The National Labor Relations Commission and a regional labor board have ruled that Hyundai Motor and Hanwha Ocean are the de facto employers of subcontracting and contracting firms. On Tuesday, the Ulsan Regional Labor Relations Commission upheld a case on bargaining demands filed by 10 subcontractor unions at Hyundai Motor. The National Labor Relations Commission recognized union bargaining rights in a case filed against Hanwha Ocean by Wellive, a contractor responsible for catering and commuter bus operations.
As a result, Hyundai Motor must bargain not only with non-regular workers handling logistics at its plants but also with workers in non-manufacturing categories such as cafeterias, plant security, and vehicle sales. Hanwha Ocean must also respond to bargaining from unions at catering and laundry outsourcing firms.
This ruling expands the scope of collective bargaining counterparts beyond direct production prime-subcontractor relationships to indirect support and cooperation relationships, raising concerns of major confusion at industrial sites. In its interpretation guidelines for the Yellow Envelope Act, published in February, the Ministry of Employment and Labor stipulated that "plant cafeterias and the like, where general directive authority is recognized under contracting agreements, do not constitute structural control by the prime contractor over union members of subcontracting firms." However, the National Labor Relations Commission and the Ulsan Regional Labor Relations Commission ignored these labor ministry guidelines and recognized prime-contractor employer status for all subcontracted workers working within prime-contractor workplaces, fueling confusion instead. It is also a serious problem that the National Labor Relations Commission used the fulfillment of contracting parties' legal obligations under laws such as the Occupational Safety and Health Act and the Serious Accidents Punishment Act as grounds for recognizing employer status, creating a contradiction in which companies that faithfully carry out their legal obligations end up bearing bargaining obligations.
Currently, the National Labor Relations Commission has 26 employer-status review cases involving major companies including POSCO, Hyundai Steel, and SK ecoplant, while cases filed with regional labor boards reach 80. With this decision, the likelihood has grown that outsourcing and contracting work such as catering, cleaning, and security at most major domestic companies will become subject to prime-contractor bargaining. Given Korea's industrial structure, in which most non-core tasks are entrusted to partner firms, it is evident that major domestic companies will be saddled with an explosion of bargaining demands from outsourcing and contracting firms.
The side effects of the Yellow Envelope Act are serious enough that even Prime Minister Kim Min-seok has stepped forward to mention the need to supplement the scope of employers. Nevertheless, the Korean Confederation of Trade Unions has announced a general strike for the 15th of next month and is putting forward the expansion of prime-subcontractor bargaining as a core demand. Before the confusion stemming from the Yellow Envelope Act is amplified even further, sweeping revisions and supplements to the law must be hastened so that it can become a system that maintains a balance between "labor rights" and "management rights."
