The Ministry of Employment and Labor has issued a new guideline on the Trade Union Act that excludes high-level management decisions such as building a new plant from the scope of labor disputes. But it left room for staff reassignment — a core step in carrying out such investments — to become a subject of bargaining with unions, drawing controversy. Concerns are growing that large new investments involving astronomical sums could become entangled in labor disputes over workforce management.
According to business sources on the 3rd, industry officials have criticized the ministry's recently announced guideline on the scope of labor disputes as a half-measure that fails to resolve the core issue.
The guideline made clear that union demands for performance pay linked to operating profit, or a decision to build a new plant itself, are not subject to mandatory bargaining. But it stipulated that once a workforce plan for operating a new plant takes concrete shape, the resulting reassignment of staff can become a subject of bargaining. Management decisions themselves cannot be blocked, but the possibility of legal industrial action remains at the implementation stage.
The problem is that in advanced industries such as semiconductors, an investment decision and staff reassignment are difficult to separate in practice. When a large semiconductor project moves ahead, it is essential to deploy experienced engineers from existing sites to run cutting-edge production lines and to pass their skills on to new hires. Academics have also noted that staff reassignment is not an ancillary step but a core part of executing an investment.
That is where concerns about the new guideline arise. Even after a company decides on a large investment, it may have to shoulder the risk of conflict with unions while carrying out the workforce plan needed to operate the plant. The largest union at Samsung Electronics, the Super Enterprise Union, has already said it will take up the Honam semiconductor project as an agenda item for 2027 bargaining, citing opposition from a majority of its members. That means labor-management consultations could effectively become an additional variable as companies pursue strategic investments.
Business and legal experts also argue that treating workforce transfers tied to new investment the same as restructuring, which means cutting existing jobs, does not hold up legally. The Korea Enterprises Federation stressed that high-level management decisions such as building a new plant should not become a subject of labor conflict, and that it is difficult to secure competitiveness in advanced industries without the swift and flexible deployment of skilled workers.
Experts point out that administrative guidelines, which can change depending on the government in power or a ministry's interpretation, cannot resolve uncertainty on the ground. Courts already assess the legitimacy of transfer orders after the fact under the Labor Standards Act, and adding collective bargaining and industrial action procedures on top of that could chill corporate decision-making and raise costs for both labor and management.
As a result, some are calling on the National Assembly and the government to clarify the standard through supplementary legislation. The argument is that the Trade Union Act should provide a clear basis codifying the principle that reassignment stemming from new investment is not subject to labor disputes.
Amid global competition for semiconductor supremacy, the United States and Japan are accelerating their race to secure production facilities on the back of large subsidies. A business official said that the ability to deploy workers at the right time, not just capital and technology, is central to semiconductor competitiveness, and that uncertain labor regulations must not be allowed to sap momentum from national strategic projects.
