South Korean business groups pushed back against the Ministry of Employment and Labor's new guidelines on the scope of labor disputes, warning the rules could disrupt corporate investment and the adoption of new technologies. Employers say that if worker reassignments arising from new plant construction or the introduction of new technology are treated as legitimate subjects of labor disputes, even national strategic projects such as a large-scale semiconductor complex in the Honam region could be derailed.
The Korea Enterprises Federation released a joint statement on behalf of the business community on the 3rd addressing the ministry's guidelines on performance-based pay and the scope of labor disputes.
"As illustrated by the examples presented in the guidelines, if reassignments stemming from new plant construction or the adoption of new technology such as AI become subjects of labor disputes, this would excessively restrict employers' personnel and management authority and could ultimately disrupt large-scale investment projects," the federation said.
The guidelines released by the ministry the same day drew a line, stating that opposition to the construction of a new plant itself is difficult to regard as a subject of mandatory bargaining, mediation or industrial action. However, the ministry said the matter can become a bargaining subject from the point at which changes in working conditions — such as restructuring or reassignment — are expected as a result of new plant construction or the introduction of new technology.
Business groups countered that "reassignment is not about cutting employment or shrinking the organization, but a process of allocating human resources to newly created or expanded production units." If reassignment does not disadvantage workers in terms of their working conditions, employers argue, it amounts to routine personnel movement and therefore falls outside the scope of labor disputes.
Employers particularly warned that industrial action could halt operations at plants built through large-scale investment projects. Even when an investment such as a new plant has been approved, skilled workers and researchers cannot be secured through new hiring and outside recruitment alone, they said, meaning that a union strike blocking staffing decisions would make plant operation impossible.
The groups also expressed concern over the inclusion of reassignments and changes in work methods tied to new technology in the scope of disputes, arguing that adopting new technology is a routine management decision aimed at improving efficiency. "In an era of AI and semiconductor transformation, when rapid and flexible deployment of personnel is essential, reassignments must be excluded from the scope of labor disputes so that labor-management conflict does not disrupt new plant construction and the adoption of new technology," an industry official said.
Criticism also poured in over the guidelines on performance-based pay, with employers saying vague provisions would add to confusion in the workplace. The ministry's guidelines state that performance-based pay falling under matters that determine working conditions, including wages, welfare and other treatment of workers, is subject to mandatory bargaining. But they did not set out specific criteria for when such pay constitutes a working condition. That is why business groups are calling for the guidelines to spell out, at a minimum, the specific requirements for the types of pay that the Supreme Court has recognized as wages, so that the scope of mandatory bargaining is clearly delineated.
Choi Eun-rak, head of the research division at the Korea Chamber of Commerce and Industry, said the guidelines "will help reduce confusion in the field," but cautioned that "if these criteria are applied broadly at companies, investment and management could be disrupted." Choi added: "What matters most is that these criteria are upheld as they stand in actual labor disputes. We hope discussions will also take place on institutional measures to ensure they do not waver."
