Subcontractor labor unions at Hyundai Steel and Hanwha Ocean have obtained legal strike rights, a decision that has caught the business community off guard as it comes before the implementation of the so-called Yellow Envelope Law.
The National Labor Relations Commission on Sunday issued suspension of mediation rulings on dispute mediation requests filed by Hyundai Steel's non-regular workers' branch and Hanwha Ocean's (042660.KS) shipbuilding subcontractor union. A suspension of mediation ruling grants the unions involved legal strike rights.
Courts had previously ruled that Hyundai Steel and Hanwha Ocean partially qualify as employers of the two subcontractor unions. When a company is recognized as an employer, it becomes obligated to negotiate with the union. However, both cases are currently under appeal.
The commission reportedly based its recognition of employer status for the two subcontractor unions on the first-instance court rulings.
The Korea Employers Federation issued a statement immediately after the ruling was announced, criticizing that the decision "will have a very negative impact on labor-management relations between main contractors and subcontractors." The federation said the commission "made a hasty decision without waiting for the outcome of the legal disputes between Hyundai Steel, Hanwha Ocean and the subcontractor unions."
The mediation suspension ruling is expected to draw controversy. It raises concerns that after the Yellow Envelope Law takes effect on March 10 next year, the commission may issue rulings that favor labor over management.
The commission will play a key role after the law's implementation, including determining single bargaining channels, separating negotiation units between main contractors and subcontractors, and judging whether main contractors qualify as employers for subcontractor union negotiations.
"Today's ruling by the commission raises doubts about whether it will make fair judgments after the Yellow Envelope Law takes effect," the federation emphasized.
