Enforcement of the Trade Union and Labor Relations Adjustment Act on March 10
Separation of bargaining units under "general criteria" and "principal?subcontractor-specific criteria"
The government will finalize interpretive guidelines and begin supporting the on-site implementation of the so-called Yellow Envelope Act (the amended Trade Union and Labor Relations Adjustment Act) in line with its enforcement on March 10 next month. The aim is to promote substantive bargaining between principal employers and subcontractor unions and thereby minimize confusion in the early stages of the law’s implementation.
The Ministry of Employment and Labor announced on the morning of February 24 that a partial amendment to the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act was deliberated and approved at a Cabinet meeting presided over by President Lee Jaemyung. The amended Enforcement Decree will take effect on March 10, the enforcement date of the amended Trade Union and Labor Relations Adjustment Act.
Separate framework for bargaining units in principal-subcontractor relations
The core of this Enforcement Decree amendment is the clarification of the criteria for separating bargaining units in principal-subcontractor structures. Until now, when bargaining was requested at workplaces with multiple unions, the single bargaining channel procedure has been applied. Under the amendment, this same framework will also govern procedures when a subcontractor union bargains with a principal employer, but the criteria for reasonably separating bargaining units have been clarified to reflect the characteristics of subcontracted workers.
Specifically, Article 14-11 of the Enforcement Decree has been completely overhauled to separately stipulate the general criteria for separation and integration of bargaining units and the criteria applicable to subcontracted workers in principal-subcontractor relations. Paragraph 3 sets out the general standards that apply commonly to all workplaces. It requires that the need to separate bargaining units be assessed mainly on the basis of objective differences in working conditions such as the nature of the work and working environment, wage systems, working hours, and benefits, as well as on employment types such as contract form and job category, and existing bargaining practices. This organizes and codifies the factors that have been accumulated in court rulings and labor commission decisions. The government stated that “this has blocked concerns that bargaining units among existing unions within a principal employer, such as production and office workers, could be indiscriminately fragmented.”
Instead, a separate decision-making framework will apply to bargaining involving subcontracted workers in principal-subcontractor relations. Newly added Paragraph 4 specifies that, when determining the bargaining unit between a principal employer and a subcontractor union, priority must be given to considering the commonality of interests between unions, the appropriateness of interest representation, and the potential for conflict or distortion of labor-management relations if the bargaining unit is maintained. Elements that had been included as one of the general criteria have thus been elevated to the core criteria for subcontractor bargaining. The government explained that this will enable a more substantive reflection of the reality that the work structures and interests of subcontracted workers differ from those of principal employer workers.
In addition, as the single bargaining channel system will also apply to principal-subcontractor bargaining, labor commissions will be allowed to preliminarily determine certain aspects of employer status at the pre-bargaining stage. Under this structure, bargaining will proceed once employer status is recognized, which is expected to reduce uncertainty over the parties and scope of bargaining. The government expects this to minimize procedural disputes and help labor and management prepare for bargaining in a predictable manner in accordance with the law.
Finalization of interpretive guidelines and launch of on-site support system
The government has also finalized the interpretive guidelines. The guidelines, prepared after an administrative notice period from December 26 last year to January 15 this year, provide explanations on the expanded criteria for determining employer status and the scope of labor disputes. In particular, by distinguishing and refining the explanatory language for the concepts of “structural control” and “illegal dispatch,” which have been presented as key elements in determining employer status, the government has reduced the potential for misunderstanding on the ground. With respect to the subject of labor disputes, it has also explicitly specified “reassignment due to restructuring,” rather than routine reassignment, to prevent confusion.
To support interpretation in individual cases, the government will operate a “Collective Bargaining Judgment Support Committee.” Comprising legal experts and field practitioners, this committee will provide advisory opinions on issues that may become contentious during bargaining, such as whether a party qualifies as an employer. While judgments will be organized around the majority view, minority opinions will also be made public to enhance transparency. The relevant directive was enacted on the same day, and from February 25, parties will be able to request authoritative interpretations on employer status and related issues through the Ministry of Employment and Labor’s labor portal.
On-site support will proceed in parallel. The government plans to fully roll out “win-win bargaining consulting for principal and subcontractor” to assess how well labor and management are prepared for bargaining and to support coordination on bargaining agendas and methods. It intends to first establish best practices at institutions in the public sector where bargaining is likely to occur between parent and subsidiary entities, and then spread these practices to the private sector. Minister of Employment and Labor Kim Younghoon said, “Even after the law comes into force, we will organically link the interpretive guidelines, consulting, and judgment support systems to prevent disputes and support the establishment of mutually beneficial labor-management relations.”
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