Korean business lobby groups oppose trade union revision bill

[Photo by Kim Ho-young]

South Korea’s six major business lobby groups are calling for a halt to the proposed amendment to the country’s Trade Union Act, with the opposition Democratic Party planning to submit and pass the bill during a plenary session on Thursday.

The six groups - The Korea Enterprises Federation (KEF), the Korea Chamber of Commerce and Industry (KCCI), the Federation of Korean Industries (FKI), the Korea International Trade Association (KITA), the Korea Federation of SMEs (KBIZ), and the Federation of Middle Market Enterprises of Korea (FOMEK) - issued a joint statement on Wednesday, calling for the suspension of the proposed amendment to the Trade Union Act.

The proposal includes expanding the definition of employers and the scope of labor disputes and limiting the right of employers to claim damages for illegal strikes.

The six business lobbies asked the legislation to stop on grounds that the passing of the bill would shake the foundation of the legal system and lead to irreparable damage to labor management relations. They even plan to call for a presidential veto if the bill is passed.

“The amendment is an evil law that will destroy labor management relations, shake the industrial ecosystem to the core, and threaten the jobs of future generations,” the business community said. “The National Assembly should stop enacting the amendment to prevent the collapse of the country‘s businesses and economy.”

Under the proposed amendment, the scope of employers can be expanded to allow unions of subcontractors to take industrial action against prime contractors. Given that domestic manufacturing sectors such as automobiles and shipbuilding are each comprised of multi-level collaborative systems, the business circle maintains that the nation’s industrial ecosystem between prime contractors and subcontractors may collapse amid constant strikes against prime contractors.

“Prime contracting companies are likely to cut off business with domestic suppliers or take it overseas, resulting in the hollowing out of the domestic industry and job losses for small business workers,” the groups said. “In particular, if hundreds of subcontractor unions demand bargaining with prime contracting companies, the industrial scene is bound to fall into extreme chaos.”

According to the amendment proposal, not only issues that should be resolved through the judicial process such as unfair dismissal or reinstatement of a fired employee, but also employers’ management decisions such as investment decisions and business relocation could be subject to labor disputes. The amendment also makes it virtually impossible for the management to claim damages for illegal behaviors of labor unions.