POSCO will begin collective bargaining with three subcontractor unions as early as this year, becoming the first major corporation to have its status as a primary employer recognized under the revised Trade Union Act, commonly known as the "Yellow Envelope Law," which enables negotiations between primary contractors and subcontractor unions.
The POSCO case signals that workplaces with subcontractor unions affiliated with both the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU) could face "triple bargaining" including their own in-house unions.
The Gyeongbuk Regional Labor Relations Commission ruled on January 8 to approve the separation of bargaining units in a case filed by members of the KCTU-affiliated Korean Metal Workers' Union and the National Plant Construction Workers' Union. As a result, POSCO must now negotiate with three subcontractor unions: the FKTU-affiliated Korea Metal Workers' Union Federation, and the KCTU-affiliated Metal Workers' Union and Plant Construction Workers' Union. Including POSCO's in-house union, the company faces annual negotiations with four separate unions.
This marks the first time a labor commission has ruled on a bargaining unit separation case since the revised law took effect, and the first time a major corporation has been designated as a primary employer. The Ministry of Employment and Labor had designed the new bargaining framework to separate primary and subcontractor union bargaining units, with subcontractor units further divided by union. The intent was to reduce the burden on primary contractors negotiating with numerous subcontractor unions through bargaining channel unification.
POSCO's employer status was recognized in the area of safety, as expected. The commission considered that POSCO's subcontractor unions cannot independently eliminate hazards or install safety equipment. The decision to separate bargaining units was based on factors including potential inter-union conflicts, representational interests, and the nature of work.
If POSCO accepts the ruling, actual negotiations will proceed following a public notice of the unions' bargaining demands. However, the company may file for review with the Central Labor Relations Commission if it considers the decision unjust.
Major Corporations Face 'Triple Bargaining' as New Standard
The POSCO case has significant implications as it represents the realization of "fragmented bargaining" that business groups had warned about before the law's implementation. POSCO now effectively faces separate negotiations with four unions including its in-house union.
The key issue is that the government's principle of single bargaining channel unification has effectively collapsed. While the government had explained that corporate burdens could be managed through channel unification and unit separation systems even with multiple unions, this case not only separated FKTU and KCTU affiliates but also recognized the KCTU's Metal Workers' Union and Plant Construction Workers' Union as separate bargaining units.
Labor's prediction that bargaining unit separation would rarely be approved has proven wrong. With separation now approved based on umbrella organization affiliation, major corporations are expected to face negotiations with at least two subcontractor unions in addition to their in-house unions. On the same day, the Incheon Regional Labor Relations Commission also divided bargaining units by umbrella organization—FKTU affiliates, KCTU affiliates, and other unions—in a case involving Incheon International Airport Corporation and seven subcontractor unions.
