Investment, Workforce Redeployment and Labor-Dispute Risks Persist...Business Community Calls for Clear Legal Rules

[Financial News]"Ultimately, the definition of labor disputes under the Trade Union and Labor Relations Adjustment Act should be revised to clearly stipulate that corporate decisions, such as building new plants and redeploying employees as a result, are excluded from the scope of labor disputes," the Korea Enterprises Federation (KEF) said.Although the Ministry of Employment and Labor (MOEL) has issued implementation guidelines specifying that immediate workforce redeployment is not subject to labor-management disputes, dissatisfaction among business groups is growing. The guidelines are not strongly binding and could change depending on circumstances, leaving open the possibility that workforce redeployment essential to carrying out investments could still lead to labor disputes. In particular, delays in assigning skilled workers in advanced industries such as semiconductors could disrupt the opening of new plants and investment schedules. Business groups are therefore calling for clearer legal standards.■"Uncertainty Remains; Legal Standards Are Needed"Business groups believe that the draft implementation guidelines on the scope of labor disputes involving management performance bonuses and other matters, announced by MOEL on the 3rd, still leave open the possibility that workforce redeployment required to carry out new investments could become the subject of disputes. In advanced industries such as semiconductors and artificial intelligence, redeploying existing skilled workers is unavoidable when starting up new plants or equipment. If negotiations over reassignment are prolonged, investment schedules and the start of production could be disrupted.
A business community official said, "Large-scale investments such as those in semiconductors are difficult to carry out without a concrete workforce redeployment plan. Workforce redeployment is not a secondary task of investment; it is central to executing the investment."
Similar concerns have been raised over the construction of Samsung Electronics' Honam semiconductor plant. The National Samsung Electronics Union (NSEU) said in July that it would place matters related to the construction of the plant, including workforce redeployment, on next year's bargaining agenda. Business groups consequently argue that the guidelines alone cannot sufficiently eliminate uncertainty. Calls have also emerged for more explicit and stable legal standards, such as those set out in an enforcement decree.
In industries where competitiveness depends on megaprojects involving massive capital investment or timely business restructuring, uncertainty can become a tangible burden.
The Federation of Korean Industries (FKI) said, "We hope the guidelines will continue to be supplemented so that confusion in the field is minimized during their application. We also expect more explicit and stable legal standards, including an enforcement decree, to be established promptly."
Amid the unsettled supplementary measures, observers warn that if a conflict over the assignment of skilled workers arises separately from the construction of a new plant itself, the date for normal plant operations could be delayed. In the semiconductor industry, for example, deploying skilled engineers from existing facilities is essential during the initial phase of starting a new production line to stabilize processes and improve yields.■Performance-Bonus Rules Also Need Improvement; No Specific StandardsBusiness groups also maintain that the standards governing management performance bonuses require further improvement.
Although MOEL excluded management performance bonuses linked to corporate profits from mandatory bargaining subjects, business groups are concerned that if bargaining subjects are distinguished solely by whether they are tied to profits, unions could change the form of their demands—for example, by seeking a fixed amount—and make excessive performance bonuses a bargaining issue.
Under MOEL's guidelines, for example, if a union demands a management performance bonus of 700 million won regardless of corporate profits, the demand would have to be treated as a bargaining issue, critics say. Ultimately, the guidelines have been criticized for providing unions with a workaround through which they can change only the basis or wording of their demands and claim that they are subject to bargaining.
As long as they avoid linking the demand to corporate profits, unions could seek excessive bonuses in other forms, such as requesting a fixed amount. If management refuses to accept the demand, it could lead to industrial action. The KEF pointed out, "More specific criteria are needed to determine in which cases management performance bonuses constitute wages or other working conditions."
[email protected] Ji-yeon Park, So-hyun Park, Dong-chan Kim Reporter