Sangmin Kim, Head of Labor and Employment at Bae, Kim & Lee: "Assess Substantial Control Over External Partners Starting With Bargaining Issues"

Replacement Labor for Subcontracted Workers
Collective Bargaining Demands Regarding M&A
Guidelines Needed from Ministry of Employment and Labor on "Bargaining Unit"

Bae, Kim & Lee LLC has been developing corporate response strategies since launching its Yellow Envelope Law Task Force (TF) in July, closely monitoring the legislative process and the Ministry of Employment and Labor's stance. In particular, drawing on its direct experience representing cases such as CJ Logistics, Hyundai Steel, and Hanwha Ocean-which have become indicators for determining actual control-the firm provides tailored services at every stage, from preliminary reviews of actual control to responding to bargaining demands, participating in bargaining procedures, and handling disputes.

Sangmin Kim, Head of Labor and Employment Group at Bae, Kim & Lee LLC (Attorney)

Sangmin Kim, who leads the TF as Head of the Labor and Employment Group at Bae, Kim & Lee LLC (age 46, Judicial Research and Training Institute class 37), was named "Best Lawyer" among all attorneys in last year's Law Times "2024 Law Firm Consumer Report" and was also selected as "Best Lawyer" in the field of labor law this year.

We asked Attorney Kim about the most contentious issues expected after the Yellow Envelope Law comes into effect and how companies should respond.

The following is a Q&A with Attorney Kim.

-Has there been a noticeable increase in corporate inquiries or requests for legal advice before and after the passage of the Yellow Envelope Law in the National Assembly?

▲There has been a significant increase in inquiries and requests for legal advice. While it is difficult to disclose the exact number of cases, work related to the Yellow Envelope Law now accounts for about 50% of our overall workload.

-What are companies most curious about?

▲The most frequent questions are whether actual control can be recognized in cases involving certain subcontractors, and whether specific matters can be considered business management decisions. As a response strategy, we are considering factors that could reduce the recognition of actual control.

-What types of legal disputes do you anticipate will become most problematic once the amended law takes effect?

▲Fundamentally, there will be frequent disputes over whether actual control exists. More specifically, key issues will include whether, in the event of industrial action at Subcontractor A, work can be assigned to Subcontractor B despite the ban on replacement labor, and whether unions can demand collective bargaining in cases of corporate mergers, splits, or other M&A activities.

-What should companies prioritize in preparing for the amended law? What advice would you give for risk management?

▲First, companies should review their current contractual relationships with external vendors to assess whether actual control could be recognized. If so, they should examine which matters could give rise to a duty to bargain.

-What specific items do you believe the government must clarify through guidelines or directives before the amended law comes into force?

▲Even if the government issues guidelines or directives, terms like "actual control" or "business management decision" are likely to remain sources of dispute and will probably be clarified through case law. On the other hand, when bargaining with subcontractor unions, the bargaining unit is an area where the Ministry of Employment and Labor's guidelines would be helpful, since collective bargaining practices at worksites have traditionally followed such guidelines.

-Once the amended law is in effect, if a subcontractor of a subcontractor-or even a lower-tier subcontractor-demands collective bargaining, is the primary contractor obligated to comply in all cases?

▲Since the condition of actual control is required, the primary contractor is not unconditionally obligated to comply. Moreover, actual control may vary depending on the specific matter at hand, so ultimately, the decision must be made after reviewing the contractual relationships and the subjects of bargaining.

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