As judgments emerge that Hyundai Motor and other large corporations are "employers with substantive control" over subcontracted workers, the bargaining table between prime contractors and subcontractors is likely to expand without limit. This is because bargaining rights have been recognized not only for special employment positions that do not receive a fixed monthly salary but also for indirectly affiliated partner firms.
If they sit across the table, demands for wage hikes and bonus payments are expected to pour in. Because this is an area that already sees intense conflict with regular unions, corporations now face a situation in which they must engage in bargaining all year long.
On the afternoon of the 15th, the Ulsan Regional Labor Relations Commission issued a decision that the "real" employer of 1,675 union members handling production, security, protection, cooking, and sales at Hyundai Motor Namyang Research Center and in-house subcontractors at the Ulsan, Asan, and Jeonju plants, security companies, in-house cafeterias, and automobile sales agencies is Hyundai Motor. The Korean Metal Workers' Union demanded bargaining with Hyundai Motor on their behalf, but when Hyundai Motor did not post the bargaining demand notice, citing that it did not constitute "employer status," the Ulsan commission ordered a correction.
This raises the likelihood that large corporations' bargaining tables will open without limit. According to lawmaker Lee Jong-bae of the People Power Party, from Mar. 10, when the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers, took effect, to the 5th of this month, 431 prime contractors received bargaining demands from 1,137 subcontractor unions over three months.
The unions affiliated in this tally number 161,830 members in total. The yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers, is a revised Trade Union and Labor Relations Adjustment Act that deems a prime contractor an employer if it can substantively and concretely control or determine working conditions, even without a direct employment contract.
Confusion is compounded by the recognition of prime contractors' employer status for special employment positions as well. Among the 10 unions that demanded bargaining with Hyundai Motor this time is the Car Master union, whose members are not regular employees receiving fixed monthly salaries but instead earn commissions based on vehicle sales performance.
In particular, the parcel delivery industry is expected to be affected immediately. Parcel couriers, who are independent sole proprietors, are a representative special employment group. In April, CJ Logistics and Hanjin Express were recognized as employers of parcel couriers belonging to the Cargo Solidarity of the Korean Public Service and Transport Workers' Union, and CJ Logistics is awaiting a retrial decision.
Demands from partner firms handling noncore tasks outside manufacturing processes are also expected to follow. On the same day, the Central Labor Relations Commission found that partner firms providing meals and cleaning can bargain directly with Hanwha Ocean.
On this, the Korea Enterprises Federation said, "If the counterparties to collective bargaining are expanded beyond direct production prime–subcontractor relationships to include indirect support partners, we are concerned that confusion surrounding collective bargaining will spread across the industry."
If prime–subcontractor bargaining tables open, the subjects of negotiation are expected to expand to wage increases and bonus payments. Already, the union at P&S Logis, a subcontractor that transports semiconductors and parts for SK hynix, is demanding bonuses from the prime contractor. They say they contributed to SK hynix's astronomical profits and therefore should not face discrimination in bonuses.
The subcontractor union at HD Hyundai Heavy Industries also held a rally in front of the Ulsan shipyard in Mar., saying, "The prime contractor should pay bonuses not only to in-house subcontractors but also to outside partner firms." The concerns raised before the introduction of the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers—that it would be hard to escape a year-round bargaining landscape—are becoming reality.
Hyundai Motor Group is a representative case. The Hyundai Motor union is demanding this year that 30% of last year's net profit be paid out as bonuses, and, as management has not accepted this, it is taking steps to prepare for a strike. In addition, the Korean Metal Workers' Union said the previous day toward Hyundai Motor Group, "Group affiliates such as Hyundai Steel, Hyundai Mobis, Hyundai Glovis, and Hyundai WIA must also begin prime-contractor bargaining immediately."
However, many hurdles remain before prime–subcontractor bargaining fully takes off. In Hyundai Motor's case, the Ulsan regional commission plans to send the parties a written decision in a month specifying which subcontractors require bargaining. After receiving it, Hyundai Motor can seek a retrial at the central commission if it objects. If the Central Labor Relations Commission recognizes it, the prime contractor's duty to bargain arises, but corporations may also file an administrative suit within 15 days of service of the decision.