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POSCO to Sue Union for 2 Billion Won

Posted July. 27, 2006 03:01,   


POSCO, which had its headquarters occupied for nine days by unionized construction workers, will file a suit against the union, seeking compensation of 2-2.5 billion won.

The company is demanding payment for direct damage to items such as the building and furniture.

POSCO initially planned to demand compensation for not only direct damages but also indirect damages such as sales loss. The strike paralyzed operations in 30 of POSCO’s factories. In this case, the amount of compensation would have been some 130 billion won— five billion won for each of the 27 days.

However, there were opinions that this would be too harsh on the workers, and the company decided to ask for compensation for damage done to its headquarters.

POSCO estimates compensation costs for direct damages to amount to approximately two billion won. Damaged items number hundreds including computers, fax machines, carpets, lightings, elevators, flowerpots, walls and rooftops, and other personal items.

Considering that 2,500 union members participated in the sit-in strike, one person would be responsible for one million won in average.

However, the company has not yet decided on whether it will file a suit against the union, the 58 arrested leaders, or everyone who participated in the strike.

The court does not recognize compensation for indirect damages resulting from union’s illegal activities. In 2004, the Ulsan District Court ordered Hyosung’s union to pay 7.2 billion won in compensation. This is, by far, the largest amount that the court has ordered a union to pay.

In 2001, Hyosung went through a 150-day long strike. The management filed a suit against union leaders seeking 40 billion won in compensation for direct and indirect loss. But the court did not include indirect damages such as reduced production in the settlement.

The court decided that the union must compensate for the collective action of the union and that the union leaders should be held responsible for it.

The court has yet to hold all members of the union responsible for paying compensation. But recently, Seoul High Court ordered individual union members and executives in a bus company to pay for damages resulting from an illegal strike. They occupied parking lots and punctured tires of the bus.

The court also holds the management responsible to some degree for having failed to prevent the strikes from taking place.

Kwon-Hyo Lee boriam@donga.com wiseweb@donga.com