National Labor Relations Commission recommends extended mediation; both sides accept

Posco plans to invest 16.7 trillion won in future growth over the three years through 2028 to accelerate its business portfolio transformation. Shown is an exterior view of Posco Center. [Posco Holdings]
Posco plans to invest 16.7 trillion won in future growth over the three years through 2028 to accelerate its business portfolio transformation. Shown is an exterior view of Posco Center. [Posco Holdings]

Posco and its union have accepted a recommendation from the National Labor Relations Commission to extend the mediation period and will enter intensive negotiations, with the outcome set to determine whether the steelmaker faces its first strike since its founding.

Posco and the Posco labor union affiliated with the Federation of Korean Trade Unions' metal workers' federation said Wednesday that at a second mediation session held at the commission on the 2026 collective bargaining talks, both sides agreed to extend the mediation period in line with the commission's recommendation.

Under the agreement, labor and management will continue intensive negotiations until a final mediation session scheduled for 2 p.m. on Aug. 18.

Posco now stands at a crossroads over a potential first strike since its founding in 1968. If the two sides fail to reach an agreement and the final mediation session ends with a ruling to halt mediation, the union will gain the legal right to strike. The union had already secured a strike mandate, with 92.2 percent of members voting in favor of industrial action in a ballot held Aug. 8 and Aug. 9.

The union has been demanding a 7.1 percent base pay increase, a 600 percent incentive bonus, 50 shares of employee stock ownership and a 200 percent holiday bonus. It has also called for the establishment of a long-term compensation structure beyond the current short-term, bonus-focused pay system.

Management has said that meeting the union's demands would cost 1.4 trillion won ($980 million) and that accepting them would be difficult given challenging business conditions, including low-cost competition from China and elevated energy prices, exchange rates and interest rates.

Instead, management proposed a 1.2 percent base pay increase and a 2 million won performance bonus contingent on meeting this year's operating profit target. It also offered expanded individual performance awards, more active special promotions, improved housing loan criteria and additional holiday fuel vouchers — but the two sides were unable to reach an agreement.


eyre@heraldcorp.com