On the so-called "N% bonus," which demands a portion of business performance such as operating profit as bonuses, the government said on the 3rd that it "is not a subject of dispute." However, the government noted that for the autonomous bonus agreements already concluded between SK hynix(000660) and Samsung Electronics(005930), "there is an obligation to comply." It means corporations will find it hard to readjust existing bonus agreements on the occasion of the government's release of implementation guidelines. Vice Minister Kwon Chang-jun of the Ministry of Employment and Labor (MOEL) said, "Once agreed, the agreement is valid and there is an obligation to comply."
In business circles, some said only corporations that first entered talks out of consideration for workers are left bearing the burden of bonuses. Samsung Electronics' special management performance bonus agreement will be maintained for 10 years, through 2035. In contrast, HD Hyundai Heavy Industries, which began a rolling strike on the 2nd after bonus talks fell through, faces a new phase of bargaining.
The gist of the "implementation guidelines on management performance bonuses as subjects of labor disputes," which the government released that day, is largely twofold. First, demands for bonuses linked by a certain ratio to corporate profits such as sales, operating profit, and net profit are not mandatory bargaining items. The reason is that there is a high risk of infringing on third parties' fundamental rights, such as the employer's freedom of business and shareholders' property rights.
Second, business management decisions themselves—such as corporate spinoffs, sales, overseas investment, and AI adoption—are not subjects of bargaining. In particular, it limited union interference in new corporate investments, such as the Honam semiconductor cluster. However, if changes to working conditions arising from such management decisions—such as layoffs or job reassignments—are specifically established or confirmed, they become subjects of bargaining.
The implementation guidelines released that day are not an enforcement decree or rule with legal binding power. Observers said it will not be easy to change labor-management bargaining practices at industrial worksites immediately upon the release of the guidelines. That is why business leaders reacted by saying, "Ultimately, the problem must be fundamentally resolved through legal revisions" (Sohn Kyung-shik, chairman of the Korea Enterprises Federation), and "We hope discussions will proceed on ways to supplement this standard institutionally so it does not wobble" (Choi Eun-rak, head of the Research Division at the Korea Chamber of Commerce and Industry).
However, given that it will in effect serve as a guideline for the Labor Relations Commission's mediation and arbitration practice, it is expected to have the effect of constraining unions' room to maneuver as they demanded high-level bonuses and even threatened to strike. In particular, for corporations already in a dispute phase, like HD Hyundai(267250) Heavy Industries, the company side's bargaining power is more likely to strengthen based on these guidelines.
Since the interpretation is unfavorable to labor, there are also concerns that social conflict could intensify, with the two major umbrella unions holding large rallies to seek the scrapping of the guidelines. After the Ministry of Labor released the guidelines that day, the two umbrella unions demanded their withdrawal. The Federation of Korean Trade Unions said that if the Labor Relations Commission mechanically applies the guidelines, it will challenge their illegality through administrative litigation and a constitutional complaint, while the Korean Confederation of Trade Unions (KCTU) said it would launch a struggle to abolish the guidelines.
There also remains a fairness controversy between workers at corporations that have already concluded bonus agreements and workers at corporations who were just about to sit down at the bargaining table. Seok Byung-hoon, a professor at Ewha Womans University, said, "Issues remain, including fairness among workers and the application of implementation guidelines that lack legal binding force," adding, "Binding measures such as revising the parent law, the 'yellow envelope law,' are inevitable."