New decree reshapes how unions negotiate with parent companies by March
A new government decree is set to alter how subcontractor unions engage in collective bargaining with parent companies. Starting next March, subcontracted workers will have the right to demand direct collective bargaining. The move has sparked concerns among employers about rising costs and potential conflicts.
The draft enforcement decree amends the Trade Union and Labor Relations Adjustment Act. It expands separate bargaining rights for subcontractor unions, a shift from the previous system where separate bargaining was rare and tightly controlled. The single bargaining channel system had long been used to reduce labor-management disputes.
The new rules introduce strict criteria for approving separate bargaining units. These include clear jurisdictional boundaries, transparency, effective representation, and conflict prevention mechanisms. A key part of the reform is the 'Yellow Envelope Letter' regulation, designed to improve communication and standardise negotiation procedures.
If direct talks between parent firms and subcontractor unions break down, regional labour commissions will step in. They will decide whether to consolidate or split bargaining units based on working conditions, employment types, and existing bargaining practices. The decree also allows subcontractor unions to push for separate bargaining more easily by considering job type, worker interests, and union characteristics.
Businesses are already preparing for the changes. Hyundai Motor, for example, could face separate bargaining requests from over 5,000 partner-company unions. Employers warn that weakening the unified bargaining system will increase their workload, forcing year-round negotiations with multiple unions. This could lead to higher staffing needs, more time spent in talks, and greater financial strain.
Labor groups, meanwhile, are pushing to abolish the single bargaining channel system entirely. They argue that separate bargaining rights will give subcontracted workers more power. However, companies fear that inter-union conflicts could escalate, potentially harming their competitiveness.
The government insists that strict criteria will prevent disorder in labor-management relations. But the shift will likely bring major changes to how companies handle negotiations. With the new rules taking effect in March, both unions and employers are bracing for a more complex bargaining landscape.
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