Minister Kim Young-hoon of the Ministry of Employment and Labor (MOEL) and Minister Kim Jung-kwan of the Ministry of Trade, Industry and Resources will hold a closed-door meeting with the business community on the 21st. The meeting is reportedly to hear last-minute views from management ahead of the Mar. 10 implementation of "the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers" (amended Trade Union and Labor Relations Adjustment Act Articles 2 and 3).
According to the government and the business community, the two Ministers will meet with Executive Vice Chairman Lee Dong-geun of the Korea Enterprises Federation (KEF) and executives from major corporations on the day. The venue and the details of the talks will be kept confidential. At the meeting, management is expected to deliver its views on the "interpretive guidelines for the amended Trade Union and Labor Relations Adjustment Act" that the Labor Ministry released on Dec. 26 last year.
The guidelines set out detailed criteria on "who is an employer and what constitutes the subject of an industrial dispute." The government presented a standard that even without a direct employment contract, an entity can be deemed an employer if "structural control" is possible. For example, if a primary contractor can structurally constrain decision-making over working conditions—such as the working hours or rest times of subcontracted workers, or the number of workers needed for specific processes—it is highly likely to be recognized as an employer.
The contentious point is the requirements for recognizing employer status in the area of "occupational safety." The guidelines allow recognition of the primary contractor's employer status when primary and subcontracted workers work at the same site and it is difficult for the subcontractor alone to manage or improve facilities and equipment. If the primary contractor controls the safety and health management system—such as work processes, safety procedures, and protective equipment—and the equipment or facilities are owned by the primary contractor, it is deemed an employer.
The business community pushed back. In an opinion submitted to the Labor Ministry, KEF said, "If efforts to ensure industrial safety end up imposing greater legal risks, it will create the side effect of discouraging safety management support for subcontractors," adding, "Whether subcontractors' offices, warehouses, and break rooms related to the work environment are areas dominated or decided by the primary contractor should also be excluded from the factors considered in determining employer status."
There is also controversy over "economic dependency," which is to be considered as a secondary indicator. If a subcontractor has an exclusive transaction relationship with a primary contractor or has a high sales dependency, the likelihood of recognizing employer status increases. Critics say that even normal contracting relationships could be drawn into disputes over employer status.
The scope of industrial disputes includes "managerial decisions that affect working conditions," which is also a point of concern for management. The basis for determining whether working conditions are affected is whether there is a "substantial and concrete change in working conditions." Decisions whose purpose is to change corporate organization—such as mergers, partitioning, transfers, or sales—are not subjects for collective bargaining in themselves, but the Labor Ministry interpreted that if employment adjustments, such as layoffs or reassignment due to restructuring, are objectively anticipated in the process, unions can demand collective bargaining.
On this, KEF said, "Unlike quantitative restructuring, if even reassignment—which does not presuppose stripping employees of their status and does not necessarily entail significant changes to core working conditions such as wages or working hours—becomes a subject of collective bargaining, employers' legitimate personnel authority will be restricted."