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The National Labor Relations Commission, a South Korean government organisation that handles labour disputes, cleared the way for strike action at the country’s top car maker, the Hyundai Motor union said in a statement.
The commission recognised large differences in positions between the company’s management and union, Yonhap News Agency said on Monday. A commission spokesperson was not available for comment.
The union said it would gather on Wednesday to decide what the next move would be. Members had voted on Friday to walk out unless the company accepted demands for wage increases and an extension of the retirement age.
Union officials have said they would continue talks with management regardless.
If the strike goes forward, it would be the first such action in five years related to wage negotiations at Hyundai Motor and could disrupt delivery of some popular vehicles. Hyundai has been struggling to ramp up production because of prolonged component shortages.
The strike could cause up to 1 trillion won ($755.37 million) in operating losses, and put pressure on domestic sales as there is little backlog to sell, KB Securities said in a research note on Monday.
($1 = 1,323.8600 won)
