collapse.

As the labor dispute came to an end thanks to the intervention of leftist civic groups and politicians, it will only fan a need for crisis management through external forces, which ignores the basic principle of settling disputes through involved parties within legal boundaries. That will obviously open the way for third parties to meddle in labor disputes down the road, not to speak of the worrisome possibility that labor unions could again resort to political solutions if they see the need.

Companies, too, will find it increasingly difficult to lay off employees, even in tough times. They will most likely be tempted to avoid that by increasing the number of part-time, irregular workers or moving their workplaces overseas.

The latest dispute settlement episode at Hanjin will eventually contribute to a reduction in the number of available jobs in the nation, while reducing the quality of the jobs. That’s why this is not a victory for the union at Hanjin.