Hyundai Motor (005380.KS) must engage in direct bargaining with in-house subcontracted cafeteria workers and security and guard personnel, but has no duty to bargain with salespeople (car masters) belonging to sales dealerships, a labor commission has ruled.
This case draws attention from the industry because it offers a concrete gauge of the scope of subcontractor unions over which a prime contractor bears "employer status," and of the bargaining agenda, following the implementation of the so-called "Yellow Envelope Law."
According to labor circles on the 15th, the Ulsan Regional Labor Relations Commission recently delivered to both labor and management a decision upholding a "request for correction of the notice of bargaining demand" filed by the Korean Metal Workers' Union against Hyundai Motor.
According to the decision, the Ulsan commission determined employer status based on core criteria such as whether Hyundai Motor, the prime contractor, exercises "actual control" over the work of subcontracted workers, and whether that work belongs to the prime contractor's "essential business system."
As a result, in-house subcontracted workers at the Ulsan, Jeonju, and Asan plants were recognized as covered by employer status, despite belonging to partner companies. The basis was that they work at workspaces, key facilities, and conveyor belts owned by Hyundai Motor, the prime contractor, and cannot arbitrarily change their working environment without the prime contractor's approval. In addition, cafeteria workers and plant security and guard personnel belonging to outsourcing firms also work at Hyundai Motor-owned facilities and are directly subject to the hygiene standards and security systems set by the prime contractor, so the commission ruled that Hyundai Motor has a duty to bargain with them.
By contrast, salespeople belonging to sales dealerships were excluded from bargaining. The commission held that Hyundai Motor's actual control does not reach them, citing that the dealerships, as separate and independent businesses, operate their own premises and independently carry out recruitment, personnel management, and compensation.
Notably, while the commission recognized Hyundai Motor's duty to bargain with in-house subcontracted workers, it drew a line by stating that not all agenda items demanded by the union need to be placed on the bargaining table.
The commission stated, "The mere fact that the prime contractor's production plans or facilities and equipment have a certain effect on working conditions does not mean that the prime contractor holds actual control over the remaining production-sector bargaining agenda, apart from the provision of infirmaries and rest areas." In effect, it ruled that "wages" and other core union demands are not agenda items for direct bargaining with the prime contractor.
Meanwhile, both Hyundai Motor and the Metal Workers' Union plan to closely review the Ulsan commission's decision before deciding whether to request a review by the National Labor Relations Commission.
