FKI says "Implementation of the Trade Union Act Amendment Will Deal a Major Blow to Corporate Investment"

Concerns are being raised that the proposed amendment to the Labor Union Act is not only highly likely to be unconstitutional but also will spread strike absolutism, causing confusion in industrial sites.

On the 24th, the Federation of Korean Industries (hereinafter FKI) pointed out in a report titled "Problems of the Labor Union Act Amendment (Yellow Envelope Act)" that the bill could lead to ▲violation of the principle of legality in criminal law under the Constitution, ▲the hollowing out (rendering ineffective) of the subcontracting system, ▲protection of perpetrators, ▲infringement of management rights, and ▲the spread of strike absolutism.

First, the FKI criticized the amendment for expanding the concept of "employer" beyond the party to the labor contract to include those who can "substantially and concretely" control and determine the working conditions of workers, calling it an ambiguous provision that could cause confusion in industrial sites.

They argued that if the concept of employer is vaguely defined, it could lead to exhausting disputes over bargaining obligations and the unification of bargaining unions in industrial sites composed of numerous primary and subcontracting relationships. Additionally, collective bargaining between the primary employer and the subcontracting union, which does not have a direct contractual relationship with subcontracted workers, could become possible, thereby infringing on the management rights and independence of subcontracting employers and rendering the subcontracting system ineffective.

The expansion of the concept of labor disputes from disputes concerning the "determination of working conditions" to disputes concerning "working conditions" itself was also seen as potentially problematic. The FKI stated, "Management measures to strengthen corporate competitiveness, such as business organization consolidation and restructuring, could also become targets of strikes," expressing concerns about infringement on management rights.

They also pointed out that the expansion of the concept of labor disputes could lead to the normalization of strikes. Given that the right to strike is already more broadly guaranteed than the employer's right to defend, expanding the scope of labor disputes could deepen the power imbalance between labor and management and further deteriorate adversarial labor-management relations.

Furthermore, the amendment to the Labor Union Act stipulates that when calculating damages liability for illegal dispute actions, the responsibility should be determined by considering the individual contribution of union members who participated in the dispute actions, which could protect perpetrators. Since it is practically impossible for employers to specifically prove the individual contribution of union members to strike losses, this would only render the employer's sole means of responding to illegal dispute actions?claims for damages?ineffective.

Choo Kwang-ho, head of the Economic and Industrial Headquarters at the FKI, said, "If the Labor Union Act amendment is implemented, uncertainty in industrial sites will increase, causing significant damage not only to domestic companies' investments but also to foreign direct investment." He added, "The National Assembly needs to reconsider the legislation of the bill, taking into account the economic and social side effects it may bring."