Seven months after the revised Trade Union Act, widely known as the "Yellow Envelope Act," took effect, fewer than three in 10 companies say the Labor Relations Commission is issuing related rulings in line with the law and government guidelines.
According to a survey released on the 14th by the Korea Enterprises Federation on corporate perceptions of Labor Relations Commission rulings and prime contractor-subcontractor bargaining since the revised union law took effect, only 27.4% of companies said the commission's rulings on prime contractors' status as employers are "being made in accordance with the law and the Ministry of Employment and Labor's interpretive guidelines." The survey covered 62 companies that have gone through commission rulings in cases involving prime contractors and subcontractors since the law took effect.
By contrast, 40.3% said the rulings are "not being made in accordance with the law and the Ministry of Employment and Labor's interpretive guidelines." The most cited reason for that view was the "use of compliance with public-law obligations, such as the Occupational Safety and Health Act, as grounds for recognizing employer status" (52%, multiple responses allowed). Other reasons included "recognition of employer status over matters that are not working conditions" (48.0%) and "recognition of employer status on the grounds of ownership of means of production and the exercise of facility management rights" (32.0%).
Companies voiced concern about side effects arising in bargaining or mediation with subcontractor unions. The most common concern in bargaining was "excessive union demands that include agenda items for which employer status has not been recognized" (66.1%), followed by "demands to bargain with the prime contractor over matters that should be negotiated with subcontractors, such as wages and union activities" (43.5%) and "higher bargaining costs from multiple negotiations and prolonged talks" (33.9%).
In mediation between prime contractors and subcontractors, companies also most often cited "mediation proceeding with the addition of agenda items for which employer status has not been recognized" (59.7%) as their biggest concern. Another 48.4% of respondents said they felt burdened by the "launch of mediation procedures even while a dispute over the prime contractor's employer status is still under way."
Asked what supplementary legislation is most urgently needed to reduce turmoil in the labor market, companies pointed to "clarifying the criteria for determining a prime contractor's employer status" (67.7%). Many also called for "excluding high-level corporate management decisions from the scope of labor disputes" (54.8%). The responses are seen as reflecting concern that expanding the scope of labor disputes to management decisions such as investment and business or organizational restructuring could constrain swift decision-making and the execution of investment.
Lee Dong-keun, standing vice chairman of the Korea Enterprises Federation, said uncertainty surrounding Labor Relations Commission rulings has persisted since the revised union law took effect. "To reduce this confusion at industrial sites and secure predictability, prime contractors' employer status must be determined fairly and strictly in accordance with statutory provisions and administrative guidelines, alongside supplementary legislation," he said.