The implementation of the revised labor union law, known as the Yellow Envelope Law, has prompted the Labor Commission to issue rulings urging primary companies to negotiate with subcontractor unions, causing significant anxiety within the business community. Reactions suggest this outcome was anticipated following the appointment of Park Soo-geun, a labor law scholar with a pro-labor bias, under the Lee Jae-myung administration.
Park, who previously led the landmark ruling in 2021 that recognized CJ Logistics as a primary employer for its delivery drivers, has raised concerns that the obligation for large corporations to negotiate will extend beyond directly hired workers to include all partner companies, increasing what is termed 'labor risk.'
On June 16, the Ulsan Regional Labor Commission made its first ruling acknowledging the negotiation requests from ten subcontractor unions of Hyundai Motor, following the Yellow Envelope Law's enactment. This ruling affects workers involved in classification and transportation tasks, cafeteria staff, and sales representatives.
On the same day, the Central Labor Commission recognized Hanwha Ocean's primary employer status concerning the subcontractor food service union. Other major companies, including POSCO (June 17), Korea Zinc (June 19), SK Eco Plant and Hyundai Engineering (June 23), and Hyundai Steel (June 24), are also awaiting related decisions from the Central Labor Commission this month.
The broad recognition of primary employer status for non-production subcontracted workers is a critical issue. An executive from a major corporation, who requested anonymity, stated, "The negotiation risks are expanding beyond our core business into areas like facility management, security, food services, and logistics, undermining our competitiveness. The Central Labor Commission is complicating the conflict dynamics that need to be balanced."
Key domestic industries such as automotive, shipbuilding, and steel have historically improved production efficiency through a multi-tiered subcontracting structure. This system has evolved due to the volatile nature of manufacturing, rapid growth, and the strong unions demanding lifelong employment from large corporations.
The multi-tiered subcontracting structure is viewed by the business community as a necessary compromise created by the state and companies for survival in the Korean manufacturing culture. They argue that the recent radical pro-union perspective is unreasonable. Frequent disruptions caused by disputes with subcontractor unions could lead to production halts, jeopardizing delivery schedules and quality control, which could undermine the trust in 'K-manufacturing.'
There are calls for the Central Labor Commission to adopt a more realistic and cautious approach, moving away from a biased perspective. A business representative remarked, "There is widespread dissatisfaction with the rulings from both the central and regional labor commissions, which seem disconnected from the realities of the manufacturing growth structure. While Chair Park, as a labor law scholar, may pursue ideals, as a public official, he must consider job creation, the circumstances of businesses, and the broader impact on the national economy."
* This article has been translated by AI.
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