**Ministry of Labor Announces Negotiation Procedure Manual**
**Concerns Over Expansion of Negotiation Subjects Beyond Employer Conditions**
**Ambiguous Scope of Announcement… Unavoidable Confusion and Disputes in the Field**
[Herald Business = Reporter Jung Kyung-soo] As the government released a “Win-win Negotiation Procedure Manual” in relation to the so-called “Yellow Envelope Act” (amended Trade Union Act) going into effect on the 10th of next month, the Korea Employers Federation (KEF) raised concerns about the scope of employer liability and the setting of negotiation agendas.
On the 27th, the Ministry of Employment and Labor and the Central Labor Relations Commission clarified through the manual that if a prime contractor is recognized as an employer under the amended trade union law, they must conduct collective bargaining with the subcontractor’s union, and that negotiation channels for the prime contractor and subcontractor unions are generally separated. As a result, the prime contractor is required to negotiate with at least two unions.
The KEF stated, “The critical issue in negotiations between prime contractors and subcontractor unions is whether the negotiation agenda pertains to conditions where employer status is acknowledged,” adding, “This is not a subject for mandatory negotiation or to be broadly determined by labor and management autonomy.”
The KEF emphasized, “When a prime contractor negotiates and concludes a collective agreement with a subcontractor union on working conditions where the employer status is not recognized, it infringes upon the management rights of the subcontractor companies,” stressing that “it must be clear that the prime contractor is not a negotiating party for agendas whose employer status is not recognized as proposed by the subcontractor union.”
Previously, the Ministry of Labor indicated in the manual that in addition to working conditions recognized by the labor commission, other issues could also be set as negotiation agendas subject to labor-management agreement, and if not agreed upon, the duty to negotiate would be determined through unfair labor practice relief procedures. However, the KEF views that this approach may effectively expand the scope of negotiation.
Regarding the obligation to announce negotiation requests, the KEF pointed out practical difficulties. The manual stipulates that the prime contractor should announce the negotiation request in a manner that all subcontractor unions and workers, where the employer status is recognized or potentially recognized, are aware, and that for offsite subcontractors, a broad announcement is necessary.
The KEF expressed concern, stating, “The range of subcontractor unions and workers ‘potentially recognized as employers’ is ambiguous,” and “in workplaces with many subcontractors and geographically dispersed operations, the method of announcement is not practically feasible.” They added, “There is a high possibility of ongoing disputes concerning the execution of announcements.”
The Yellow Envelope Act fundamentally stipulates that a prime contractor is considered an employer and is therefore obligated to negotiate when it substantively and specifically controls and determines the working conditions of subcontractor workers. The Ministry of Labor expects through this to bridge the gap between prime contractors and subcontractors and to promote negotiations within the institutional framework.
Conversely, management circles are concerned that, if criteria for determining employer status and negotiation scope are not clearly established, the legal responsibility and negotiation burden on the prime contractor could be excessively expanded. Especially with a structure where negotiation channels increase to at least two or more, issues like increased negotiation costs and administrative burdens, as well as the controversy over the infringement of subcontractor management rights, are expected to emerge as major future issues.