Businesses Fear Changes in Bargaining Tactics Following 'Yellow Envelope Act' Implementation

'Concerns that corporate labor union negotiation methods could change with the implementation of the 'Yellow Envelope Act' are materializing. Just over a month after its enforcement, POSCO's subcontracted firm unions gained recognition for separate negotiations, leading businesses to worry about the spread of 'fragmented bargaining,' a scenario requiring individual negotiations with multiple unions.

In April, the Gyeongbuk Regional Labor Relations Commission accepted the applications for separate bargaining units from POSCO's subcontracted unions. This marks the first such decision for a private large corporation since the 'Yellow Envelope Act' took effect, with the commission establishing a standard that bargaining units can be divided if affiliated with different labor federations. Consequently, POSCO is now required to conduct separate negotiations with three subcontracted unions in addition to the main contractor's union, totaling four unions it must engage with annually. This case at POSCO raises concerns that 'fragmented bargaining' based on different labor federations could follow.

Businesses are experiencing confusion as they respond to subcontracted unions' negotiation demands, finding it difficult to predict when and with which units negotiations will be requested. Although the government has provided guidelines on negotiation agendas, confusion persists on the ground as demands beyond these guidelines are being added. Companies face significant concerns that costs and risks could multiply if the number of negotiating partners rapidly increases.

According to the Korea Labor Institute, the average negotiation period between the Korea Federation of Trade Unions' Metal Workers' Federation and the Korean Confederation of Trade Unions' Metal Workers' Union has been 123 days over the past 19 years. If negotiations fail, strikes could also increase, leading to concerns that the increased bargaining burden on businesses could weaken industrial competitiveness. Park Ji-soon, a professor at Korea University School of Law, analyzed that there is a possibility of time being wasted throughout the year solely on negotiations. He added that not only negotiation costs but also risks such as production suspensions or failure to meet delivery deadlines due to negotiation breakdowns are fully foreseeable. There are predictions that companies seeking to avoid these risks might, in the long run, consider AI replacement for subcontracted tasks or offshore transfers, potentially reducing domestic employment.

The situation is further complicated by inconsistent rulings from labor commissions, as requests for separate bargaining units were rejected at some sites like SK Energy and S-Oil. With the new issue of 'bargaining unit separation' added to existing conflicts surrounding the status of subcontracted workers, the confusion in industrial fields is expected to continue for some time.