Is the BGF-Cargo Alliance Agreement a signal for ‘direct negotiations’?

[CU Agreement, End of Direct Negotiation Test Bench ④] Chain of Waves

[Edit frequently]CUAn agreement between labor and management over logistics was reached and the conflict was resolved. The effectiveness of the agreement and the normalization of logistics are now key. We look at the meaning of government intervention, the logistics recovery situation, and the impact it will have on other labor disputes.

With the logistics dispute between BGF Logistics and Korea Freight Forwarders temporarily resolved, attention is focused on the impact it will have on the logistics industry as a whole. In an industry where multi-level consignment structures are common, as cases of high-ranking logistics corporations engaging in direct negotiations are emerging, demands from labor unions of other logistics companies for primary contract negotiations ahead of wage and collective agreements (wage agreements) in the second half of the year are expected to spread.

According to the logistics industry on the 29th, the CU branch of the convenience store branch of the Korean Confederation of Trade Unions (KCTU), the Public Transport Workers' Union, and the Freight Solidarity Headquarters (Cargo Solidarity) and BGF Logis tentatively agreed to a collective agreement at the Jinju branch of the Ministry of Employment and Labor at 5 a.m. that day. BGF Logis is a logistics subsidiary of BGF Retail, which operates convenience store CU.

The day before, Minister of Employment and Labor Kim Young-hoon and Rep. Kim Ju-young, secretary of the ruling party in the National Assembly's Climate, Energy, Environment and Labor Committee, visited the site and mediated the negotiations. The agreement includes a 7% increase in transportation fees, guaranteed paid vacation four times a year, immunity from civil and criminal charges and cancellation of provisional injunctions for cargo unions, and compensation for the families of deceased union members. Both sides initially decided to hold a signing ceremony at 11 a.m. on this day, but the schedule for the signing ceremony has not been finalized as detailed coordination has not been completed.

What the industry is paying attention to is the structure of negotiation. In the early stages of this dispute, the Korean Freight Solidarity pointed out BGF Retail, the main body of CU's franchise business, as a negotiating party, but as the strike continued to prolong, it took a step back by accepting BGF Logis, which is in charge of logistics, as a negotiating party. As a result, this agreement was reached with BGF Logis, the upper-level logistics corporation, taking the lead, rather than BGF Retail, the distribution contractor.

CU logistics is usually operated in a multi-level structure consisting of BGF Logis, logistics centers, local transportation companies, and individual delivery drivers. In this structure, the direct user and the higher-level corporation with actual operational influence are separated under the contract, so there are conflicting interpretations as to how far the negotiating partner will be viewed in the event of a dispute. Initially, the government also took the position that this issue should be viewed carefully in relation to usability issues, but the atmosphere changed as confusion on the ground increased due to the prolonged strike.

On the 20th, at a rally in front of the Jinju Logistics Center in Gyeongnam, a truck (replacement truck) hit union members, killing one person and injuring two others. In addition to the long-term strike, on-site deaths and damage to stores coincided with the Minister of Employment and Labor and the ruling party's representatives visiting the negotiation site and mediating, and it is interpreted that BGF Logis directly participated in the negotiations in this process.

Blockade of bases with less than 10% of union members... Controversy over recognition of representativeness

The fact that key supply chain bases have been halted due to low organization rates is also attracting attention from industry and labor circles. Of the 5,500 CU delivery drivers, it is estimated that 7 to 8%, or 380 to 440, belong to the cargo union. Although its proportion compared to the total article is not large, it is analyzed that negotiation power has increased with the blockade of the Jincheon Logistics Center, which serves as a national hub.

Controversy over representativeness also remains. Criticism is being raised about whether it is appropriate for the union to act as the de facto representative bargaining agent in a situation where less than 10% of all delivery drivers belong to the Korea Freight Workers' Union. Issues also arise as to whether there was sufficient consultation regarding representation with non-union members and other stakeholders during the negotiation process.

The convenience store industry's unique business structure is also considered a factor in increasing pressure for an early settlement. Convenience store logistics has a high proportion of fresh food, event products, and daily delivery products, so even short-term delivery disruptions can lead to a decrease in sales. Some in the industry estimate the amount of damage to BGF Retail due to this incident to be in the range of 5 to 6 billion won.

As the situation entered a controlled phase, the company was faced with the follow-up task of recovering damage to franchisees and preparing support measures. BGF Retail issued an official statement on this day and emphasized, "We will closely examine the damage situation and prepare support measures for franchisees as soon as possible."

This settlement is expected to have a significant impact on labor-management relations in the logistics industry in the future. As there remains a precedent of higher-level corporations engaging in direct negotiations due to the burden of prolonging disputes, there are observations that demands for similar methods of negotiation are likely to spread during the wage and collective bargaining phase in the second half of the year. There is a possibility that it will be mentioned as a reference case during the discussion on the amendment to Articles 2 and 3 of the Trade Union Act that is pending in the National Assembly.

However, some in the legal community and industry are cautiously saying that this case should not be interpreted as an issue of recognition of the user-friendliness of primary contracts across the logistics industry. Bang In-tae, lawyer at Daeryun Law Firm, said, "In this case, BGF Logis, not BGF Retail, entered into negotiations as a user," and added, "We need to be cautious in viewing this as an example of recognition of the use of the primary contract across the logistics industry."

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

[View full article]
Is the BGF-Cargo Solidarity Agreement a signal for 'direct negotiations'? (Shortcut)