Ministry emphasizes ruling limited to industrial safety and working conditions

Hanwha Ocean's Geoje facility [Yonhap]
Hanwha Ocean's Geoje facility [Yonhap]

The Ministry of Employment and Labor said Sunday that a recent ruling by the National Labor Relations Commission recognizing Hanwha Ocean as an employer of a subcontracted cafeteria workers' union "does not conflict" with the ministry's existing interpretation guidelines on the amended Trade Union Act.

The business community had pushed back, arguing that the ruling signals an overly broad expansion of the so-called Yellow Envelope Law. The ministry rebuffed those concerns, stressing that the commission's decision was limited strictly to matters of industrial safety and working conditions.

At a press briefing Sunday marking 100 days since the amended Trade Union Act took effect, the ministry said the Hanwha Ocean case "was a determination of whether the primary contractor holds a position that substantially controls and manages industrial safety and the working environment." It added that the case "is an entirely different matter from instructions that fall within the ordinary scope of subcontract management under the interpretation guidelines."

The National Labor Relations Commission ruled in favor of the union on June 15, in a review of a case involving Hanwha Ocean and Wellive, a subcontracted cafeteria operator at the shipyard. The commission found that Hanwha Ocean holds employer status over the Wellive union and must post a public notice of the union's bargaining demand.

Business groups had argued the ruling contradicts guidelines the ministry distributed ahead of the law's implementation. Those guidelines state that a primary contractor's instruction to a factory cafeteria subcontractor to complete cooking and serving duties in time for meal hours constitutes "ordinary instruction" within the scope of a subcontract agreement — and does not amount to the "structural control over working conditions" required to establish employer status.

The ministry, however, said the key issue in this case was not instructions over cooking and serving duties but rather authority over improvements to the working environment. "The core factors were whether the primary contractor holds the authority and budget to decide on noise, odor, dust and ventilation improvements — including their timing and scope," a ministry official said. "The commission recognized employer status on that basis."

The ministry said a recent ruling that Posco has an obligation to bargain with a subcontractors' union over industrial safety issues follows the same logic. "What was considered was not simply that the primary contractor bears obligations under the Occupational Safety and Health Act, but that it holds the authority to improve major facilities and equipment and bears responsibility for controlling workplace hazards," the ministry said.

The ministry also highlighted the consistency of labor commission rulings since the law took effect. Of 18 review cases involving primary contractor employer status brought before the National Labor Relations Commission, only two — 11.1 percent — resulted in a conclusion different from the initial ruling by a regional labor commission. The ministry noted that figure is lower than the 26.1 percent reversal rate for first-instance civil court rulings.

The ministry also rebuffed concerns about so-called fragmented bargaining, in which unions successively demand negotiations with primary contractors. Of 29 cases in which labor commissions examined requests to separate bargaining units targeting primary contractors, only 12 workplaces were granted separation, and nine of those involved separation by business division. Cases in which separation was granted along federation lines — such as by the Federation of Korean Trade Unions or the Korean Confederation of Trade Unions — were limited to two.

"Even where bargaining unit separation was approved, most cases involved two units, with a maximum of three," the ministry said. "The indiscriminate fragmentation of bargaining units that had been feared since the law took effect has not materialized."


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