South Korean employers pushed back against the Ministry of Employment and Labor's guideline on the scope of labor disputes, warning it could disrupt corporate investment and the adoption of new technologies. Their concern is that if staff reassignments tied to new plant construction and new technology fall within the scope of labor disputes, large investments such as the semiconductor mega-project in the Honam region could be delayed or scrapped.
The Korea Enterprises Federation (KEF) released a statement to that effect on the 3rd regarding the ministry's guideline on the scope of labor disputes covering management performance bonuses.
"As illustrated in the examples presented in this guideline, if reassignments arising from new plant construction or the adoption of new technologies such as artificial intelligence become subject to labor disputes, it would excessively restrict employers' personnel and management rights and risks resulting in setbacks to large-scale investment projects," the employers' group said.
The guideline released by the ministry the same day drew a line, saying demands opposing the construction of a new plant itself are difficult to treat as subject to mandatory bargaining, mediation or industrial action. It said, however, that the matter could become a bargaining issue at the point when changes in working conditions, such as restructuring or reassignments, are expected as a result of new plant construction or the adoption of new technologies such as AI.
In response, the employers' group stressed that "reassignment is not about cutting jobs or shrinking the organization but a process of allocating human resources to newly created or expanded production units." If a reassignment does not disadvantage workers' conditions, it amounts to a routine personnel move and therefore does not fall within the scope of labor disputes, the group said.
The group argued that industrial action would make it difficult to operate plants built under large investment projects. "Even once an investment such as a new plant is decided, skilled and research personnel cannot be secured through new hiring or outside recruitment alone, so if industrial action arises over staffing, operating the plant becomes virtually impossible," it said.
On the adoption of new technologies, the group expressed concern that such decisions are routine management judgments aimed at improving efficiency, yet the resulting reassignments and changes in work methods could be treated as subject to labor disputes. "In an era of AI and semiconductor transformation, where rapid and flexible deployment of personnel is essential, reassignments arising from this 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 technologies," the group said.
The group also criticized rules on management performance bonuses, such as payouts set at a percentage of operating profit, saying vague standards would add to confusion in the workplace. The ministry's guideline states that management performance bonuses that fall under matters determining working conditions, including wages, benefits and other treatment of workers, are subject to mandatory bargaining, but it does not spell out when such bonuses actually constitute working conditions such as wages. "At a minimum, the guideline needs to set out the criteria for the types of management performance bonuses that courts have recognized as wages, in order to clarify when they become subject to mandatory bargaining," the group said.
