South Korea's business community has called for a legal revision that would exclude staffing decisions tied to new factory construction from collective bargaining. The demand comes as concerns mount over possible disruptions to the 800 trillion won ($560 billion) Honam semiconductor cluster, after the Samsung Electronics (005930) labor union said changes to working conditions resulting from staff reassignment require consultation between labor and management. The group argues the government should remove that uncertainty through legislation.
The Federation of Korean Industries said on the 22nd that it had submitted its "2027 Business Community Policy Proposals," compiled from input gathered at corporate worksites, to the government and the National Assembly. Timed to next year's policymaking cycle, the document contains 119 items requiring improvement across 10 areas, including the artificial intelligence transition, competitiveness in advanced and energy industries, corporate regulation, the labor market and household stability.
The FKI first recommended amending the revised Trade Union and Labor Relations Adjustment Act — known as the "yellow envelope law" — to exclude from collective bargaining matters inherent to management rights, such as investment and staffing, as well as relocations of work sites arising from the transfer or construction of plants.
Staffing for new fabs, or semiconductor production facilities, has recently emerged as a flashpoint in labor-management disputes in the chip industry. Choi Won-hoi, head of the Samsung Electronics branch of the Samsung Group Supra-Enterprise Labor Union, the company's largest union, said on the 6th at a parliamentary audit of the Ministry of Trade, Industry and Energy by the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee that changes to working conditions related to the development of the Honam semiconductor cluster are matters requiring labor-management consultation.
The claim rests on the current union law, which defines "business management decisions affecting working conditions" as subject to labor disputes. The Ministry of Employment and Labor also said, in its "Enforcement Guidelines on Performance-Based Pay and Other Subjects of Labor Disputes" released on the 3rd of last month, that reassignment to newly built plants — involving changes in work site and job duties — along with changes in work arrangements and support for relocation, such as allowances and commuting or moving expenses, could fall within the scope of bargaining.
Because the Honam semiconductor cluster is a large-scale, state-led project, the FKI argues the government should move to amend the union law to reduce management uncertainty for companies. The group also called for expanding industrial support by adding next-generation vehicles, biopharmaceuticals and vaccines, and small modular reactors to the list of items eligible for the domestic production tax credit the government is seeking to introduce.
In the AI field, the group pointed to the need for an integrated support framework for the physical AI industry. "Laws and regulations related to physical AI are scattered across individual industrial sectors, leaving an inadequate legal basis to support the ecosystem as a whole," the FKI said. "Major countries such as China and Japan have already enacted physical AI ordinances or established national strategies, and are moving in earnest to foster the industry through steps including data disclosure and the creation of testbeds."
The FKI also said a legal basis is needed to cover the costs of dismantling facilities and restoring the environment that arise from the government-led restructuring of the petrochemical industry. It called for expanding the space budget, which stands at just 0.8% of the U.S. level, and for institutional changes requiring prior review before new regulations are introduced. On household matters, the group proposed differentiating the matching support structure of the Youth Future Savings program by income bracket — under the current design, government support falls as savings decrease — to expand assistance for low-income young adults.
"For private investment and innovation to revive, obstacles at corporate worksites must be removed quickly," said Lee Sang-ho, head of the FKI's economic affairs division. "We hope the business community's views will be actively reflected in the policymaking process of the government and the National Assembly, so that this year's growth momentum in our economy can be sustained next year."