Labor Law Turns Public Agency Relocation Into Bargaining Fight

The Ministry of Employment and Labor has issued an interpretation holding that personnel reassignments and changes in working arrangements stemming from the relocation of state-run institutions to provincial areas are subject to mandatory bargaining and industrial action. The decision to relocate an institution itself is not subject to industrial action, the ministry said, but any change in working conditions, such as personnel reassignment, does fall within that scope. When a state-run institution moves, staff at its headquarters must be relocated, and when institutions are merged or abolished, redeploying employees is the natural course. The ministry's stance amounts to laying a lawful foundation for unions to strike — not over opposition to relocation, but over changes in working conditions. It is administration by evasion.

The second round of relocating state-run institutions to provincial areas is a core policy agenda of President Lee Jae-myung. The government plans to apply a principle of minimizing exemptions to roughly 350 institutions based in the capital region, finalize relocation plans this year and begin the moves next year. In tandem with the relocation, the government will consolidate and reduce 109 institutions, or about 20% of all state-run institutions, by unifying overlapping functions, merging subsidiaries and strategically redeploying infrastructure agencies. The government has shown firm resolve to make the second round succeed, given that the first round, designed under the Roh Moo-hyun administration, failed to sufficiently drive regional development.

The problem is that the ministry has left the contentious "yellow envelope law" — the amended Trade Union Act — untouched while issuing enforcement guidelines each time an issue arises, generating confusion and side effects. The law expanded the scope of industrial action to include "management decisions affecting working conditions." The first round of relocation proceeded through labor-government consultations without legal binding force, but the second round is structured so that it is effectively impossible without union consent. A law that was misbuttoned from the start has become a shackle on state affairs, holding back the relocation of public institutions.

With labor groups having mobilized early against relocation, the law is likely to serve as a legal fence justifying protests and strikes. The Korean Confederation of Trade Unions has issued a statement denouncing the government, and the Korea Financial Industry Union, which includes state-run banks, has held a general strike rally. They have the law as solid backing. Hoping for the successful relocation of state-run institutions without amending the law is like expecting scorched-rice tea straight from a well. Rather than slapping on stopgap bandages issue by issue, the fundamental solution is to revise the law itself.