Fix the flaws

: Revised labor law needs complementary legislation to restore legal certainty

Hanwha Ocean Co. last week filed a lawsuit with the Seoul Administrative Court, challenging a National Labor Relations Commission ruling recognizing it as the employer of union members of an in-house subcontractor responsible for cafeteria and commuter bus services.

This is the first case since the Yellow Envelope Act —- the amended Trade Union and Labor Relations Adjustment Act —- took effect in March in which a main contractor has challenged in court the commission's determination that it qualifies as an employer of subcontractors.

Companies are expected to increasingly contest decisions by labor relations commissions widely regarded as pro-labor. Recent Supreme Court rulings in cases filed before the revised act went into force have also reinforced companies' resort to the courts by reaffirming that an employer has a duty to engage in collective bargaining only when it has a direct contractual relationship with the workers concerned. The legal battle over the Yellow Envelope Act has entered a second round, shifting from labor relations commissions to the courts.

This lawsuit stems from inherent flaws in the revised Trade Union and Labor Relations Adjustment Act.

The amended law has broadened the definition of an employer in vague terms to mean "a person who can substantially and concretely control and determine working conditions," further aggravating confusion at industrial workplaces.

The problem is becoming even more serious as labor relations commissions, the first government bodies to determine whether a prime contractor qualifies as an employer of subcontracted workers, have been consistently siding with labor.

The confusion extends beyond the recognition of a prime contractor as the employer of subcontractor union members. Employers fear that the scope of collective bargaining and strikes could be expanded without limit. Organized labor has been pressuring companies, emboldened by the revised law that has expanded the scope of labor negotiations and industrial actions to include even matters traditionally considered management prerogatives, such as wage systems and decisions on building or relocating factories.

At a Cabinet meeting on July 21, President Lee Jae Myung made clear his view that demands by some major companies' unions for a share of operating profits to be allocated as performance bonuses should not be subject to labor disputes, saying, "Personally, I think the case against allowing such demands as a legitimate cause for strikes is stronger."

That the president ordered a revision of the enforcement decree regarding demands for performance bonuses clearly demonstrates just how serious this issue is.

Referring to a recent move by a Samsung Electronics union to seek labor-management negotiations by treating the construction of a semiconductor plant in the southwestern Jeolla area as an issue subject to industrial action, Lee expressed concern, saying, "The scope of issues that can become the subject of labor disputes appears to be expanding too broadly."

That is a judgment based on plain common sense.

Lee ordered action, stating that the government must establish clear standards for labor disputes to minimize confusion, and the Ministry of Employment and Labor is reportedly working on related enforcement decrees and administrative interpretation guidelines.

However, due to the inherent ambiguity of the regulations and the union-biased nature of labor relations commissions, even government guidelines are unlikely to clear up confusion at industrial workplaces.

The revised law lacks provisions delegating detailed criteria, such as the scope of labor disputes, to a presidential decree, and generally, guidelines have no external legal binding force.

Ultimately, unless the law is amended, companies are likely to turn to the courts to resolve conflicts surrounding its controversial provisions. If disputes are prolonged through labor commission reexaminations and subsequent court rulings, economic damage and confusion are bound to escalate.

Labor circles are also pushing back, arguing that the legislative intent of the revised law cannot be diluted through administrative guidelines.

Ultimately, the only way to quickly resolve the confusion and controversies arising from the revised act is to enact complementary legislation.

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