Companies 'non-responsive' to demands for negotiation on the Yellow Envelope Act... Expert: “If we persist, the situation will worsen”

Expert: “Rather than rejecting it outright, we should respond selectively by issue.”

On the 10th, the so-called Yellow Bag Act was implemented in earnest and industrial sites were engulfed in turmoil. The key point is that if the main contractor company has a substantial influence on the working conditions of subcontracted workers, it must be viewed as an employer and respond to collective bargaining.

According to the legal community on the 31st, since the enforcement of the amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act, more than 400 subcontracting unions have requested collective bargaining with main contracting companies, and only about 10 companies have reportedly accepted the request.

Experts warn that such inaction could result in a greater legal burden. Bang In-tae, a lawyer at Daeryun Law Firm, emphasized, “Now is not the time to worry about whether or not to agree to negotiations, but rather to consider what, with whom, and to what extent we should negotiate.”

The standard for a primary contractor to be recognized as an employer is whether or not it has ‘structural control over working conditions.’ Even if the main contractor does not directly instruct subcontractors to do work, they can be viewed as employers if they virtually eliminate the possibility for subcontractors to determine their own working conditions through production schedules or cost structures. Attorney Bang explained, “A typical example is when the main contractor confirms the production plan and affects the working hours of the subcontractor, or makes it difficult for the subcontractor to autonomously adjust wages through the unit price of the contract.” However, if it remains at the level of general contract management, such as presenting quality standards or negotiating delivery dates, it is difficult to view it as a user.

By industry, the impact is expected to be greater in places where the multi-level subcontracting structure is established and where primary and subcontracting work is closely interconnected, such as shipbuilding, automobiles, steel, logistics, and construction. Hanwha Ocean and Hyundai Heavy Industries have already received a request for negotiation from the subcontractor union and announced it.

If you ignore negotiation requests or delay, you may be subject to legal liability. The union law defines refusal or delay in collective bargaining without justifiable reasons as an unfair labor practice. Attorney Bang said, “If the primary agency remains without any response even though there is a possibility that it can be viewed as an employer, it could lead to an application for relief from the Labor Relations Commission, an administrative lawsuit, or even criminal punishment.”

However, this does not mean that all negotiation demands must be complied with. Attorney Bang advised, “Instead of blanket rejection, we need an approach that examines each issue.” If the subcontractor actually exercises independent equipment and personnel rights, and the main contractor only manages quality and delivery, employer status can be denied. Issues in which the main contractor is not involved, such as individual disciplinary action for subcontracted employees or detailed wage systems, and procedural shortcomings of the union requesting negotiation are grounds for defense.

The manual released by the Ministry of Employment and Labor in February of this year also needs to be checked. The original position of viewing all employees of the main contractor and subcontractors as one bargaining unit was changed to classifying them as separate bargaining units. Attorney Bang emphasized, “Companies that prepared to respond based on the previous standards need to reexamine right now.”

Attorney Bang said, “Future risks are more likely to arise from avoiding negotiations without any preparation than from incorrect negotiations,” and added, “Management should recognize this as not just a problem of the human resources department, but an overall management problem that involves production, purchasing, safety, and legal affairs.”

Reporter Hwang Jeong-won (garden@sidae.com)

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Companies 'non-responsive' to demands for negotiation on yellow envelope law... Expert: “If we persist, the situation will worsen” (Shortcut)