A labor union composed of workers employed by in-house subcontractors at HD Hyundai Heavy Industries will receive a Supreme Court ruling on the lawsuit it filed demanding collective bargaining with HD Hyundai Heavy Industries on the 21st.
The Supreme Court en banc panel, with Justice Oh Kyung-mi presiding, will hold a sentencing hearing this afternoon for the appeal in the lawsuit filed by the in-house subcontractors' chapter of the Korea Metal Workers' Union under the Korean Confederation of Trade Unions (KCTU) against HD Hyundai Heavy Industries, seeking an order to bargain collectively.
The subcontractor union demanded collective bargaining in 2016, saying the parent company, HD Hyundai Heavy Industries, is in a position to substantially control and decide the working conditions of workers employed by subcontractors. When HD Hyundai Heavy Industries did not respond, the union filed suit in 2017.
In April 2018, the first trial dismissed the claim, saying HD Hyundai Heavy Industries had no obligation to respond to the collective bargaining demand by the subcontractor union. The first-instance court said, "It is difficult to find that there is a subordinate employment relationship to the extent that an implied employment contract can be deemed to have been formed between HD Hyundai Heavy Industries and the in-house subcontractor workers."
As grounds, the court cited: ▲ in-house subcontractors at HD Hyundai Heavy Industries independently have capital and physical facilities and employ many specialists ▲ the assignment and reassignment of workers are carried out at the in-house subcontractors' own discretion, considering function and skill level, without instructions or permission from HD Hyundai Heavy Industries ▲ the fact that workers employed by in-house subcontractors work at business sites owned by HD Hyundai Heavy Industries is only due to the general characteristics of contracted work.
The appellate court also ruled for HD Hyundai Heavy Industries in November 2018. The appellate court said, "The wages of (in-house subcontractor) workers are determined by a comprehensive reflection of the subcontractors' management capacity, the union's bargaining power, and the workers' job skills," adding, "It is difficult to evaluate that HD Hyundai Heavy Industries exercised control or decision-making power over the wages of in-house subcontractor workers."
The in-house subcontractor union appealed, but the Supreme Court did not reach a conclusion for years. In the meantime, the so-called "yellow envelope law (revised Trade Union and Labor Relations Adjustment Act)" passed the National Assembly in Aug. last year and took effect on Mar. 10 this year. The law requires parent corporations that substantially determine the working conditions of subcontractor workers to respond to demands for collective bargaining. HD Hyundai Heavy Industries announced in March, when the yellow envelope law took effect, that the subcontractor union demanded collective bargaining.
However, the upcoming Supreme Court decision will be based on the former Trade Union and Labor Relations Adjustment Act, not the yellow envelope law. If the Supreme Court finds that even under the pre–yellow envelope law standard, HD Hyundai Heavy Industries can be the bargaining counterpart of the in-house subcontractor union, labor risks could spread across industry.
Within a month of the yellow envelope law taking effect, subcontractor workers filed more than 1,000 demands for bargaining with parent corporations. There are also concerns that, as in the recent demands by the Samsung Electronics union, subcontractor workers will stage large-scale strikes seeking a fixed percentage of the parent corporations' operating profit as bonuses.