Four Economic Organizations Including KEC Propose Supplementary Legislation on the Commercial Act, Fair Trade Act, and Labor Union Act to the National Assembly

[Asia Economy Reporter Kiho Sung] The Korea Employers Federation (KEF), together with the Korea Federation of SMEs, the Korea Association of Mid-sized Enterprises, and the Korea Listed Companies Association, jointly representing four major economic organizations, announced on the 3rd that they have proposed supplementary legislation on the Commercial Act, the Fair Trade Act, and the Labor Union Act to the National Assembly.

Regarding the background of the supplementary legislation proposal, the four economic organizations explained, "Since all the recently passed economic-related laws pose significant challenges, we earnestly request that at least a few minimum provisions of the amended Commercial Act, Fair Trade Act, and Labor Union Act be reflected as supplementary legislation in this extraordinary session of the National Assembly, so that our companies can somewhat overcome immediate difficulties."

First, concerning the amendment to the Commercial Act, the four organizations pointed out, "The restriction on voting rights of major shareholders (application of the 3% rule) makes it impossible to prevent foreign funds and others from forming alliances to enter the board of directors, which could seriously undermine the core management structure of companies." They also noted, "For listed companies, minority shareholders can exercise their rights without meeting the six-month holding period, making it easier for speculative funds to recommend director candidates and gain entry to the board."

Regarding the amendment to the Fair Trade Act, they stated, "The introduction of indirect shareholding regulations (regulating other affiliates holding more than 50% shares) hinders strategies to enhance competitiveness and damages cooperative relationships among affiliates." They added, "In particular, for holding companies, the increase in mandatory shareholding ratios for subsidiaries means that newly established or incorporated subsidiaries (unlisted companies) automatically fall under internal transaction regulations, increasing the burden."

As for the amendment to the Labor Union Act, they emphasized, "In a situation where confrontational and conflictual labor-management relations persist, strengthening only the union's right to organize will intensify the power imbalance toward unions and further destabilize labor-management relations." They continued, "Although the issue of employers paying salaries to union full-time officers is intended to be left to labor-management autonomy, excessive demands for expansion of union full-time officers and union activity support will lead to increased disputes and conflicts. Furthermore, when forming the committee for working hours exemption under the Economic, Social and Labor Council, the government and public interest members cannot be expected to act with neutrality and objectivity, and their labor-biased stance raises concerns about undermining labor-management autonomy."

The main contents of the supplementary legislation requests submitted by the four economic organizations to the National Assembly's Judiciary Committee, Political Affairs Committee, and Environment and Labor Committee are as follows. Regarding the amendment to the Commercial Act, they proposed ▲a one-year grace period for the implementation of separate appointment of audit committee members and ▲applying the 'special provisions for listed companies' rather than general provisions when exercising minority shareholder rights for listed companies. For the amendment to the Fair Trade Act, they requested ▲exclusion of companies with indirect shareholdings among related parties from internal transaction regulations. Regarding the Labor Union Act, they requested ▲institutional improvements to restore balance of power between labor and management ▲limiting workplace access of union members not affiliated with the company to union offices only in essential cases ▲amendment to compose the Working Hours Exemption Review Committee solely of management and labor representatives ▲and the introduction of penalty provisions for excessive demands beyond working hours exemption limits and related industrial actions.

This content was produced with the assistance of AI translation services.