FKI Urges Exclusion of High-Level Management Decisions from Labor Disputes and Deregulation for Mega Special Zones

The business community urged deregulation on the 17th, asserting that "core corporate decisions, such as building factories or distributing profits, must be excluded from the scope of strike bans." In a report released the same day, the Federation of Korean Industries (FKI) argued that critical decisions determining a company’s fate should not be subject to labor-management consultations and that relaxing labor regulations within "Mega Special Zones" is also necessary. The FKI urged the government to amend the definition of labor disputes under the Trade Union Act to exclude high-level management decisions, such as profit distribution, from the scope of labor disputes, and to clarify through enforcement decrees and rules that such matters are not subject to collective bargaining. The FKI stated that establishing semiconductor plants and other high-level management decisions cannot be subject to collective bargaining.

The FKI also cited cases from major countries. It noted that it is rare for labor and management to agree to fixed payment of a certain percentage of operating income as performance pay. In the U.S., performance pay is distributed differentially based on individual performance, and big tech companies have compensation committees under their boards of directors decide on payments. France operates a legal profit-sharing system that sets legal limits on individual payment amounts. The FKI expressed concern that if demands for operating-income-linked performance bonuses spread across the industry, investment and R&D could shrink, and labor-management conflicts could intensify.

Amid competing nations like the U.S., Japan, and China making working hours and employment forms more flexible, there are calls to create a flexible workforce environment for domestic companies as well. Specifically, the FKI proposed amending the Special Act on Mega Special Zones to expand the unit for managing overtime work from the current one week to monthly, quarterly, semi-annual, or annual units. It also suggested introducing a "white-collar exemption" to exclude R&D personnel, professionals, and startup core talent from working hour regulations. It stated that the expansion of flexible and selective working hour systems, the extension of the maximum period for using fixed-term workers (currently two years), and the expansion of eligible tasks for dispatched workers should also be reflected.

Lee Dong-geun, standing vice chairman of the FKI, stated, "The competition for technological hegemony in the era of AI and semiconductor transformation is ultimately a battle over how quickly and flexibly we can deploy talent." He added, "High-level management decisions such as profit-sharing and factory construction should not become subjects of labor-management conflict, and for the Mega Special Zones to serve as a starting point for fostering national strategic industries, labor flexibility must be supported."