Hyundai proposes peak pay, two tiers

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Hyundai proposes peak pay, two tiers

Hyundai Motor said yesterday it has proposed 32 revisions to its collective bargaining agreement with its labor union, including implementation of a peak salary and two-tier wage system.

The nation’s largest automaker and its union began their annual wage bargaining late last month and have completed seven rounds of negotiations.

Hyundai first asked the union to agree to a two-tier wage system that would mean lower salaries for new employees so that it can reduce labor costs.

Hyundai also wants to adopt a peak salary,?which would extend the retirement age for senior employees in return for gradually reducing their salaries. It is the second time the company has asked the union to adopt such a system.

Management apparently wants to keep current retirement age of 60 under a peak salary system, while the union wants to increase the retirement age to 61.

Under Hyundai’s peak salary proposal, employees aged between 55 to 57 will receive the same base pay as when they were 54. Those aged 58 will get 90 percent of the base pay and 59-year-old workers 80 percent.

Currently, a management-union committee reviews and approves plans to build or expand overseas that would directly affect the jobs of union members. Hyundai said it wants to change “review and decide” to “discuss” to allow it to make quicker decisions.

The union, meanwhile, wants a say in all overseas plant construction, even if there is no local impact on workers. ?

“Asking for revision of the collective bargaining agreement is not only a right for the labor union, but also a right and duty of management as well,” said a spokesman from Hyundai. “What we are aiming is to have sustainable competitiveness for the company.”

The union, however, says its members would be worse off under the proposed revisions.

The union has made more than 60 proposals to management, including a?130,498 won ($114) monthly base pay increase and a 10 million won technical education allowance for employees’ children who don’t go to college.

BY JOO kyung-don []
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