A South Korean court has rejected Hanwha Ocean's request to suspend the enforcement of a ruling related to the so-called "Yellow Envelope Law". The court determined that the company is not obligated to accept all demands or enter into a collective agreement simply because it is required to negotiate with subcontractor labor unions.
As a result, the ruling that requires the inclusion of the labor union branch from subcontractor Wellive in the announcement of the negotiating labor union remains in effect.
According to the Central Labor Commission, the 13th Division of the Seoul Administrative Court dismissed Hanwha Ocean's request for a suspension of the enforcement of the ruling regarding the announcement of the negotiating labor union on October 1.
The case began when the National Metal Workers' Union demanded collective bargaining from Hanwha Ocean on March 10. The union included the Wellive branch, which represents workers in catering and meal services, in its request for negotiations, but Hanwha Ocean excluded this branch from its announcement.
The Gyeongnam Regional Labor Commission ruled in April that Hanwha Ocean must rectify this exclusion. In June, the Central Labor Commission determined that Hanwha Ocean had the authority to make substantial decisions regarding the improvement of aging facilities and equipment, such as kitchens, laundry rooms, and shuttle buses, which were proposed by the Wellive branch as negotiation topics. Therefore, the commission stated that Hanwha Ocean must include the Wellive branch in its announcement.
Hanwha Ocean filed a lawsuit seeking to annul the commission's ruling and requested a suspension of its enforcement. The company argued that refusing to negotiate could lead to criminal penalties for unfair labor practices, effectively forcing negotiations and agreements. They also claimed that if working conditions changed due to a collective agreement, it would be difficult to restore the previous state even if they won the lawsuit, and that there would be costs associated with negotiations and losses from labor disputes.
The court did not accept these arguments as valid grounds for suspension. It found that Hanwha Ocean did not sufficiently demonstrate a risk of irreparable harm or an urgent need to suspend the ruling's enforcement.
The key issue was the distinction between the obligation to negotiate and the obligation to agree. The court ruled that while employers have a duty to engage in collective bargaining, they are not required to accept all demands or enter into a collective agreement. It concluded that changes in working conditions resulting from the enforcement of the ruling could not be considered damages arising from the ruling's enforcement.
Even if a collective agreement is reached during the ongoing lawsuit and Hanwha Ocean's employer status is not recognized, the court stated it cannot be definitively concluded that the agreement could not be annulled based on the scope of the agreement. The court also noted that any benefits already provided could be resolved by adjusting the subcontract with Wellive.
Regarding the concern of criminal penalties for refusing to negotiate, the court indicated that if there is no obligation to negotiate on the issues raised, then there would be justifiable reasons for refusing negotiations. It explained that the potential for unfair labor practices or criminal penalties is not legally related to the enforcement of the ruling, making it difficult to view them as damages that could be prevented by suspending enforcement.
The possibility of losses due to labor disputes also did not change the court's reasoning. The court determined that suspending the enforcement of the ruling would not affect the previously issued decision by the Gyeongnam Regional Labor Commission, and the labor union could still engage in labor disputes depending on the progress of negotiations. The increase in negotiation and labor management costs, as well as economic losses, were also not seen as damages that would be impossible to compensate financially or that would be significantly difficult to endure according to social norms.
This decision marks the first instance in which a court has ruled on the suspension of enforcement regarding the announcement of the negotiating labor union since the revised Labor Union Act came into effect. However, it does not definitively establish Hanwha Ocean's employer status. The legality of the ruling and the employer status regarding the negotiation topics will be determined in the ongoing lawsuit.
* This article has been translated by AI.
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