Introduction
Likely increase in union membership
Multiple unions, one bargaining channel
No consensus: majority union appointed
No majority: representation by committee
Challenging an appointment
Preparation is key
There is a change coming that will dramatically affect employer-employee relations in Korea. From July 2011, under an amendment to the Labour Union and Labour Relations Adjustment Act, multiple unions will be able to coexist within the same company. At present, this is possible only in special situations, such as where unions represent different types of employee (ie, blue-collar and white-collar unions). In Korea, unions are generally formed on an individual company basis, rather than for a given industry or region.
This change has been many years in the making. The act was first amended to allow for multiple unions in 1997. However, the legislature has postponed the implementation of this amendment out of concerns that it may cause intense competition among unions and make collective bargaining difficult for employers. These concerns have unfortunately not gone away, despite the imminent start of the multiple-union era. Perhaps as a result of these perceived problems, in a 2010 survey conducted by the Korea Chamber of Commerce and Industry, 71% of the 300 surveyed firms objected to the implementation of the multiple-union system.
Likely increase in union membership
Union membership in Korea's workforce stands at about 10%. In the late 1980s, during the height of labour unrest in the country, this number was over 20%. For several reasons the implementation of the multiple-union system is likely to increase union membership.
Large national unions, such as the Federation of Korean Trade Unions, the Korean Confederation of Trade Unions and the New Hope Labour Solidarity Union, see the new law as an opportunity to expand into companies where they are not active. In addition, the act imposes few barriers to the formation of new unions - only two people and a few simple formalities are required. Furthermore, although unions may refuse membership to an employee who belongs to a different union, in principle employees may join multiple unions.
Multiple unions, one bargaining channel
Although the amendment will allow multiple unions to coexist in a single company, the power to bargain collectively with management will normally rest with a single representative union. The unions in each company will be given the opportunity to select the representative union. The selection process begins with a request to management for collective bargaining. A union can make this request at any time during the three-month period preceding the end of the term of the applicable collective bargaining agreement. A company may refuse requests for collective bargaining before that point.
Once a company receives a request for collective bargaining, it must announce the name of the union that has made the request, as well as other pertinent information about the union. This announcement will alert the other unions, so that they can join the representative union selection process. Seven days from the date of the announcement, the company must issue a second announcement that includes information about all of the unions that wish to participate in the representative union selection process. Once the final group of participating unions has been determined, the unions will have 14 days to select the representative union. All unions that choose not to participate in the selection process will be blocked from participating in collective bargaining with management and from conducting labour actions to protest against the results of collective bargaining.
The term of a representative union will start on the day on which the union is appointed. If the term of the collective bargaining agreement is two years, the representative union will continue to serve until the end of the two-year term. If the term of the agreement is less than two years, the representative union will serve until two years have passed from the effective date of the agreement.
No consensus: majority union appointed
If the unions fail to agree on a representative union, the union representing the relative majority of the participating unions' members will be appointed automatically. Membership is determined by counting the number of dues-paying union members on the day of the second announcement mentioned above. Many consider determining membership in this manner to be problematic because dues alone may not accurately indicate which union an employee prefers to represent his or her interests. An employee will be counted as a dues-paying union member even if he or she has paid only a nominal amount of dues, has not paid dues for some time or has had his or her dues subsidised by the employer.
If an employee pays dues to multiple unions, each union receiving dues from him or her will share credit, divided equally, for the employee. If an employee is a member of multiple unions, but does not pay dues to any of them, all unions to which the employee belongs will share credit for the employee.
No majority: representation by committee
If the unions cannot agree on a representative union after 14 days from the date of the second announcement, and if no union represents a relative majority of the members from among the participating unions, the unions must form a representative committee to engage in collective bargaining. Only representatives from unions that represent 10% or more of the total number of employees may participate.
Critics believe that this practice will result in an untenable situation in which no effective bargaining channel emerges. They reason that unions which cannot decide on a representative and have relatively equal membership numbers may be unable to cooperate during challenging negotiations with management.
Unions can appeal the appointment of a representative union, first to the Local Labour Commission and then to the National Labour Commission. They can also challenge the appointment by filing an administrative suit under the act. However, once appointed, a representative union has the authority to act on behalf of all unions that participated in the representative union selection process (and their members) until the appointment has been revoked. Thus, even a union that is appointed unduly may enter into negotiations and agreements, although the effect of such agreements under Korean law remains to be seen.
Granting unions the right to organise freely in the workplace is compatible with global standards and the recommendations of the International Labour Organisation to the government. However, as envisioned, a multiple-union system may lead to significant problems, such as inter-union dispute, that disrupt operations. Furthermore, the process for selecting a representative union seems too complex.
Nonetheless, companies operating in Korea must face the reality of this new era. Companies can take steps to reduce costs relating to labour relations, to limit the likelihood of disputes between unions and to avoid other related problems. If a company is caught unprepared, future collective bargaining may have a considerable negative effect on labour relations. Therefore, in particular, companies with large numbers of employees in Korea are recommended to take immediate steps to prepare for July 2011.
For further information on this topic please contact Hee-Chul Kang at Yulchon by telephone (+82 2 528 5200), fax (+82 2 528 5300) or email ([email protected]).