From the first day the revised Trade Union and Labor Relations Adjustment Act Articles 2 and 3, known as "the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers," took effect, subcontractor unions have been lining up to demand talks with parent corporations. In particular, voices are growing in industries with high dependence on partners such as autos, shipbuilding and construction that wage and bonus gaps between parent companies and subcontractors must be closed, raising expectations that this year's wage and collective bargaining will be more difficult than ever.
According to the auto industry on the 10th, the Hyundai IHL union, a subcontractor of Hyundai Mobis and affiliated with the Korean Metal Workers' Union, held a press conference in front of Hyundai Mobis' headquarters on Teheran-ro in Gangnam-gu, Seoul, on Tuesday morning to oppose the sale of Hyundai Mobis' lamp division.
The Hyundai IHL union has consistently expressed opposition to this decision since January, when Hyundai Mobis signed a memorandum of understanding (MOU) to sell the lamp division.
The reason, it said, was concern over job insecurity for employees of Hyundai IHL, the subsidiary that supplied lamps. They conveyed to Hyundai Mobis their opposition to the sale of the lamp division and demanded that it also agree to 2026 collective bargaining for wage increases.
The Gwangyang and Pohang branches of in-house subcontractors at POSCO under the Metal Workers' Union also gathered Tuesday in front of POSCO Center on Teheran-ro. They said POSCO has used as many as 20,000 subcontracted workers to cut labor costs and enable free dismissals, which they argue constitutes the crime of "illegal dispatch and illegal employment."
The union urged, "POSCO should acknowledge it is the de facto employer and immediately agree to collective bargaining with subcontracted workers."
This is not the only case of corporations moving to demand talks with parent companies as the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers, takes effect. Subcontractor unions at Hyundai Motor and HD Hyundai Heavy Industries said they would proceed with steps to bring the parent companies to the bargaining table, including sending a third bargaining request on Tuesday. The HD Hyundai Heavy Industries subcontractor union is demanding wage increases and bonus payments, while the Hyundai Motor subcontractor union is calling for conversion to regular positions.
According to labor circles, the Korean Confederation of Trade Unions (KTCU) is set to send bargaining request letters en masse to the parent business operators of its seven affiliated industrial unions. More than 137,000 subcontracted workers at some 900 business sites will participate in the demand to bargain with parent companies. On Tuesday, the KTCU also formally declared a fight to win parent-company bargaining by chanting "Bring out the real boss" on Sejong-daero in Seoul.
The Metal Workers' Union said Tuesday, "So far, 10,000 members working at 147 corporations have requested bargaining with 16 parent companies," adding, "We will continue to increase the number of members demanding parent-company talks, and if the parent companies refuse to negotiate, we will answer with a struggle."
◇ Path opens to bargain directly with parent companies that make "substantive decisions"
The yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers, centers on expanding the scope of employers and the subjects of labor disputes, and limiting corporations' damage claims against striking workers. It opens the way for subcontractors to bargain directly with parent companies that have "substantive and specific control and decision-making power." The scope of disputes has also expanded from wages to include, when citing that they cause substantive changes in working conditions, even overseas investment or plant expansions.
The business community fears that the implementation of the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers, will trigger frequent bargaining demands from subcontractor unions, causing severe disruption to company operations. Although the Ministry of Employment and Labor (MOEL) has prepared interpretive guidelines, management says some in labor circles are demanding talks simply because they are the parent company, making legal disputes and conflicts between parent and subcontractor corporations unavoidable.
The Korea Enterprises Federation (KEF) said, "Even before the law took effect, subcontractor unions demanded that parent companies come to the table and pressured companies through illegal shows of force, such as occupying establishments," adding, "We are concerned that disputes between labor and management will continue over the scope of employers and bargaining agendas."
The business community says both sides must adhere to principles to ensure at least minimal stability in labor relations. The KEF stressed, "Labor should refrain from making excessive demands beyond the scope where employer status is recognized in collective bargaining with parent corporations or from committing illegal acts to push them through, and should abide by bargaining procedures."
It also urged, "The government and labor relations commissions should focus administrative resources to prevent labor's demands or industrial actions that deviate from bargaining procedure manuals, and establish a strict decision-making framework."
◇ Confusion in this year's wage and collective bargaining foreseen… corporations say "avoid being the first to bargain"
The business community expects severe turmoil over wage and collective bargaining starting this year. Subcontractor unions are asking corporations to raise wages and bonuses to narrow the gap with parent companies. If so, in shipbuilding, autos and construction—where the parent–subcontractor structure is clear and there are from hundreds to as many as thousands of partners—the added expense demanded could be astronomical.
In Hyundai Motor's case, there are about 8,500 partner companies. At HD Hyundai Heavy Industries, Hanwha Ocean and Samsung Heavy Industries, in-house subcontractors account for about 60% of total employees. In fact, at Hanwha Ocean, employees of Welliv, a subcontracted catering company, are continuing a sit-in demanding bonus payments.
The Welliv union is pressuring by saying, "Successful bargaining with parent company Hanwha Ocean must be the starting point for embedding the revised Trade Union and Labor Relations Adjustment Act in the workplace." The KTCU also planned to start a march on Sejong-daero on Tuesday and conclude the event by delivering a letter of protest urging parent-company bargaining to Hanwha Ocean.
For now, corporations are holding back on aggressive responses, saying they will at least avoid becoming the "first establishment for parent-company bargaining." A representative at a large parent corporation who requested anonymity said, "If we enter direct talks with dozens of subcontractor unions, management costs and administrative burdens will become unmanageable from the company's standpoint," adding, "We could also face backlash from existing regular-employee unions and draw attention from the political sphere, so we will watch the situation for now."