Striking South Korea shipyard workers resume talks, but lawsuits threat remains an obstacle

About 100 workers from subcontractors have occupied the main dock at DSME's shipyard, demanding a 30 per cent pay increase. PHOTO: REUTERS

SEOUL (REUTERS) - Talks between shipyard contract workers and Daewoo Shipbuilding & Marine Engineering (DSME) resumed on Friday (July 22) to resolve a strike that has hurt South Korea's third-largest shipbuilder and led to delays in delivery of vessels.

About 100 workers from subcontractors have, since late last month, occupied the main dock at DSME's shipyard in the southern coast city of Geoje, demanding a 30 per cent pay increase.

Police were on standby at the yard and ready to move in, Yonhap news agency reported on Friday.

Union officials representing the strikers have told Reuters they were willing to end the strike and accept an offer of 4.5 per cent wage increase if DSME and its subcontracting companies drop their plans to seek damages from the strike through legal action.

The South Korean government has said the strike is illegal, in violation of union laws.

South Korea's Vice-Finance Minister Bang Ki-sun raised hopes of a reconciliation, saying in a statement early on Friday that the two sides have narrowed their differences significantly.

"Talks must reach an agreement today and we hope the illegal occupation is wrapped up," the minister said.

In response to the statement, Mr Jang Seok-won, director of public relations at the Korea Metal Workers' Union, which represents the strikers, told Reuters that the major sticking point of legal action still persists, adding that both DSME and its subcontracting firms haven't withdrawn their plans to seek damages.

DSME has not filed lawsuits against the strikers but plans to do so in the future and does not plan to back down on this, Yonhap news agency reported on Thursday, citing a company official.

The company has said it expects a loss of 32 billion won (S$33.9 million) a day due to the strike and the dispute had cost it more than US$400 million (S$556.40 million) as of mid-July.

The construction of eight vessels at five docks at the shipyard has been affected, with delivery dates pushed back by two to five weeks as of Wednesday, a DSME spokesperson said.

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