YOON&YANG

On November 24, 2025, the Ministry of Employment and Labor (“MOEL”) issued a legislative notice regarding the proposed amendment to the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act (“Amended Enforcement Decree”).  Companies are advised to review the proposed changes carefully and take appropriate preparatory measures prior to the effective date.

Yoon & Yang’s Employment & Labor Practice Group has selected and organized key questions that companies may have regarding this legislative notice in the form of the following Q&A.

Q1. On what basis does the “single bargaining channel” rule apply when a principal company and subcontractor’s union engage in collective bargaining?

A1. If the principal company is recognized as the “employer” (user company), the single bargaining channel rule applies, in principle, to the principal company’s entire “business or workplace.” In other words, as a general rule, the principal company’s union and the subcontractor’s union are treated as belonging to a single bargaining unit.

Q2. Is it mandatory to go through the single bargaining channel procedure to engage in collective bargaining?

A2. In principle, the principal company and the subcontractor’s union must go through the single bargaining channel procedure.

However, the MOEL has expressed its policy of respecting voluntary negotiations between labor and management. This means that if the principal company and the subcontractor’s union agree to conduct voluntary negotiations or joint bargaining, they may proceed without appointing a representative bargaining union and may negotiate freely based on mutual consent.

If the principal company does not agree to joint bargaining or voluntary negotiations, the parties must revert to the statutory principle and go through the single bargaining channel procedure.

Q3. How does the bargaining process proceed after a subcontractor’s union makes a bargaining request?

A3. To initiate the single bargaining channel procedure, the first step is to confirm which labor unions have requested bargaining. The process is as follows:

(i) The subcontractor’s union requests bargaining with the principal company.  Upon receiving such request, the principal company must publicly announce the fact of such bargaining request for seven (7) days from the date of receipt (Article 14-3(1) of Enforcement Decree).

(ii) During this announcement period, any other labor union may request participation in the bargaining by submitting a request to the principal company (Article 14-4 of Enforcement Decree).

(iii) After the above announcement period ends, the principal company must, on the following day, finalize the list of unions that have requested bargaining, notify them accordingly, and publicly announce the list for five (5) days (Article 14-5(1) of Enforcement Decree).

Once the unions eligible to participate in bargaining are confirmed, the single bargaining channel procedure is conducted among those unions. When the representative bargaining union is ultimately designated, such union engages in collective bargaining with the principal company.

Q4. If a subcontractor’s union makes a bargaining request, can a principal company refuse bargaining on the grounds that its status as an “employer” is not recognized?

A4. The principal company may refuse to accept the bargaining request in certain ways, for example, by not posting the required public announcement of the request, or, if the single bargaining channel process is already underway, by excluding the subcontractor’s union from the announcement that finalizes the list of unions requesting bargaining. In such cases, the subcontractor’s union may file an application for remedy with the Labor Relations Commission (Articles 14-3(2) and 14-5(4) of Enforcement Decree).

The MOEL has also stated that, during the Labor Relation Commission’s review of such applications, it plans to determine the principal company’s status as an “employer” based on the parties’ submissions and ex-officio investigations conducted at its discretion.

Q5. Which subcontractor’s unions are eligible to request bargaining with the principal company?

A5. The amended Trade Union and Labor Relations Adjustment Act (“Act”) does not explicitly define or limit the scope of subcontractors’ unions eligible to request bargaining with the principal company. Therefore, as a matter of interpretation, not only subcontractors directly contracted with the principal company, but also second-tier subcontractors and other indirectly related subcontractors may request bargaining with the principal company. However, even if a union makes such a request, whether the principal company is legally recognized as an “employer” for that union must still be determined separately on a case-by-case basis.

Q6. Once the law takes effect, can subcontractor’s unions immediately request bargaining with the principal company?

A6. A request for collective bargaining may be made starting from three (3) months prior to the expiration of the existing collective agreement. If more than one collective agreement exists, the union may request bargaining starting from three months prior to the earliest expiring agreement (Article 14-2(1) of Enforcement Decree).

In connection with the enforcement of the amended Act, since the principal company and subcontractors belong to the same bargaining unit until separation of bargaining units occurs, controversy exists as to whether, where a collective agreement has been executed between the principal company and its employees, the subcontractor’s union may request collective bargaining only from three (3) months prior to the expiration of such collective agreement, or may request collective bargaining immediately.

Two views exist in this regard:

(i) since the principal company and subcontractors constitute the same bargaining unit, if a valid collective agreement executed by the existing labor union exists, bargaining may be requested only from three (3) months prior to the expiration date of such agreement; and

(ii) since the subcontractor’s union was unable to participate in the principal company–centered single bargaining channel procedure prior to the enforcement of the amended Act, the enforcement of the amended Act should be regarded as a special circumstance, and therefore bargaining should be permitted immediately.

The MOEL is expected to issue a guideline or a manual to clarify this issue.

Q7. What bargaining agenda items can a subcontractor’s union raise against the principal company?

A7. Subcontractor’s unions cannot request bargaining over all employment conditions. Bargaining is limited to employment conditions over which the principal company has the position to exercise actual and specific control or decision-making authority. Based on lower-court precedents addressing “employer” status, bargaining items will likely include matters such as occupational safety and health and working hours of subcontractor employees working within the principal company’s facilities.

Q8. Who determines whether the principal company has “employer” status?

A8.  In the first instance, the determination will be made by the Labor Relations Commission through cases such as applications for corrective action regarding failure to publicly announce bargaining requests or failure to announce the finalized bargaining labor union. Where necessary, the Labor Relations Commission may request submission of materials from the parties or conduct an ex officio investigation to determine the principal company’s status as an “employer” (Article 23 of Labor Relations Commission Act). Ultimately, if a party objects to the decision of the Labor Relations Commission, the issue will be finally determined by the court through administrative litigation.

Q9. How can a party challenge the Labor Relations Commission’s determination of a principal company’s “employer” status?

A9. Corrective orders issued by the Labor Relations Commission for failure to publicly announce bargaining requests or failure to announce the finalized bargaining labor union may be challenged through a request for review and administrative litigation.

Q10. In the MOEL’s legislative notice on the Amended Enforcement Decree, what does “if “employer” status is recognized for a certain working condition, bargaining shall proceed thereafter” mean in the explanation pertaining to “establishment of grounds to permit extension of the decision period for corrective applications before the Labor Relations Commission”?

A10.  In principle, the principal company’s “employer” status is determined on an issue-by-issue basis. For example, even if “employer” status is denied with respect to “wages,” it may still be recognized with respect to “industrial health and safety.”

Therefore, if during the Labor Relations Commission’s review process, it is found that the principal company exercises substantial control over one of the issues raised by the subcontractor’s labor union (e.g., industrial safety), collective bargaining must proceed in relation to that issue. However, if substantial control is not recognized with respect to other issues, the principal company may freely challenge “employer” status for those issues.

Q11. What is the role of the “Employer Status Determination Advisory Committee”?  Are its decisions binding?

A11. The Employer Status Determination Advisory Committee is expected to be established within the MOEL to provide determinations on “employer” status upon application by a bargaining party, regardless of the stage of negotiations.

However, the Committee’s determinations are advisory in nature only and have no legally binding effect.

Q12. Would there not be issues if the principal company’s union and the subcontractor’s union bargain together under a unified bargaining channel since the interests of the unions of the principal company and subcontractor may differ?

A12. Although both the principal company’s union and the subcontractor’s union bargain with the same employer (i.e., the principal company), the scope of bargaining rights, the extent of the principal company’s responsibility, employment conditions, and other interests may differ significantly.

Taking these factors into account, the MOEL has indicated that, in principle, the bargaining units of the principal company and the subcontractor should be separated. Further, to safeguard the bargaining rights of subcontractor’s unions, the MOEL also intends to apply the “separation of bargaining units” system flexibly. Therefore, where the interests of the principal company’s union and the subcontractor’s union differ, it is likely that the subcontractor’s union will apply for separation of bargaining units.

Q13. When the principal company bargains with the subcontractor’s union, is it mandatory for the subcontractor to participate as well?

A13. The principal company has an independent obligation to engage in collective bargaining with the subcontractor’s labor union, separate from the subcontractor. Therefore, the principal company is not required to involve the subcontractor in the bargaining process.

However, where the bargaining agenda items overlap with matters within the subcontractor’s authority, or where joint discussions are considered necessary for an effective agreement, the parties may by mutual consent form a joint bargaining panel, in which case the subcontractor may participate in the negotiations.

Q14. Who can apply for separation of bargaining units, and when?

A14. Either the principal company’s labor union, the subcontractor’s labor union, or the principal company may apply for separation of bargaining units. The application period may be filed either:

(1) before the principal company issues a public announcement on the bargaining request; or

(2) after the representative bargaining labor union has been determined (Article 14-11 of Enforcement Decree).

Q15. Under the Amended Enforcement Decree, what are the criteria for determining “separation of bargaining units?”

A15. When determining the separation of bargaining units, the Labor Relations Commission comprehensively considers the factors set forth in Article 14-11(3) of the Amended Enforcement Decree. Specifically, the regulation provides that the criteria include commonality of interest, adequacy of representation, and the intention of the parties. The main considerations are as follows:

1.  Significant differences in working conditions (i.e., working processes, wage systems);

2.  Employment type/structure (i.e., recruitment methods and personnel transfers);

3.  Bargaining practices (i.e., scope of union organization and existing consultation channels); and

4.  Intentions of the parties, adequacy of interest representation, and the likelihood of conflicts among labor unions.

This framework reflects the intent to enable flexible separation of bargaining units between principal companies and subcontractors based on a holistic assessment of relevant factors.

Q16. In what cases are bargaining units separated by individual subcontractors?

A16. Separation by individual subcontractor is appropriate where there are substantial differences among subcontractors in terms of job functions, interests, or characteristics of the labor union, such that autonomous bargaining by each subcontractor’s labor union is considered appropriate.

For example, in industries with complex in-house subcontracting structures such as shipbuilding or steel manufacturing, different subcontractors may perform entirely distinct functions (e.g., equipment maintenance, painting and assembly, logistics and shipping). In such circumstances, differences in job characteristics, workforce composition, and working environments may make it difficult to formulate unified bargaining agendas, therefore, justifying separation by individual subcontractors.

Q17. Can subcontractors with similar job functions be grouped into a single separate bargaining unit?

A17. Yes.  Subcontractor’s labor unions with similar job functions or interests can be grouped into a separate bargaining unit.  For example, in industries such as shipbuilding or steel manufacturing, where multiple subcontractors perform similar processes, it may be more efficient and rational to group workers engaged in similar tasks into one bargaining unit considering comparable employment conditions and job characteristics.

Q18. Can all subcontractors be grouped together into a single separate bargaining unit?

A18. If the job functions and interests of all subcontractors’ employees are similar and there is a need to establish uniform working conditions, all subcontractors’ unions may be grouped into a single separate bargaining unit distinct from the principal company’s union.

For example, where a principal company outsources identical work, such as call center operations or customer service functions to multiple subcontractors, although the subcontractors differ, subcontractors’ employees may nevertheless perform similar counseling tasks in accordance with standardized manuals and be subject to broadly comparable working conditions.

In such cases, where the job functions, interests, and working conditions of subcontractors’ employees are similar, grouping all subcontractor unions into a single bargaining unit may enhance the effectiveness and rationality of collective bargaining.

Q19. Can a principal company object to or challenge a decision on separation of bargaining units?

A19. Yes. A principal company can submit its opinion during the Labor Relations Commission’s determination process. If dissatisfied with the decision, the principal company can challenge the decision through a request for review and administrative litigation.

Q20. What should principal companies do at this stage to prepare?

A20. Principal companies should closely monitor forthcoming guidelines and manuals to be issued by the MOEL and review the extent to which they exercise “substantial control” over subcontractor’s employees’ employment conditions (in particular, safety and work processes).

Furthermore, pursuant to the Amended Enforcement Decree Act, considering that the Labor Relations Commission has a statutory deadline of no more than twenty (20) days to process applications for corrective action concerning the public announcement of bargaining requests or the confirmation of bargaining labor unions, principal companies should proactively review which bargaining issues raised by subcontractor’s unions may fall within the scope of recognized “employer” status and prepare supporting materials in advance to challenge such “employer” status where appropriate.

Conclusion

This newsletter has been prepared to provide practical guidance and proactively address the questions and uncertainty that companies are likely to face following the MOEL’s legislative notice on the Amended Enforcement Decree.

In particular, the complex structure under which a principal company’s status as an “employer” may vary depending on individual bargaining issues, together with the more flexible application of the separation of bargaining units, is expected to give rise to significant legal risks and uncertainties for businesses in practice.

While considerable challenges are anticipated before the revised framework becomes fully established in the workplace, Yoon & Yang’s Employment & Labor Practice Group is committed to providing professional, practical solutions based on in-depth analysis of the Amended Enforcement Decree, enabling our clients to navigate these changes smoothly and with confidence.

In a rapidly changing socioeconomic environment, Yoon & Yang’s Employment & Labor Practice advises clients on matters related to formation of trade unions pursuant to the Trade Union and Labor Relations Adjustment Act, and negotiations in the process of collective bargaining. Our Practice also provides advice on collective action-related matters where labor-management negotiations fall through. Yoon & Yang’s Employment & Labor Practice has also successfully represented clients in criminal actions resulting from unfair labor practices and violation of the Trade Union and Labor Relations Adjustment Act.