Government to Specify Three Criteria for Separating Subcontractor Bargaining Units... Pre-announcement of Yellow Envelope Act Enforcement Decree Amendment

Draft Amendment to the Enforcement Decree of the Trade Union Act
Clarifying Criteria for Bargaining Unit Separation Decisions
Primary Separation Between Principal and Subcontractor Unions
Further Separation of Subcontractor Unions Possible Based on Characteristics
Minimizing Labor-Management Disputes Over Employer Status
Assessing the Principal Employer's 'Substantive Control'

The government has decided to clarify the criteria for separating bargaining units by providing three specific examples during the implementation of the Yellow Envelope Act (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) to ensure that subcontractor unions secure substantive bargaining rights. While maintaining the framework of unified bargaining channels, the government aims to guarantee these rights, recognizing that there can be significant differences in duties and interests among subcontractor unions. Regarding the determination of employer status, which is a prerequisite for bargaining, the Labor Relations Commission will decide whether the principal employer holds substantive control.

Kim Younghoon, Minister of Employment and Labor. Photo by Yonhap News Agency

The Ministry of Employment and Labor announced on the 24th that it will pre-announce a partial amendment to the Enforcement Decree of the Trade Union Act, aimed at facilitating substantive bargaining between principal employers and subcontractor unions, from November 25 to January 5 of next year, in line with the Yellow Envelope Act, which will take effect in March next year. Kim Younghoon, Minister of Employment and Labor, stated, "We have prepared this amendment to guarantee the substantive bargaining rights of subcontractor unions while also establishing a stable framework for bargaining between principal employers and subcontractor unions."

Diverse Separation Systems According to Subcontracting Characteristics

The Enforcement Decree stipulates that during bargaining between principal employers and subcontractor unions, the government will fully support bargaining in accordance with the unified will of the parties, provided both principal employers and subcontractor unions agree to autonomous or joint bargaining, thereby respecting autonomous negotiations between labor and management. However, if no agreement is reached, the unified bargaining channel procedure will proceed, and the Labor Relations Commission will maximize the protection of substantive bargaining rights for subcontractor unions by separating bargaining units as necessary.

In the process of separating bargaining units, since principal unions and subcontractor unions may differ in the scope of bargaining rights, employer responsibilities, working conditions, and interests, bargaining units will, in principle, be separated. When separating bargaining units among subcontractor unions, any agreements reached between the principal employer and subcontractor unions will be respected and reflected as much as possible. However, if labor and management disagree, the bargaining unit separation system will be implemented.

The methods include: ▲ separation by individual subcontractor (when duties, interests, or union characteristics differ significantly), ▲ separation by similar subcontractors (when duties or other characteristics are similar), and ▲ separation as a single group of all subcontractor unions (when all subcontractor duties or characteristics are similar). Other separation methods may also be considered. If a subcontractor union does not apply for bargaining unit separation, the government will guide it to bargain with the principal employer in solidarity with the principal union.

If bargaining units are separated, the unified bargaining channel procedure will be conducted for each separated unit to determine the representative union for each. The government will also support the formation of autonomous joint bargaining teams and delegation or coalition-based solidarity during the unified bargaining channel process for subcontractor unions, ensuring that minority unions are not excluded.

Determining Employer Status Based on Principal Employer's 'Substantive Control'

The Enforcement Decree also includes field guidance measures to promote bargaining between principal employers and subcontractor unions. During the process of separating bargaining units and unifying bargaining channels, if the Labor Relations Commission recognizes the principal employer's substantive control over certain working conditions, the principal employer will be required to participate in the bargaining process as the employer. The Ministry of Employment and Labor explains that this approach can minimize labor-management disputes over employer status prior to bargaining.

Subsequently, if the principal employer and subcontractor unions autonomously negotiate issues outside the scope where employer status has been recognized, their bargaining autonomy will be maximally guaranteed. If, during the unified bargaining channel process, a principal employer whose employer status has been recognized refuses to participate in bargaining without just cause, local employment and labor offices will provide guidance and pursue legal action for unfair labor practices.

If the principal employer and subcontractor unions disagree on the scope of employer status before or after bargaining, the "Employer Status Determination Support Committee" (tentative name) will assist in determining the obligation to bargain. A Ministry of Employment and Labor official stated, "We are considering whether to establish the Employer Status Determination Support Committee within the Labor Relations Commission or within the government." The official added, "As the workload of the Labor Relations Commission increases, we are continuously discussing increasing the number of investigators and expanding infrastructure."

Minister Kim stated, "Within this year, we will establish government guidelines on employer status determination and the scope of labor disputes to resolve uncertainty in the field and enable labor and management to prepare ahead of the law's implementation. We will do our utmost to create a new paradigm of dialogue and compromise by gathering wisdom from both labor and management, so that this becomes an opportunity for coexistence and genuine growth."

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