SK Inno Reaches Wage Agreement... Introduces First 4-Shift System of 42 Hours Since Establishment

2023 Wage Negotiation Signing Ceremony
Linked to Previous Year's Consumer Price Inflation Rate

[Asia Economy Reporter Choi Seoyoon] SK Innovation's labor and management will change the work system for the first time in 61 years since its founding in 1962. They also maintained the principle of wage increases linked to the previous year's consumer price inflation rate for the seventh consecutive year and reached an agreement on the 2023 wage negotiations (wage talks).

On the 9th, SK Innovation's labor and management held the '2023 Wage Negotiation Signing Ceremony' at the SK Seorin Building in Jongno-gu, Seoul. Attendees included Kim Jun, Vice Chairman of SK Innovation; Cho Kyungmok, President of SK Energy; Na Kyungsoo, President of SK Geocentric; Park Sanggyu, President of SK Enmove; and Park Yulhee, Chairman of the SK Innovation Labor Union, along with members from both labor and management sides.

As a result of the wage negotiations, the work system for SK Innovation Ulsan CLX members was fully switched to a 4-team 2-shift system starting from the 8th. According to the 2021 collective agreement, SK Innovation labor and management formed a 'joint labor-management task force (TF)' to explore transitioning from the existing 4-team 3-shift system to a 4-team 2-shift system. Accordingly, from February 8 last year to February 7 this year, a one-year pilot of the 4-team 2-shift system was implemented, focusing on evaluating effects on work safety, member skill transfer, member happiness, and health.

Under the 4-team 2-shift system, SK Ulsan CLX members’ daily working hours increase from the previous 8 hours to 12 hours. However, they can work intensively for two days and then rest for two consecutive days, allowing sufficient rest time. Previously, under the 3-shift system, members worked 8 hours a day for three consecutive days followed by one day off. Due to the 24-hour continuous operation characteristic of the Ulsan CLX process, the three days involved a mix of day, night, and day-night shifts.

SK Innovation labor and management agreed that the pilot operation of the 2-shift system resulted in improved work engagement, health improvement through stabilization of biological rhythms, and securing work-life balance. Younger generation members who value 'work-life balance' (Wolabal) also preferred the 4-team 2-shift system.

The current wage negotiation, which includes the full adoption of the 4-team 2-shift system, reached a tentative agreement on January 30, just 11 days after negotiations began on January 19 last month. In a vote conducted by the union among all members on the 7th of this month, the agreement was finally approved with a 96.75% approval rate. The voter turnout was 96.09%, marking the highest turnout and approval rate ever recorded in SK Innovation wage and collective agreement votes.

SK Innovation labor and management finalized this year’s wage increase rate at 5.1%, following the 2017 labor-management agreement principle of linking wage increases to the previous year’s consumer price inflation rate announced by Statistics Korea. This principle was also upheld in 2020 and 2021 when the previous year’s consumer price inflation rates were 0.4% and 0.5%, respectively.

Park Yulhee, Chairman of the SK Innovation Labor Union, said, “The record-high approval rate is not simply a reflection of members’ satisfaction with the tentative agreement but also embodies trust and expectations for the future,” adding, “Through the formal adoption of the 4-team 2-shift system, we hope to improve members’ quality of life and build a stronger, mutually beneficial labor-management relationship.”

Kim Jun, Vice Chairman of SK Innovation, said, “I thank the labor union and negotiation committee for their bold decision to uphold the wage negotiation principle that has continued since 2017,” and added, “Just as labor and management have worked together to create the best labor-management culture, let us build an era of sustainable and advanced labor-management culture based on members’ trust and support.”