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The core of the enforcement decree revision for the “Yellow Envelope Regulation” (amendments to Articles 2 and three of the Commerce Union Act) introduced by the Ministry of Employment and Labor on Nov. 24 is that if firms (authentic contractors) and subcontractor unions fail to succeed in an settlement on joint negotiations, the Nationwide Labor Relations Fee could have the authority to designate which subcontractor unions can negotiate with administration.
The Yellow Envelope Regulation, which can be carried out in March subsequent yr, is centered on enabling direct negotiations between authentic contractors and subcontractor unions. The federal government’s plan is to permit subcontractor unions with “widespread denominators” to be grouped collectively for joint negotiations, provided that the variety of entities firms should negotiate with has elevated exponentially.
The issue is that the factors for the labor relations fee to unify subcontractor union negotiation channels are excessively arbitrary. Giant firms with hundreds of associate firms as subcontractors categorical that it’s unclear what standards can be used to group unions. If negotiation models improve, negotiations are prone to be delayed and conflicts with unions might intensify.
For example, Hyundai Motor Firm, the nation’s largest completed automobile producer, has roughly 8,500 inner and exterior associate firms, whereas HD Hyundai, a number one shipbuilding firm, has 3,900. The development business additionally has a posh authentic contractor-subcontractor construction. The fundamental “three-tier construction” entails basic contractors profitable whole tasks and subcontracting to specialised building firms by sector similar to civil engineering, structure, and electrical work, with dozens to tons of of associate firms usually collaborating per web site.
The shipbuilding and metal industries have been additionally hit arduous. In response to statistical evaluation by the Ministry of Employment and Labor, subcontractor staff (non-company staff) in manufacturing this yr totaled 317,000. The shipbuilding business had the best proportion of in-house subcontracting at 63%, adopted by building (44.3%), metal (35.6%), digital parts and computer systems (16%), and cars (10.2%). Beginning in March subsequent yr, unions at these firms are extremely prone to demand direct negotiations citing the substantial management of authentic contractors and go on strike if negotiations are refused. It is because the enforcement decree contains provisions requiring authentic contractors to proceed with negotiation procedures when the labor relations fee acknowledges their substantial management over particular working situations.
A company official stated, “Even when negotiating with authentic contractor unions which have consultant bargaining rights, circumstances usually prolong past the yr,” including, “Regardless of how a lot negotiation models are unified, if negotiation models improve to dozens or tons of, negotiating all yr wouldn’t be sufficient.”
An official from the Korea Development Trade Analysis Institute expressed concern, saying, “With poor building market situations, growing safety-related prices, and the worst-case situation for labor-related negotiations, we are going to face a ‘triple burden.’”
There are additionally vital uncomfortable side effects from authentic contractors negotiating with tons of or hundreds of subcontractor firms. They enter negotiations with out information of subcontractor firms’ administration efficiency or background, seemingly growing monetary burdens and litigation dangers.
There’s additionally a powerful chance of administration confusion arising from “labor-labor conflicts” inside authentic contractor unions. At present, workplaces with a number of unions designate one consultant for negotiations with administration. Enterprise circles consider disputes might come up when authentic contractor unions with out negotiating rights demand negotiating rights like subcontractor unions.
An official from the Korea Employers Federation identified, “Whereas the federal government has introduced it would pursue unification of negotiation channels primarily based on authentic contractor workplaces for negotiations between authentic contractors and subcontractor unions, it has not individually made enforcement decree revisions to make clear this,” including, “Authorized disputes will proceed sooner or later.”
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