Procedures for
Subcontracted Worker Unions to Participate in Collective Bargaining

Bongsoo Jung (Korean labor
attorney, KangNam Labor LawFirm)

I. Introduction

Article 2 of the
amended Labor Union Act explicitly provides that: “‘Employer’ means a business owner, a person in charge of managing the
business, or a person who acts on behalf of the business owner with respect to
matters concerning the employees of the business. In this case, even a person
who is not a party to the employment contract shall be deemed an employer to
the extent that such person is in a position to practically and specifically
control or determine the working conditions of employees.” Under this
expanded concept of employer, even where there is no direct employment contract
relationship, if a principal contractor is in a position to practically and
specifically control or determine the working conditions of employees of a
subcontracting company, the principal contractor is deemed to be an employer.
Accordingly, a labor union composed of subcontracted workers may demand
collective bargaining with the principal contractor and conclude a collective
agreement. In this process, if the principal contractor, as an employer,
refuses a request for collective bargaining from a subcontracted worker union,
such refusal constitutes an unfair labor practice due to refusal to bargain
collectively. In response to such unfair labor practices by the principal contractor,
not only may applications for remedial relief be filed, but criminal punishment
may also be sought. Therefore, principal contractors must fulfill their
obligations as employers in accordance with the revised concept of employer.

In this regard,
Article 29-2 of the Labor Union Act provides that: “In cases where two or more labor unions established or joined by
employees exist in a single business or workplace, regardless of their
organizational form, the labor unions shall designate a bargaining representative
union and request bargaining.” Accordingly, although subcontracted workers’
unions have the right to request collective bargaining, they are required to
request bargaining through a single bargaining channel by forming one
bargaining window. Notwithstanding this provision, where subcontracted worker
unions require separate bargaining due to significant differences in working
conditions, types of employment, or other factors within the workplace, they
may engage in separate bargaining upon approval by the Labor Relations
Commission. In particular, since subcontracted worker unions are composed of
workers from multiple subcontracted companies, it is anticipated that many
applications for the separation of bargaining channels will arise.

In this context,
this article seeks to examine in detail the procedures and methods of the
bargaining channel unification process for subcontracted worker unions,
together with the system for separation of bargaining channels.

II. Procedures for
the Unification of Bargaining Channels for Subcontracted Worker Unions

When a
subcontracted worker union requests collective bargaining, (i) the employer
must announce the fact of the bargaining request and confirm the participating
unions. Thereafter, (ii) the employer must allow a period of 14 days for the
labor unions participating in bargaining to autonomously form a bargaining
delegation. In cases where the subcontracted worker unions participating in
bargaining fail to autonomously form a bargaining delegation, the employer
shall select a majority union from among the labor unions participating in
bargaining and designate it as the bargaining representative union.

1. Request for
Bargaining by a Labor Union and Confirmation of Participating Unions

l  Special rule for calculation of periods: Pursuant to
Article 161 of the Civil Act, where the last day of a period falls on a
Saturday or a public holiday, the period shall expire on the following day.

(1) Request for Bargaining by a Subcontracted Worker
Union (Labor)

Any labor union that wishes to engage in bargaining with
the employer may request bargaining in writing, stating its name, number of
members, and other relevant details, from the date that is three months prior
to expiration date of the collective agreement (Enforcement Decree of the Labor
Union Act, Article 14-2).

(2) Public Announcement of the Fact of the Bargaining
Request (Employer)

An employer that
has received a bargaining request must publicly announce the fact of the
bargaining request for seven days from the date of receipt on the bulletin
board of the relevant business or workplace, or by other means. Even if the
employer believes there is only one labor union at the relevant business or
workplace, employees may be members of industry-based or regional unions;
therefore, the employer must announce the fact of the bargaining request.

(3) Application by Other Labor Unions to Participate in
Bargaining (Labor)

Applications must
be made within the announcement period for the fact of the bargaining request
(seven days from the date of announcement). If a labor union fails to request
bargaining within this period, it may not participate in the bargaining channel
unification procedure. Within this period, a subcontracted worker union may
request corrective measures from the Labor Relations Commission by asserting
the employer status of the principal contractor, even in the absence of a
contractual relationship. The Labor Relations Commission must decide within 10
days whether the principal contractor is in a position to practically and
specifically control or determine the working conditions of the subcontracted
workers. However, where such a determination is difficult, the period may be
extended up to 10 additional days, during which the employer status of the
principal contractor with respect to the subcontracted worker union must be
confirmed (Enforcement Decree of the Labor Union Act, Article 14-3).

(4) Public Announcement Confirming Participating Unions
(Employer)

The employer must make a public announcement for five
days starting from the day following the end of the announcement period for the
fact of the bargaining request. Only labor unions confirmed as
bargaining-requesting unions may participate in the procedure for determining
the bargaining representative union and may file applications for correction
regarding violations of the duty of fair representation.

Where a subcontracted worker union raises an objection to
the employer’s determination of participating labor unions, it may request
corrective measures from the Labor Relations Commission. In response, the Labor
Relations Commission must render a decision on the requested matter within 10
days; where it is difficult to render a decision within that period, the period
may be extended up to 10 additional days (Enforcement Decree of the Labor Union
Act, Article 44-5).

2. Determination
of the Bargaining Representative Labor Union

l  Special rule for calculation of periods: Pursuant to
Article 161 of the Civil Act, where the last day of a period falls on a
Saturday or a public holiday, the period shall expire on the following day.

(1-1) Voluntary Unification (Labor)

After the
bargaining-requesting unions are confirmed, the labor unions shall voluntarily
determine the bargaining representative union within 14 days from the date on
which the bargaining-requesting unions are confirmed or determined. With
respect to the method of voluntary unification among labor unions, there are no
specific procedures or restrictions; therefore, any method may be freely chosen
as long as it reflects the unanimous intent of the participating unions
(Enforcement Decree of the Labor Union Act, Article 14-6).

(1-2) Notification of Majority Union (Labor)

A majority union
refers to a union that accounts for a majority of the total members of all
labor unions participating in the bargaining channel unification procedure.
Even if there is no single majority union, where two or more unions, through
delegation, alliance, or other methods, together account for a majority of the
total union members, they shall also be recognized as a majority union. A union
claiming to be a majority union must notify the employer that it is the
bargaining representative union, as the union accounting for a majority of the
total union members, within five days from the date on which the period for
voluntary unification expires (Enforcement Decree of the Labor Union Act,
Article 14-7).

(2) Public Announcement of Notification (Employer)

Where the employer
receives notification that a union has been chosen as the majority labor union,
the employer must publicly announce the details of such notification for five
days from the date of receipt of such notification so that other unions and
employees are aware of this fact.

(3) Joint Bargaining Representative Group (Voluntary or
Labor Relations Commission)

Where there is no
majority labor union, the confirmed bargaining-requesting unions must form a
joint bargaining representative group and request bargaining with the employer.
The joint bargaining representative group shall be formed voluntarily by the
labor unions. If no agreement is reached, it shall be formed in accordance with
a decision of the Labor Relations Commission (Enforcement Decree of the Labor
Union Act, Articles 14-8 and 14-9). Eligibility to participate in the joint
bargaining representative group is limited to those unions whose membership
accounts for at least 10% of the total membership of all unions participating
in the bargaining channel unification procedure. Labor unions whose membership
accounts for less than 10% of the total union membership, and their members,
shall still be subject to the collective agreement concluded by the joint
bargaining representative group with the employer, and shall also be eligible
to participate in strike authorization votes.

III. Separate Bargaining through the Separation of
Bargaining Channels for Subcontracted Worker Unions

1. Legal Basis

Since two or more labor unions
may be established in a single workplace, conflicts could arise between them if
the employer were to bargain individually with each of them, and adverse
effects such as increased bargaining costs for the employer would be expected.
In order to prevent this, current law provides that, where two or more unions
of the same organizational form exist in a single business or workplace, a
bargaining representative union shall be designated to request bargaining
(Article 29-2 of the Labor Union Act).[1] In other words, the principle of “one company, one bargaining representative
union” is adopted. Nevertheless, where there are significant differences in
working conditions, types of employment, bargaining practices, and the like
within a single business or workplace, separating bargaining units may help avoid
conflicts between labor unions and contribute to the improvement of employee
working conditions. In line with this purpose, where it is recognized that
there is a need to separate bargaining units, bargaining units may be separated
upon obtaining approval from the Labor Relations Commission (Article 29-3 of
the Labor Union Act).

In accordance with expansion of the definition of “employer,” when
subcontracted worker unions that do not have an employment contract
relationship request bargaining, and when determining whether to separate
bargaining channels or to integrate separated bargaining units, the following
items shall be considered as criteria (Enforcement Decree of the Labor Union
Act, Article 14-11):

① Significant differences exist in working conditions arising from the
nature and content of work, work environment, degree of responsibility, wage
system, components and method of payment, working hours, holidays and leave,
welfare benefits, remuneration and service regulations, and the like;

②Significant differences exist in type of employment
based on contract form and method, job category, recruitment method, retirement
age, whether there is personnel interchange, and the like;

③Significant differences exist in bargaining practices
based on the scope of eligibility for union membership and union member
qualifications, the scope of employees who have joined labor unions, whether
and how labor-management consultations such as existing collective bargaining
have been conducted, and the scope of application of bargaining subjects;

④ Matters exist that are recognized as necessitating the separation of
bargaining units or integration of separated bargaining units for reasons
equivalent to those set forth in items ① through ③.

2. Methods of Separation

3. Procedures for the Separation of Bargaining Units

(1) Eligible Applicants

An application for the separation of bargaining units may
be filed jointly by the company and its labor unions, as the parties to labor
relations, and may also be filed unilaterally by either the labor unions or the
company (Article 29-3 of the Labor Union Act).[3]
Labor unions that did not participate in the bargaining channel unification
procedure may also apply for the separation of bargaining units, as may branch
unions or sub-branches under an industrial union (Enforcement Decree of the Labor
Union Act, Article 14-11).

(2) Timing of Application

A labor union or an employer may apply for a decision on
the separation of bargaining units (i) before the employer publicly announces
the fact of the bargaining request, or (ii) if the employer has publicly
announced the fact of the bargaining request, after the date on which the
bargaining representative union has been determined (Enforcement Decree of the Labor
Union Act, Article 14-11). Accordingly, except for the period during which the
bargaining channel unification procedure is in progress, an application for a
decision on the separation of bargaining units may be filed at any time.

(3) Effect of Application

Where the Labor Relations Commission receives an application
for the separation of bargaining units, it shall notify all labor unions and
the employer of the relevant business or workplace of the contents thereof and
request that they submit their opinions. The Commission shall render a decision
on the separation of bargaining units within 30 days from the date of receipt
of the application. Where such an application is filed, the progress of the
bargaining channel unification procedure shall be suspended (Enforcement Decree
of the Labor Union Act, Article 14-11).

(4) Effect of Decision

Where the Labor Relations Commission renders a decision
to separate bargaining units, the labor union may request collective bargaining
from the employer. In such cases, the employer that has received a request for
collective bargaining must recommence the bargaining channel unification
procedure from the beginning for each separated bargaining unit. However, where
there is an existing collective agreement, collective bargaining may be
requested from the date that is three months prior to expiration date of the
validity period of that collective agreement (Enforcement Decree of the Labor
Union Act, Article 14-11).

(5) Objection Procedures and
Standards

The provisions governing procedures for objecting to the arbitration
decisions by the Labor Relations Commission on the separation of bargaining
units shall apply mutatis mutandis (Articles 29-3 and 69 of the Labor Union Act).
Accordingly, an objection may be filed with the National Labor Relations
Commission within 10 days only where
the decision of the Labor Relations Commission on whether to separate
bargaining units is illegal or constitutes an abuse of authority.

The Supreme Court has held that: “An arbitration award may be contested only where the procedure
thereof is illegal, where the content thereof is illegal due to a violation of
the Labor Standards Act or the like, or where the arbitration award is rendered
illegally or in excess of authority, such as in cases where it addresses
matters that are not the subject of a dispute between the parties or, without
justifiable grounds, goes beyond the scope of the dispute between the parties.
An arbitration award is not subject to challenge merely because it contains
provisions that are unfavorable to one party.”[4]