Time to negotiate fair solution over dismissal requirements
With the Supreme Court's ruling on Ssangyong Motor's 2009 layoffs on Thursday, the workers' wish to return to the automaker through litigation has evaporated. After the ruling, plaintiffs and labor activists reacted furiously. One of them called the decision ''cruel and irresponsible,'' arguing that ''the ruling leaning toward employers crushed our hope.''
The top court overturned a Seoul High Court ruling and sent the case back to the court for a retrial with an opinion that the carmaker's decision to lay off 153 workers as part of restructuring efforts was legitimate. Reaching its decision, the nation's highest court acknowledged that the company urgently needed to shed staff in the aftermath of the 2008 global financial crisis.
The court said management made enough efforts to try and avoid the layoffs before it become inevitable. Judges also agreed that Ssangyong did not intentionally exaggerate its financial distress so it could fire the workers.
Ssangyong was placed under court receivership in February 2009, after its main investor, Shanghai Automotive, pulled out the year before. Two months later, the automaker unveiled a restructuring plan that included laying off more than 2,600 employees or 37 percent of its workforce.
The company's labor union began a strike, which lasted 77 days, amid violent clashes between workers and law enforcement authorities at the company's plant in Pyeongtaek, 70 kilometers south of Seoul.
In the end, 1,900 workers voluntarily retired and 454 took unpaid leave, while 164 were dismissed. The automaker, bought by India's Mahindra & Mahindra in 2010, escaped the court receivership and called back all employees who had been on unpaid leave.
The layoffs ― which came when the social safety net was still weak ― cast a cloud over Korea, where such action is regarded as "social murder.'' Sadly, since the layoffs, 25 former employees and their family members have died, with some committing suicide.
The Supreme Court's ruling, which the business community welcomed, raised the need to toughen requirements before management can lay off workers. But it is not a simple matter.
It appears that everything will be fine if labor rules are toughened and their vagueness removed. But paradoxically, this will certainly cause companies to avoid hiring and make it all but impossible for businesses in trouble to restructure. Ssangyong Motor is a case in point. Had it not been able to restructure in 2009, the reinstatement of the 454 workers would have been impossible. And it is doubtful if the carmaker would have survived.
So it is necessary to be careful in revising the relevant labor laws. There should be reasonable efforts to negotiate a fair solution between ensuring employers' managerial activity and protecting employees.
Ssangyong Motor needs to be more proactive in taking back as many of its former employees as it can, regardless of the latest ruling. The dismissed workers also need to seek dialogue with the company rather than continue to struggle.
With the Supreme Court's ruling on Ssangyong Motor's 2009 layoffs on Thursday, the workers' wish to return to the automaker through litigation has evaporated. After the ruling, plaintiffs and labor activists reacted furiously. One of them called the decision ''cruel and irresponsible,'' arguing that ''the ruling leaning toward employers crushed our hope.''
The top court overturned a Seoul High Court ruling and sent the case back to the court for a retrial with an opinion that the carmaker's decision to lay off 153 workers as part of restructuring efforts was legitimate. Reaching its decision, the nation's highest court acknowledged that the company urgently needed to shed staff in the aftermath of the 2008 global financial crisis.
The court said management made enough efforts to try and avoid the layoffs before it become inevitable. Judges also agreed that Ssangyong did not intentionally exaggerate its financial distress so it could fire the workers.
Ssangyong was placed under court receivership in February 2009, after its main investor, Shanghai Automotive, pulled out the year before. Two months later, the automaker unveiled a restructuring plan that included laying off more than 2,600 employees or 37 percent of its workforce.
The company's labor union began a strike, which lasted 77 days, amid violent clashes between workers and law enforcement authorities at the company's plant in Pyeongtaek, 70 kilometers south of Seoul.
In the end, 1,900 workers voluntarily retired and 454 took unpaid leave, while 164 were dismissed. The automaker, bought by India's Mahindra & Mahindra in 2010, escaped the court receivership and called back all employees who had been on unpaid leave.
The layoffs ― which came when the social safety net was still weak ― cast a cloud over Korea, where such action is regarded as "social murder.'' Sadly, since the layoffs, 25 former employees and their family members have died, with some committing suicide.
The Supreme Court's ruling, which the business community welcomed, raised the need to toughen requirements before management can lay off workers. But it is not a simple matter.
It appears that everything will be fine if labor rules are toughened and their vagueness removed. But paradoxically, this will certainly cause companies to avoid hiring and make it all but impossible for businesses in trouble to restructure. Ssangyong Motor is a case in point. Had it not been able to restructure in 2009, the reinstatement of the 454 workers would have been impossible. And it is doubtful if the carmaker would have survived.
So it is necessary to be careful in revising the relevant labor laws. There should be reasonable efforts to negotiate a fair solution between ensuring employers' managerial activity and protecting employees.
Ssangyong Motor needs to be more proactive in taking back as many of its former employees as it can, regardless of the latest ruling. The dismissed workers also need to seek dialogue with the company rather than continue to struggle.
