A labor union made up of subcontracted workers at Hyundai Steel and Hanwha Ocean has won the right to strike against the parent corporations. The so-called "yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers" (amended Trade Union and Labor Relations Adjustment Act), which codifies such cases, has not yet taken effect. Business groups pushed back, calling it an "overreach."
According to labor groups on the 27th, the National Labor Relations Commission decided to "suspend mediation" on the dispute mediation applications that the Hanwha Ocean Shipbuilding Subcontractors' Union and the Hyundai Steel Irregular Workers' Chapter filed against parent corporations including Hanwha Ocean and Hyundai Steel.
The commission said, "Because the parties' positions are far apart, we determined it would be difficult to present a mediation proposal, so we are closing mediation without presenting one," adding, "Although agreement was not reached through mediation, we recommend that labor and management conclude bargaining autonomously or use the commission's post-mediation system."
The commission also said, "Hyundai Steel and Hanwha Ocean qualify as employers as parties to labor relations, as it has been confirmed that they have substantial control over some bargaining agendas, including bonuses and workplace safety."
The Hyundai Steel and Hanwha Ocean subcontractor unions filed for mediation, saying the parent corporations are obligated to come to the table. However, Hyundai Steel and Hanwha Ocean did not attend any of the three mediation sessions held through the day. With the commission's decision, the Hyundai Steel and Hanwha Ocean subcontractor unions have gained the lawful authority to strike.
The amended Trade Union and Labor Relations Adjustment Act will take effect on Mar. 10 next year. However, the commission has in the past also found that parent corporations have employer status in relation to subcontractor unions.
The commission said the same day that it "determined employer status with reference to the commission's 2022 decision and the Seoul Administrative Court's ruling in July." In 2022, the Seoul Administrative Court ruled that employer status was recognized for Hyundai Steel regarding industrial safety and health, and for Hanwha Ocean regarding bonuses, tuition assistance, and workplace safety. The case is on appeal.
The case was seen as a bellwether for whether the commission would broadly recognize a duty for parent corporations to bargain with subcontractor unions ahead of the amended Trade Union and Labor Relations Adjustment Act taking effect.
The Korea Enterprises Federation (KEF) said in a statement the same day, "Although the counterpart for collective bargaining should be determined through a court's final ruling, the commission's hasty suspension of mediation has undermined judicial stability."
It added, "Once the amended Trade Union and Labor Relations Adjustment Act takes effect on Mar. 10 next year, the labor commission will be the primary body to judge employer status of parent companies and determine separation of bargaining units," and said, "The commission's overreach will cast doubt on fair judgment and significantly reduce corporations' willingness to comply."