Requests to split bargaining units surge to 161 in three months since Yellow Envelope Law took effect

It has been nearly three months since the Yellow Envelope Law — the revised Articles 2 and 3 of the Trade Union Act — took effect.

Amid the rollout, applications to split bargaining units have surged compared with the law's early days. With labor commissions continuing to approve union demands broadly, business groups warn that the risk of fragmented, year-round bargaining is becoming a reality.

According to data submitted to the National Assembly by the National Labor Relations Commission, a total of 161 applications to split bargaining units have been filed since the Yellow Envelope Law took effect.

A bargaining unit split allows workers to form separate unions and bargain individually with a company when employment conditions differ among employee groups. The surge in applications follows the law's enforcement decree, which in effect gutted the single bargaining channel system.

Applications were slow at first. Just two days after the law took effect, only 39 had been filed — a figure that has since grown nearly fourfold.

In the early days, subcontractor unions focused more on demanding direct bargaining with parent companies, with 453 such demands recorded at the time. They now appear to have strategically shifted toward pursuing bargaining unit splits instead.

"It looks like unions took time to internally debate whether splitting bargaining units would be advantageous, and applications only picked up in earnest afterward," a labor sector official said.

Labor authorities appear inclined to approve split applications broadly. Regional labor commissions have so far ruled on 35 cases. Of those, 17 were approved and 18 were rejected.

Among private companies, approved splits include those filed by subcontractor unions at POSCO, a construction union, call-center subcontractor unions at KB Kookmin Bank, Hana Bank and KB Kookmin Card, a production workers' union at Donghee Auto — a parts supplier to Kia — and a subcontractor union at Hyundai Steel.

Rejected applications were mostly from construction unions. Construction unions at SK Corp's energy unit, S-Oil, Korea Zinc, Hanwha, GS Engineering & Construction and Samsung C&T all had their split requests denied.

"Most construction union members are crane operators," a legal sector official said. "Given the nature of crane work, where conditions can be adjusted on site, labor commissions appear to have concluded that companies do not exercise substantial control." Some observers expect the approval count to rise once the remaining construction union cases are resolved.

Legal experts say the criteria for splitting bargaining units under the revised law are vague and loosely defined. The amended law sets out three grounds for a split application: the unions have differing interests; one union cannot adequately represent another; or keeping the unions within a single bargaining unit could generate conflict between unions or between labor and management.

The third criterion has drawn the most criticism. Legal experts say the "possibility of conflict" standard is too abstract and prone to abuse. "We are already seeing cases where unions affiliated with the FKTU and the KCTU — even within the same job category — file for a bargaining unit split simply to negotiate separately," said Lee Gwang-seon, an attorney at law firm Yulchon.

Business groups warn that bargaining unit splits could create conditions for near-constant strikes. At POSCO, split applications by a subcontractor union affiliated with the Korean Metal Workers' Union under the KCTU and by subcontract workers belonging to the National Plant Construction Union have both been approved. Combined with the existing subcontractor union and POSCO's own in-house union, the company now faces annual bargaining with four separate unions.

"With the expanded scope of legally protected strikes under the revised labor law, companies now have to plan for the possibility of strikes breaking out at any point during the year," a business community official said.