The Korea Enterprises Federation said Monday that labor unions cannot make profit-sharing tied to operating profit — or the construction of new semiconductor factories in the Honam region — a subject of collective bargaining.
The statement amounts to a clear rejection of the legitimacy of a recent push by the Samsung Electronics branch of a cross-company union, which has opposed the government's Honam semiconductor mega-project and called for tripartite labor-management-government consultations on the matter.
The federation released a policy paper titled "Business community recommendations on recent labor issues" on Monday.
As demands for so-called "N percent of operating profit" bonus schemes spread rapidly through the labor movement, the federation said profit-sharing linked to operating profit "does not constitute a matter relating to working conditions, nor does it fall under reassignment resulting from layoffs or restructuring that would bring about a substantive and specific change in working conditions."
"The Labor Standards Act does not define performance bonuses as a working condition, and the Supreme Court has also denied their wage character on the grounds that they bear no close relation to working conditions and are closer to an after-the-fact distribution of business results," the federation said. "They do not fall under welfare benefits such as meal or transportation allowances, nor under other treatment categories such as holidays or disciplinary matters."
The federation also said the Trade Union Act's definition of labor disputes should be revised to exclude high-level management decisions such as profit distribution from the scope of labor disputes, and that the Ministry of Employment and Labor should clarify through enforcement decrees and regulations that operating-profit-linked bonuses are not subject to collective bargaining.
The federation also voiced opposition to union efforts to bring the planned semiconductor factory in the South Jeolla-Gwangju integrated special city — being pursued under the government's Honam semiconductor mega-project — to the collective bargaining table.
Citing Supreme Court precedent and Ministry of Employment and Labor interpretive guidelines, the federation said "matters falling under high-level management decisions by the business operator, such as the establishment of new factories, cannot be made subject to collective bargaining."
"The Ministry of Employment and Labor provides judgment criteria through interpretive guidelines, but these carry no legal binding force, and conflicts on the ground continue," the federation said, adding that the principle that high-level management decisions such as building new factories are not subject to collective bargaining should be codified through enforcement decrees and regulations.
The federation also called for labor flexibility measures to be incorporated into a proposed special law for mega-special zones, saying such steps are needed to secure the global competitiveness of national strategic industries.
The federation noted that competitor countries including the United States, Japan and China have relaxed regulations on working hours and employment types to guarantee broad autonomy in workforce management, while South Korea remains bound by a rigid labor law framework designed for the manufacturing era half a century ago.
Specifically, the federation recommended that the special law include expanded management units for overtime, introduction of a white-collar exemption regime, expansion of flexible and selective working-hour systems, extended permitted use periods for fixed-term workers, and an expanded scope of eligible work for dispatched workers.
Lee Dong-geun, the federation's standing vice chairman, said the competition for technological supremacy in the era of AI and semiconductor transformation "is ultimately a battle over how quickly and flexibly talent can be deployed," adding that "high-level management decisions such as profit-sharing and factory construction must not become subjects of labor-management conflict, and labor flexibility must underpin the mega-special zones if they are to serve as a starting point for nurturing national strategic industries."
joze@heraldcorp.com
