Agreement at Daewoo signed after a two-month strike

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An agreement was signed on 22 October 1999, bringing to an end a lengthy strike by workers at the new Daewoo refrigerator factory in Álava, Spain, seeking a substantial improvement in their working conditions. However, the agreement did not receive the support of all the trade unions represented on the Daewoo workers' committee.

In late 1997 the Korea n multinational Daewoo opened a refrigerator assembly plant on an industrial estate in Álava in the Basque Country. The selection and recruitment of workers began soon after, following very clear criteria: young persons with a vocational training level of FP2 and without previous work experience. This created a workforce of quite unusual characteristics: for most of the 160 workers, the Daewoo job was their first employment contract; their average age was 21; and they were all recruited on work-experience contracts with net wages of approximately ESP 60,000 a month - 60% of the minimum wage for the metalworking sector. Since the plant opened, the workers have been demanding wage increases and permanent contracts, but an agreement was reached in October 1999 only after two years of conflicts and a strike of over two months.

Background

The holding of trade union elections of workers' representatives in March 1998 was the first sign that the situation could change at the Álava plant. Participation by workers was high, despite the fact that the workers had little experience of industrial relations and trade union organisation. The resulting workers' committee was composed of three members of the UGT union, three members of the Basque nationalist union ELA-STV and one member of LAB, another Basque union. Despite its varied composition, however, there was a high degree of unity in the committee on three basic demands: higher wages; conversion of temporary contracts into permanent ones; and better working hours. The unions felt that the wage conditions and recruitment system were totally unfair and unjustified. The working hours were also a very controversial topic, not only because they were at the maximum level for the metalworking sector, but also because a split-shift system allegedly meant that the workers had to eat in the company canteen and to pay almost half their salary for it. It was therefore proposed to reduce working hours and move to a continuous shift.

The unions' demands initially met with a positive response from the management, which agreed to raise wages to the minimum for the metalworking sector. At the end of 1998, after a one-day strike, the company also agreed to give all the workers permanent contracts when they had been with the firm for 18 months.

The conflict seemed to be on the way to being solved, but problems soon reappeared. After a change in the human resources management, the company began not to renew some temporary contracts, including the contracts of three members of the workers' committee. This decision was highly unpopular among the workforce and mobilisations began. The workers managed to get one of the members of the committee reinstated through an agreement with the company, another had to take his case to the labour court before he was reinstated, and the third preferred to leave the company.

Indefinite strike

After this conflict, the workers' committee hardened its position, demanding: the same wages as the electrical appliances sector, which meant increasing the gross salary from ESP 1.8 million to ESP 2.5 million per year; the immediate conversion of temporary contracts into permanent ones; and a working week of 35 hours in continuous shifts. The company's refusal to negotiate led to the start of an indefinite strike that was to last over two months, from 19 July to 22 October 1999, not counting the August holidays. During this time, the workers only went to work on the last day before the August holidays and on the first day after, when they decided to continue the strike until an agreement was reached with the company.

The poor working conditions at Daewoo and the unusual duration of the strike had a strong impact on public opinion. The strike received the support and solidarity of the trade union federations, left-wing political parties and many associations. However, neither the government nor the employers' organisations made any effort to deal with a conflict that went almost unnoticed in the national media. Meanwhile, the unions had to set up special "resistance funds" so that the workforce of Daewoo could maintain such a long strike. Even so, of the 160 workers that began the strike, 20 decided to leave the company and look for other jobs.

A controversial agreement

Negotiations between the company and the workers' committee led to a preliminary agreement supported by UGT and LAB, but not by ELA-STV. Despite the lack of unanimity, this agreement was finally supported by a mass meeting of the workers and signed on 22 October 1999. Its basic points are:

• readmission of the 160 workers who began the strike and conversion of their temporary contracts into permanent ones in December 1999;

• a wage rise equal to the increase in the retail prices index plus 4% over the next three years, plus a non-consolidated special payment of ESP 30,000 in the first year, ESP 40,000 in the second year and ESP 60,000 in the third year; and

• a reduction in working hours of 12 hours per year and a switch to continuous shifts.

UGT and LAB feel that this agreement is fairly positive: all the demands have not been achieved, but there is a great improvement in working conditions and it is the first step towards a change in the company's industrial relations model. ELA-STV does not deny the improvements, but believes that the fatigue caused by such a long strike played an important role in the final phase of the negotiations. In its opinion, non-consolidated wage increases should not have been accepted and the reduction in working hours should have been greater.

Commentary

The case of Daewoo may not be very representative of industrial relations in Spain, due to the extremely low level of the working conditions and the company's firm refusal to negotiate, which made it necessary for the employees to maintain such a long permanent strike in order to reach minimally decent working conditions. However, there are many more "Daewoos" in Spain which are not so evident. They are found at the periphery of the labour market, among temporary workers, the "false self-employed", and subcontracted workers. These workers' representation is fairly diluted because they are not part of the nucleus of the workforce, and sometimes not even part of the workforce as such. At Daewoo, the homogeneity of the working conditions allowed the workers to organise themselves and make demands, but when the conditions are clearly unequal it is far more difficult (María Caprile, CIREM Foundation).