1.

Key Takeaways of the Supreme Court En Banc Decision

In cases where Article 2 of the Former Trade Union Act applies, the Supreme Court ruled that the former legal doctrine — which narrowly defines an “employer” who bears the duty to bargain collectively — remains reasonable and should be retained for the following reasons:
 

(1)

Based on the text of Article 2, Subparagraph 2 of the Former Trade Union Act, it is difficult to interpret the concept of an “employer” to include those who, despite not being parties to an employment contract, are in a position to substantially and specifically control or determine the workers’ working conditions.
 

(2)

The purpose of the recent amendment to the Act is to expand the definition of an employer more precisely since, in the case of unfair labor practices involving control or interference, an entity that is in a position to substantially and specifically control or determine the working conditions of the workers—even without having directly entered into an employment contract with them—can nonetheless infringe upon their three basic labor rights through factual acts of control or interference.
 

(3)

Article 90 of the Former and Amended Trade Union Act imposes criminal penalties (imprisonment for up to 2 years or a criminal fine of up to KRW 20 million) on those who commit unfair labor practices. Since “being an employer who bears the duty to bargain collectively” is a core element of the criminal offense for refusing collective bargaining, Article 2 of the Former Trade Union Act must be strictly interpreted in accordance with the principle of legality.
 

(4)

Looking at the substance and background of the Amended Trade Union Act, it is clear that the legislature made a deliberate choice to expand the concept of an “employer” by adding the latter part of Article 2, Subparagraph 2, on the premise of respecting the Supreme Court’s existing legal doctrine.
 

(5)

The essence of adjudication lies in providing relief for rights in concrete cases; therefore, it is not permissible to declare abstract legal principles unrelated to a specific dispute. In a collective bargaining dispute arising around 2016 to which the Former Trade Union Act applies, it is inappropriate to depart from established precedent and apply a legal standard substantially similar to that of the Amended Trade Union Act.
 

2.

Strategic Implications and Recommendations

This en banc decision is significant since it reaffirms that, under the Former Trade Union Act, the existing doctrine remains valid: an employer duty-bound to bargain collectively is strictly defined as one who has an explicit or implied employment contract to direct, supervise, receive labor from, and pay wages to a worker.

Notably, the Supreme Court stated that in future cases where the Amended Trade Union Act applies, the concept of an employer must be interpreted in line with the legislative purpose of “effectively guaranteeing the three basic labor rights.” Consequently, how lower courts define the scope of a principal company’s substantial and specific control in future disputes will drastically reshape the landscape of labor-management relations.

Therefore, under the regime of the Amended Trade Union Act, companies must proactively manage legal risks and prepare for new forms of collective bargaining demands. This includes reviewing and restructuring principal-subcontractor outsourcing structures and operational methods. Additionally, as the criteria for “substantial control” raised in the minority opinion of four Supreme Court Justices is highly likely to become a key point of contention in future disputes, a thorough prior analysis of existing internal structures and proactive preparation are strongly advised.