Court invalidates job inheritance

Since a court invalidated a Hyundai Motor agreement to hire a family member of a worker who dies in an industrial accident, other companies are reconsidering their own labor rules.

On Thursday, the Ulsan District Court made the decision about the so-called “job inheritance” of union members after a family member of a Hyundai Motor employee who died of lung cancer in 2011 filed a lawsuit to force Hyundai to hire one of their children in accordance with the terms reached in the collective bargaining agreement in 2009.

Article 96 of Hyundai Motor’s 2009 agreement states that the company must hire one family member of a union member who dies at work or retires due to a serious industrial injury within six months after an application is filed if there are no grounds for disqualification.

Hyundai has been refusing to hire the deceased employee’s family member, insisting that the worker retired in 2009 and wasn’t a union member anymore when he died in 2011.

The court said that Hyundai needs to compensate the family because the worker’s death was caused by an industrial injury but doesn’t have an obligation to hire the family member as the clause isn’t valid.

The court first said that since the collective bargaining agreement is also a group contract, it applies general theory private law and can be nullified because it is contrary to social norms.

The court also pointed out that business management and recruitment can’t be addressed in collective bargaining as such a move would intrude on the intrinsic right of employers to choose personnel.

The union has faced public criticism over its job inheritance rights as unemployment of young people has become a serious social problem. Such a recruitment advantage was also seen as contrary to President Park Geun-hye’s plan, which urges job creation and sharing under the agenda of “economic democratization.”

The court also mentioned the social atmosphere in its ruling, saying that the clause is pushing many job seekers to disappointment and is against social norms.

“In times like this when there not enough jobs for young people, detailed standards are suggested due to the social order regarding job opportunities,” the court said in a ruling. “Distributing stable job opportunities under their own agreement doesn’t fit with generally accepted social policy.”

Industry insiders said that the court’s ruing would have an impact in this year’s collective bargaining of Korean companies in general as the negotiation season is approaching.

Since the court ruled against hiring family members of employees who died from industrial accidents, other clauses that give recruitment advantages to family members of employees without injuries are also likely to be declared invalid, according to lawyers.

Act 23 in Hyundai’s bargaining agreement states that the company must give an advantage to the children of retired employees and those who have worked at the company for over 25 years during the hiring process as long as they are qualified.

Other companies in the manufacturing industry, such as Kia Motors, GM Korea and Hyundai Heavy Industries, have similar clauses in their collective bargaining agreements.

According to 2011 data from civic group Center for Good Corporations, 51 companies among the nation’s top 200 companies had clauses in their collective bargaining agreements that give advantages to employees’ family members when recruiting.

Although it is too early to determine what these companies will do about these clauses when negotiating with the unions, some people said that the recent court ruling would not make a big impact as most companies want to keep good relationships with the unions.

“The Ulsan court ruling is kind of a disappointment because it blocks a way of helping family members who lost the head of the family,” an official from Hyundai’s union said. “We hope the decision will not represent all cases regarding recruitment of employees’ family members as each situation differs.”

By Joo Kyung-don [kjoo@joongang.co.kr]