Following the implementation of the Yellow Envelope Law (amended labor union law), 40% of companies have expressed negative evaluations of the Labor Commission's rulings regarding primary contractor employer status. There are calls for clearer criteria on employer status during negotiations with subcontractor unions.
On October 14, the Korea Employers Federation (KEF) released the results of a survey conducted on 62 companies that have undergone Labor Commission rulings since the amended labor law took effect.
In the survey, 40.3% of responding companies stated that the Labor Commission's determinations on primary contractor employer status were 'not appropriate.' This figure is 12.9 percentage points higher than the 27.4% who responded that the rulings were 'appropriate.' The remaining 32.3% rated the rulings as 'average.'
Companies that provided negative evaluations identified the use of legal obligations, such as those under the Industrial Safety and Health Act, as a basis for recognizing primary contractor employer status (52%) as a major issue. Additionally, 48% of respondents indicated that employer status was recognized for matters unrelated to working conditions.
Concerns about potential conflicts during negotiations with subcontractor unions were also significant. A total of 66.1% of responding companies cited unreasonable demands from unions, including issues not recognized as employer status, as their primary concern. Furthermore, 43.5% expressed worries about demands related to wages and union activities directed at primary contractors. Other major concerns included increased costs due to multiple negotiations and prolonged negotiations (33.9%) and joint strikes among subcontractor unions (24.2%).
Companies reported feeling considerable pressure from the Labor Commission's mediation process. About 59.7% of respondents expressed concern about mediation proceeding with issues not recognized as employer status. Additionally, 48.4% pointed out the problem of mediation starting while disputes over primary contractor employer status were still ongoing.
To reduce this confusion, companies believe institutional improvements are necessary. The most urgent improvement identified was the clarification of criteria for determining primary contractor employer status (67.7%). Other suggested improvements included excluding management decision-making from labor disputes (54.8%), explicitly prohibiting workplace occupations (22.6%), and removing criminal penalties for unfair labor practices (19.4%).
Lee Dong-geun, KEF's executive vice president, emphasized, 'If management decisions regarding investment, business restructuring, and organizational changes are expanded to include labor disputes, it is expected to hinder companies' swift decision-making and investment execution. To reduce confusion in industrial sites and ensure predictability, it is essential to implement supplementary legislation and to determine primary contractor employer status fairly and strictly according to legal regulations and administrative guidelines.'
* This article has been translated by AI.
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