Hyundai Mobis subcontractor union skips employer-status ruling, moves straight to strike authorization

Hyundai Mobis subcontractor union files for labor dispute mediation

Hanwha Ocean and others sought employer-status ruling first

'Speed strategy to secure strike rights puts greater burden on companies'

Hyundai Motor case at National Labor Relations Commission to span three hearings

Members of the Hyundai Mobis subcontractor union hold a head-shaving ceremony in front of the company's headquarters in Gangnam-gu, Seoul, in May. [Korean Metal Workers' Union]

Since the so-called Yellow Envelope Act — amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act — took effect, demands by subcontractor unions to bargain directly with parent companies have surged. Attention is now turning to the broader implications for business and labor after a subcontractor union moved to secure strike rights without first obtaining a ruling on the parent company's employer status from a labor commission.

The move departs from the usual sequence, in which a union first wins recognition of the parent company's employer status before proceeding to collective bargaining or industrial action. By skipping that step and filing directly for dispute mediation, the union has prompted concern in some quarters that confusion over the Yellow Envelope Act's implementation will only deepen.

Hyundai Mobis subcontractor union files for mediation Wednesday, strike vote underway

An exterior view of the Hyundai Mobis research center in Uiwang. [Hyundai Mobis]

According to business and labor sources Friday, the Hyundai Mobis subcontractor union has begun the process of securing strike rights against Hyundai Mobis, the parent company. The union encompasses 7,375 members from 25 chapters across 12 regional branches of the Korean Metal Workers' Union, including workers at Hyundai Mobis subsidiaries Motras and Unitus.

The union filed for labor dispute mediation with the National Labor Relations Commission on Wednesday and is conducting a member ratification vote from Wednesday through Friday, Aug. 21. If a majority of members vote in favor and the commission issues a decision to suspend mediation, the union will be legally entitled to strike.

It has been confirmed that the Hyundai Mobis subcontractor union did not seek a separate employer-status ruling from a labor commission before taking this step. Since the Yellow Envelope Act took effect, subcontractor unions have typically first filed either a petition to correct a failure to post notice of bargaining demands or an application for separation of the bargaining unit with a regional labor commission — securing recognition of the parent company's employer status — before moving on to bargaining or industrial action.

Workers on the morning shift leave early from the Myeongchon gate of Hyundai Motor's Ulsan factory in Buk-gu, Ulsan, on Wednesday, as a four-hour partial strike cuts short their workday. [Yonhap]

The Hanwha Ocean subcontractor union, which was the first to secure strike rights under the new law, followed the conventional path of obtaining an employer-status ruling before proceeding. In the steel industry, where disputes over subcontracting arrangements — including illegal dispatch lawsuits — have persisted, parent companies and subcontractor unions have moved to the bargaining table after securing strike rights.

The Hyundai Mobis subcontractor union, by contrast, bypassed that process entirely and went straight to securing strike rights. A union official said the amendments to Articles 2 and 3 of the Trade Union Act were premised on the assumption that parent companies already hold employer status. "Given that Hyundai Mobis recently participated in consultations as the de facto decision-maker in the sale of the lamp business division of a subsidiary, we interpret that as the company having acknowledged its own employer status," the official said.

Some analysts say the union is using a speed strategy to ratchet up pressure on the parent company. Rather than losing time to a regional labor commission ruling, a potential appeal and a review by the National Labor Relations Commission, the union appears to be pursuing a path that resolves the employer-status question and secures strike rights simultaneously through the dispute mediation process.

A labor attorney said there is no provision under the amended Trade Union Act requiring that employer status be determined exclusively through a correction petition or a bargaining-unit separation application. "However, unions have generally found it advantageous to obtain an employer-status ruling first and then file for mediation if the parent company refuses to bargain — which is why they have followed that sequence," the attorney said.

The attorney added that the Hyundai Mobis subcontractor union appeared to be pursuing a strategy of quickly securing strike rights to escalate its campaign. "Since the employer-status determination and the strike authorization will now be decided at the same time, the burden on the company is expected to grow considerably," the attorney said.

Hyundai Motor employer-status case at National Labor Relations Commission drags on — rulings to be issued by job category

Members of the Korean Metal Workers' Union under the Korean Confederation of Trade Unions attend a review hearing Monday afternoon at the National Labor Relations Commission inside Government Complex Sejong, on a petition to correct the posting of bargaining demand notices involving Hyundai Motor and its subcontractors. [Newsis]

The employer-status determination process is also continuing for Hyundai Motor, one of the most prominent workplaces with an indirect employment structure. Because a ruling on Hyundai Motor could affect the broader manufacturing sector, the National Labor Relations Commission plans to hold three separate hearings divided by job category. That departs from the usual practice of issuing an employer-status ruling after a single hearing, and signals that the commission is treating the case with exceptional care.

The commission held a hearing Friday on the sales division in connection with the subcontractor union's petition for review of the Hyundai Motor bargaining demand notice correction case, and plans to hold a separate hearing on the production and general affairs divisions on Thursday, Aug. 20. The first hearing was held Monday. The commission intends to divide the 10 subcontractor chapters that applied for direct bargaining with Hyundai Motor into three units — production, sales and general affairs — and issue separate rulings for each.

Some observers note that the Ulsan Regional Labor Commission conducted three rounds of hearings lasting four to six hours each, and expect the National Labor Relations Commission, which is handling the review, will similarly be unable to rush its decision.

Earlier, the Ulsan Regional Labor Commission had differentiated its employer-status findings by job category and limited the scope of issues that could be addressed in bargaining. It found that Hyundai Motor had an obligation to bargain with in-house subcontract workers at the Ulsan, Jeonju and Asan factories, as well as cafeteria workers and factory security and guard personnel employed by outside contractors. However, it did not recognize employer status with respect to car masters — sales representatives employed by dealerships.

A business community official said the Ulsan Regional Labor Commission had already conducted an unusually lengthy process — three rounds of hearings, each running for hours. "It will be difficult for the National Labor Relations Commission to quickly overturn or uphold a ruling that was reached after such deliberation," the official said.

Another attorney said the current statutory deadline of 20 days for processing such cases was realistically insufficient for making individual employer-status determinations. "The National Labor Relations Commission also appears to be extending its hearings in order to demonstrate that it has approached the matter with due care," the attorney said.

eyre@heraldcorp.com