[Reporter’s Notebook] Supreme Court Opens the Door to “Trick Strikes”

Even if a labor union halts factory operations through an illegal strike, the Supreme Court has ruled that if the company's sales do not decrease, the union or its members cannot be held liable for damages caused by the strike. The court determined that if the illegal strike ends before any sales decline occurs and the lost production volume is later compensated through overtime work, it is difficult to recognize any sales loss or fixed cost damages resulting from the illegal strike.

However, the Supreme Court overlooked certain aspects. It made no mention of fixed costs such as electricity bills incurred when compensating for lost production due to the work stoppage, or opportunity costs from being unable to perform other tasks. The ruling that the union can avoid liability for an illegal strike if the sales losses incurred during the strike period are later recovered is difficult for companies to accept. This is because it does not consider the benefits a company gains when it does not have to perform additional work caused by the illegal strike. Ultimately, it is hard to avoid criticism that the Supreme Court’s judgment focuses solely on damage recovery from illegal strikes.

According to this ruling, labor unions will have a way to avoid liability for damages even if they hold all kinds of illegal assemblies in the future. If they compensate for the lost production volume through overtime work after ending the strike, they will not have to pay damages.

The Supreme Court also did not clearly specify a deadline by which the production volume lost due to the illegal strike must be recovered. Because the Supreme Court issued a vague ruling, lower courts are expected to face confusion going forward. For example, if unions conduct “trick strikes” lasting hours or days and gradually increase working hours over several months to slowly recover production volume, conflicting rulings on liability for damages are likely to emerge.

Although the court added a proviso that places the burden of proving that the company did not suffer final damages on the striking workers, the Supreme Court’s ruling effectively grants a pardon for illegal strikes. The decision, which does not restrict illegal strikes but only exempts unions from liability for damages, has sparked concerns among companies that it will encourage strikes. The Korea Employers Federation argued, “Additional costs such as overtime pay arise to compensate for lost production, but these costs fall entirely on the victimized company.”

Strikes are a legitimate form of collective action that workers can exercise. However, illegal strikes must not be tolerated. There are concerns that this Supreme Court ruling has handed workers a cheat code for illegal strikes.