Labor law changes could multiply Korean negotiation units

Ahead of the March implementation of the “Yellow Envelope Act,” an amended labor union law, the government on Nov. 24 announced a proposed revision to the enforcement decree that would allow subcontractor unions to negotiate directly with primary contractors. Under current labor union law, when a single workplace has more than one union, a representative union must be designated to request negotiations. The proposed amendment would allow subcontractor unions to negotiate separately from primary unions. While the government maintains that similar subcontractor unions can be grouped together, concerns have emerged that in large corporations, dozens or even hundreds of new negotiation units could emerge, potentially keeping labor-management talks ongoing throughout the year.

Under the proposed revision, if parties fail to reach an agreement through voluntary negotiations, the Labor Relations Commission can establish separate negotiation units for subcontractor unions, taking into account labor conditions, interests, and conflicts among the parties. When interests differ significantly, negotiation units could be split by individual subcontractors, grouped by similar jobs or labor conditions, or formed into a single unit for all subcontractor unions. "The proposal ensures the substantive bargaining rights of subcontractor unions while preventing confusion at workplaces," the Ministry of Labor said.

However, concerns remain that the separation of negotiation units, previously an exception under labor law, could now become a standard option, significantly increasing the number of negotiation counterparts and sessions. When splitting negotiation units, not only differences in labor conditions but also labor-management practices and the parties’ intentions must be considered, raising the risk of excessive fragmentation. In industries such as automotive, shipbuilding, and construction, where a single large company works with hundreds or thousands of subcontractors, dozens of negotiation units could appear simultaneously within one workplace. Primary unions, previously excluded from negotiations, could also demand separate units, further intensifying conflicts.

Critics argue that the government is interfering too heavily in labor relations, which should proceed autonomously. The Labor Relations Commission would need to assess the status of primary employers and determine how to divide negotiation units, potentially leaving labor-management relations dominated by government oversight. To prevent overburdening the commission, the government proposed creating a “Committee for Employer Status Assessment,” but it remains unclear whether labor and management would accept decisions from a committee with uncertain legal authority.

The government must work to minimize workplace confusion and negative effects before the law takes effect in March. Clear criteria for separating negotiation units should be established to prevent conflicts from escalating due to the sudden increase in bargaining entities. Standards for determining employer status, the scope of negotiation obligations, and the range of labor disputes must also be clarified.