The government on the 3rd released guidelines on the scope of labor disputes under the revised Trade Union Act, known as the "yellow envelope law," specifying that management decisions such as demands for a fixed percentage of profits as bonuses and the construction or relocation of plants are not subject to mandatory bargaining or industrial action. The guidelines exclude from bargaining union demands for bonuses set as a fixed share of profits, which could infringe on management rights and the interests of third parties such as shareholders, and reaffirm that unions may not strike over strategic management decisions themselves, including corporate investment, the sale or acquisition of businesses and the adoption of artificial intelligence. The guidelines stipulate, however, that decisions such as building a new plant do fall within the scope of bargaining when they bring about changes in working conditions through workforce reductions or reassignment. Performance-based bonuses that can be regarded as part of working conditions, such as wages and benefits, were also included, leaving room for ambiguity in interpretation.
Including new corporate investment such as plant construction and expansion that inevitably requires staff reassignment, along with the adoption of new technology to improve efficiency, in the scope of bargaining is a serious problem. Under these guidelines, companies would have to obtain union consent for even routine personnel transfers or changes in work methods that accompany expanded investment, making delays in corporate decision-making unavoidable. The lack of clarity over which performance-based bonuses count as wages also has the potential to trigger labor-management conflict. The government said the new guidelines, which come about six months after its February interpretive guidelines on the yellow envelope law, are intended to "enhance predictability in the field and prevent labor-management disputes," but it is hard to conclude that strike risk has been reduced. Demands for a fixed percentage of profits as bonuses have at least been excluded from the scope of industrial action, but it is questionable whether guidelines that carry no legal force can constrain union behavior.
As things stand, projects such as the semiconductor cluster in the Honam region and process upgrades like Hyundai Motor's deployment of the humanoid robot Atlas cannot avoid exposure to the risk of union strikes. The Korea Enterprises Federation, in a statement, voiced concern over excessive restrictions on personnel and management rights and over disruptions to large-scale investment projects. If the execution of large investments on which the nation's fate depends is delayed and the country falls behind in the race for advanced technology, future growth will remain out of reach. Stopgap guidelines can no longer stop indiscriminate strikes that hold the national economy back. The government should move quickly, even at this late stage, on supplementary legislation to the yellow envelope law that would exclude management decisions from the scope of bargaining without exception.
