Hyundai Motor, Korea’s largest automaker, said that it will change the status of some 3,000 subcontractor laborers working for its Ulsan plant to regular employees.

The company said in a statement that it will recruit 3,000 of its 8,000 in-house subcontractors as regular employees by 2016 as a means to “follow and honor” rulings by Seoul courts and government agencies.

It will begin by hiring 1,000, and then increase its employment to 3,000 over the next four years.

Labor-management relations have long been a source of tension between the auto giant and its subcontractors, with the latter constantly suing the former for unfair treatment and demanding a change of employment status after working for more than two years at the carmaker’s plant.

The company had often been criticized for not living up to its reputation as a global automaker by reportedly making its subcontractors at Hyundai manufacturing lines work at lower costs for the same hours as full-time regular employees with fewer benefits.

Hyundai Motor resisted their demands and the lower court’s ruling in favor of laborers that said they should be recognized as full-time workers by the automaker. The Supreme Court, early this year, ruled in favor of a Hyundai Motor subcontract worker, who filed a suit in 2005. The court said the worker should be promoted to a regular employee as he worked under the direction of the auto manufacturer for more than two years. The highest court’s decision dealt a blow to companies that have been exploiting the subcontracting system to lower manufacturing and labor costs.

The auto company said that it has reached its decision to regularize 3,000 in-house subcontractors to mitigate confusion that has erupted over the years of court battles.

It will now be socially responsible, and will extend its benefits to its subcontractors by “sharply” increasing their wages to narrow the gap with workers hired directly by the company.

By Park Hyong-ki (hkp@heradcorp.com)