South Korea issues guidelines on the limits of labor disputes
South Korea’s Ministry of Employment and Labor issued guidelines in September stating that union demands for bonuses in the form of a predetermined share of a company’s profits are not subject to mandatory bargaining or labor disputes. This was reported by The Korea Herald in a column by Yoo Chun-sik.
The document also excludes a number of management decisions from mandatory bargaining, including relocating production, selling a business and introducing artificial intelligence.
Which issues were excluded from bargaining
The ministry said that performance bonuses related to wages, social benefits and other working conditions can generally be subject to mandatory bargaining. However, under the guidelines, demands to tie a bonus to a fixed share of an enterprise’s profits are difficult to regard as a subject of such bargaining.
Issues not subject to bargaining also include demands to cancel or block the construction of new factories, overseas investments and the relocation of production bases. This also applies to attempts to influence the location, scale, area of relocation or timing of the implementation of such decisions.
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A similar approach applies to the sale of a business: demands to cancel a sale, interfere in the terms of a deal, change the buyer or object to the sale itself remain outside the scope of bargaining. Demands to oppose the introduction of AI or automated equipment are also not subject to mandatory bargaining. At the same time, related issues may become subject to bargaining if changes in working conditions are objectively expected at the stage of implementing a management decision.
Debate over the law
Employment and Labor Minister Kim Young-hoon said the guidelines are intended to make labor relations more predictable, prevent conflicts and promote dialogue between workers and employers.
The columnist notes that the guidelines are not binding on workers, employers, the Labor Relations Commission or courts. Unlike the guidelines, an enforcement decree under the framework law could have external legal force, but its adoption would require procedural steps and approval by the Cabinet.
Yoo Chun-sik also writes about calls to revise the so-called Yellow Envelope Act — amendments to the Trade Union and Labor Relations Adjustment Act. In the author’s view, the problems with this law cannot be resolved solely through guidelines or an enforcement decree, so a public discussion of its revision is needed.
