1.

Bargaining Unit Separation within Single Representative Framework

The MOEL’s primary stance is to respect autonomous labor-management relations. The government intends to actively support cases where the principal contractor and subcontractor unions agree to engage in autonomous or joint bargaining. However, if the parties fail to reach an agreement, the procedure for establishing a single bargaining channel will proceed based on the principal contractor’s workplace. In such cases, the Labor Relations Commission (the “LRC”) will utilize the separation of bargaining units procedure to ensure subcontractor unions can exercise their substantive bargaining rights.

The Amendment adds Article 14-11, Paragraph 3, establishing clear criteria for the LRC to separate bargaining units based on the specific circumstances of the subcontractor union. The LRC must now consider the union’s scope, commonality of interests, adequacy of representation by other unions, potential inter-union conflicts, and the parties’ preferences—expanding on prior factors such as differences in working conditions, employment types, and bargaining practices.

Based on these criteria, bargaining units for subcontractors are expected to be separated in various ways such as the following:
 

(1)

Individual unit: If the duties, interests, or union characteristics differ significantly among subcontractors, units may be separated by individual subcontractors.

(2)

Group unit: If there are subcontractors with similar duties or characteristics, they may be grouped as separate units.

(3)

Unified unit: If the duties and characteristics of all subcontractors are similar, all subcontractors may be separated into a single, unified bargaining unit.

2.

Streamlined Procedures for Employer Status Determination

If a principal contractor fails to publicize the fact that a bargaining demand has been made, or fails to publicize the finalized list of demanding unions, the subcontractor union may file a request for correction with the LRC (Amendment Article 14-3, Para. 2 and Article 14-5, Para. 4, Subpara. 1). Upon such a request, the LRC will examine whether the principal contractor constitutes an “employer” exercising substantial control over the subcontractor’s employees through its authority under the Labor Relations Commission Act to conduct investigations and demand the submission of necessary documents.

Recognizing that determining employer status for a principal contractor involves a complex review of “substantial control” over working conditions, the Amendment allows for an extension of the LRC’s current decision-making period of 10 days by up to 10 additional days (maximum 20 days) (Amendment Article 14-3, Para. 3 and Article 14-5, Para. 5).

If the LRC recognizes the principal contractor’s substantial control over specific working conditions, the principal contractor must proceed with bargaining procedures as an employer. This administrative determination is expected to minimize labor disputes regarding employer status before full-scale bargaining begins. If a principal contractor refuses to bargain without justifiable cause, the MOEL plans to enforce compliance through administrative guidance and judicial proceedings (e.g., unfair labor practices).

To increase predictability and facilitate bargaining, the MOEL has announced plans to establish an “Employer Status Determination Support Committee.” This body will assist in determining the existence of a bargaining obligation when there is disagreement or ambiguity regarding the scope of employer status between the principal contractor and subcontractor unions.
 

3.

Practical Implications for Companies

The MOEL has emphasized that this Amendment aims to create a stable framework for collective bargaining between principal contractors and subcontractor unions while upholding the principle of labor-management autonomy.

In anticipation of the amended TULRAA’s enforcement, companies operating with principal-subcontractor structures are advised to:
 

(1)

Proactively identify which specific working conditions of subcontractor employees are subject to the company’s substantial and specific control.

(2)

Conduct a preliminary legal review to determine the potential scope of the company’s bargaining obligations. 

(3)

Develop a clear understanding of the single bargaining channel establishment and unit separation procedures to ensure readiness for potential negotiations with subcontractor unions.