The "fragmented bargaining" that business groups most feared following the implementation of the Yellow Envelope Law (revised Trade Union Act) has become reality. The Gyeongbuk Regional Labor Relations Commission on Wednesday approved separate bargaining units for the Korean Federation of Trade Unions (KFTU) Metal Workers Federation, the Korean Confederation of Trade Unions (KCTU) Metal Workers Union, and the KCTU Construction and Plant Workers Union in their dealings with POSCO, effectively requiring the steelmaker to negotiate separately with four unions including its in-house union.
As the first ruling on employer status involving a private-sector major corporation and the first case determining bargaining structures for multiple subcontractor unions, the decision is expected to have significant ramifications.
The key implication is that the unified bargaining channel principle the government touted before the Yellow Envelope Law took effect has essentially crumbled. During implementation of the revised law, the government explained that even with multiple unions, corporate burdens could be managed through unified bargaining channels and separate bargaining unit systems. However, in the POSCO case, the commission went beyond separating KFTU and KCTU affiliates to recognize the KCTU's Metal Workers Union and Construction and Plant Workers Union as distinct bargaining units.
With bargaining unit separation now approved based on upper-level union affiliations, analysts predict major corporations will inevitably face negotiations with at least two subcontractor unions in addition to their in-house unions.
For conglomerates like POSCO with complex manufacturing, maintenance, and plant operations intertwined, demands, schedules, and agendas are likely to diverge significantly across unions, inevitably increasing the bargaining burden. This validates concerns raised by business groups before the law took effect that "if multiple subcontractor unions each pursue separate negotiations, it would essentially create a year-round bargaining system."
The impact is magnified when considering average bargaining periods for major corporate unions. According to the Korea Labor Institute, average bargaining periods for the KFTU Metal Workers Federation and KCTU Metal Workers Union from 2006 to 2024 reached 123 days. If POSCO conducts sequential negotiations with three subcontractor unions that have secured bargaining rights plus its in-house union, simple calculations show the process could easily exceed one year. Even with simultaneous negotiations, management would bear significantly greater costs and administrative burdens for negotiation personnel, legal review, and documentation. POSCO stated regarding the ruling that it "will engage sincerely in negotiations within the scope defined by relevant laws."
Business groups criticize that the unified bargaining channel system, far from serving as a safeguard to reduce corporate burdens, is actually functioning to institutionally support multiple negotiations. Concerns persist that the revised Trade Union Act could trigger "judicialization of labor relations" by dragging what should be autonomous labor-management relations into Labor Relations Commission rulings and litigation. A law firm attorney said, "There's a prevailing sentiment among companies that they'll ultimately have to go to court," adding, "I haven't yet heard of any company that immediately began preparing for actual negotiations after receiving an employer status determination from the Labor Relations Commission."
Nearly one month after the Yellow Envelope Law took effect, workplace confusion shows no signs of subsiding. With each Labor Relations Commission ruling, principles presented before implementation are shaken, and concerns raised at the time are becoming reality one by one. Both companies and unions are increasingly watching and waiting.
According to the office of People Power Party lawmaker Kim So-hee, as of Thursday, 985 subcontractor unions representing 143,786 members have demanded negotiations with 367 parent companies, but only about 30 companies have publicly announced receiving such demands. Approximately 170 unions have filed objections with the Labor Relations Commission. Meanwhile, about 70 unions withdrew their applications and are now moving to refile objections based on cases where employer status has been recognized.
Adding to the confusion, the Ministry of Employment and Labor's Collective Bargaining Support Committee ruled Wednesday that Taekwondo Promotion Foundation, a public institution, does not have employer status—potentially deepening uncertainty. This comes after subcontractor unions at all six public institutions had their employer status claims approved since the law took effect. A labor sector official said, "For the time being, more unions may choose to observe other cases rather than rush to seek Labor Relations Commission determinations on employer status."
