"Like Samsung, Us Too"... Performance Bonus Battle Spreads to Principal and Subcontractor Unions with Yellow Envelope Act

Although the crisis of a full-scale strike at Samsung Electronics between management and labor was dramatically defused, tension across the industrial sector is actually rising. This is because not only regular labor unions at major corporations, but also unions at subcontractors and partner companies, are expanding their demands for performance bonuses and bargaining rights directly to their client companies. In particular, with the enforcement of the Yellow Envelope Act (amendments to Articles 2 and 3 of the Trade Union Act) expanding the definition of who is considered the principal employer, there are growing concerns that this trend could rapidly spread across all industries.

According to industry and labor officials on May 21, there is growing concern that the case at Samsung Electronics is just the beginning. There is an increasing sense among labor unions at major corporations and subcontractors that they can now make direct demands on their client companies. In fact, at SK hynix's Cheongju plant, the labor union of an in-house logistics partner has announced plans for collective action, demanding direct bargaining with the principal employer and an end to discrimination in performance bonuses. It is being evaluated that cases are materializing in which subcontractor unions are demanding compensation linked to the principal company's performance and are seeking to negotiate directly.

Labor-management conflicts are spreading across all industries. The labor union at POSCO has applied for mediation with the Central Labor Relations Commission over the direct employment of partner company staff and the restructuring of the wage system, raising the prospect of the first strike in the company’s history. The labor union at Hyundai Mobis has declared a full-scale struggle, demanding that the company withdraw its plan to sell off the lamp business unit, and some affiliates have already begun partial strikes. In the shipbuilding sector, the labor union at HD Hyundai Heavy Industries has, for the first time this year, demanded that 30% of operating profit be paid as performance bonuses, while in-house subcontractor unions are also insisting on performance compensation at the same level as the principal company.

The industrial sector points to the enforcement of the Yellow Envelope Act as the background for this trend. While the purpose of the law's revision is to strengthen bargaining rights for subcontracted workers and address the dual structure of the labor market, there are interpretations at worksites that its scope is expanding even into management decision-making. This is due to the revised bill's phrase, "management decisions that affect working conditions." As a result, not only the distribution of performance bonuses, but also issues such as business restructuring, factory automation, and the introduction of artificial intelligence are increasingly becoming subjects of labor disputes.

In fact, the labor union at Samsung Biologics has proposed a collective bargaining agreement that includes the introduction of new technologies and process improvements as topics for joint labor-management consultation. Meanwhile, labor unions at Hyundai Motor and HD Hyundai Heavy Industries have included employment security measures related to the introduction of artificial intelligence in their demands. The business community is concerned that, as restrictions on damage claims are tightened, the burden of illegal strikes will be reduced, potentially leading to even more frequent labor-management conflicts.

The government is also closely monitoring the situation. President Lee Jae-myung recently emphasized in a Cabinet meeting, "The three fundamental labor rights exist to protect workers, who are the socially disadvantaged, and are not a tool for the exclusive benefit of specific groups."

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