The Ministry of Employment and Labor has concluded that a shareholding relationship between companies alone does not create a legal obligation to respond to a union's demand for collective bargaining, even after the revised Trade Union Act took effect. The ministry said, however, that a shareholder company can be recognized as an employer if it substantially controls or determines the working conditions of another company's employees.
According to a written response the ministry submitted to the office of Rep. Lee Chul-kyu of the People Power Party, released on the 15th, the ministry said that "the mere fact that a shareholder company holds a stake in another company does not make it an employer under the Trade Union Act in its relationship with workers employed by that other company."
The union at Samsung Biologics (207940) demanded collective bargaining on the 6th of this month with Samsung Electronics (005930), its second-largest shareholder. Samsung Electronics rejected the demand on the grounds that it is not a party to any direct employment contract. The ministry explained that a shareholder company may still be recognized as an employer if it substantially and specifically controls or determines the working conditions of another company's workers.
The Samsung Biologics union said it "did not demand bargaining on the basis of a simple shareholding relationship alone," and said it would take the case to the Labor Relations Commission this month for a ruling on whether Samsung Electronics qualifies as an employer.
Industry officials voiced concern that the scope of bargaining counterparts remains unclear despite two sets of administrative guidelines issued by the government. Lee said the confusion on the ground that had been flagged since the bill was first legislated is now materializing, and he urged the government to come up with measures.