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Redefining Employer Status : Risks to Legal Clarity and Business Confidence
Restriction on Ambiguous Expansion of Employer Definition under Trade Union Act
(Proviso to Article 2, Trade Union and Labor Relations Adjustment Act)
The proposed amendment to Article 2 of the Trade Union Act adds a proviso stating that “In this case, even if a person is not a party to an employment contract, a person who is in a position to substantially and specifically control and determine the working conditions of a worker shall be regarded as an employer within that scope.”
The amendment expands the definition of an “employer” to include those who substantially and specifically influence working conditions, regardless of whether they are party to an employment contract. This expansion abstractly broadens the scope of legal liability, thereby undermining the principle of legal certainty, particularly the requirement of clarity under the principle of legality. The Supreme Court has never recognized the concept of “substantial control” in determining who qualifies as an employer for the purposes of collective bargaining.
Given the numerous criminal sanctions imposed on employers under the Trade Union Act, this vague and expanded definition may treat business operators as potential criminals and significantly discourage business activity. The impact is particularly severe for foreign-invested companies, which are highly sensitive to legal risks stemming from labor regulations. For example, if a company faces the risk of criminal penalties for refusing to engage in collective bargaining—especially in situations where it is unclear which union to negotiate with—it may ultimately choose to withdraw from the Korean market.
In addition to these concerns, the European Chamber of Commerce in Korea (ECCK) warns that the expanded definition of “employer” in Article 2 could lead to increased subcontracting burdens, more frequent strikes by subcontracted workers, and heightened conflict between principal contractors and subcontractors. This overly broad scope risks destabilizing the subcontracting ecosystem, undermining legal predictability, and encouraging a confrontational labor culture that prioritizes strikes over constructive dialogue and cooperation between labor and management.
The ECCK urges reconsideration of the proposed proviso to Article 2 of the Trade Union Act, as it may pose serious threats to the employment of both current workers and future generations.
Redefining Employer Status : Risks to Legal Clarity and Business Confidence
Restriction on Ambiguous Expansion of Employer Definition under Trade Union Act
(Proviso to Article 2, Trade Union and Labor Relations Adjustment Act)
The proposed amendment to Article 2 of the Trade Union Act adds a proviso stating that “In this case, even if a person is not a party to an employment contract, a person who is in a position to substantially and specifically control and determine the working conditions of a worker shall be regarded as an employer within that scope.”
The amendment expands the definition of an “employer” to include those who substantially and specifically influence working conditions, regardless of whether they are party to an employment contract. This expansion abstractly broadens the scope of legal liability, thereby undermining the principle of legal certainty, particularly the requirement of clarity under the principle of legality. The Supreme Court has never recognized the concept of “substantial control” in determining who qualifies as an employer for the purposes of collective bargaining.
Given the numerous criminal sanctions imposed on employers under the Trade Union Act, this vague and expanded definition may treat business operators as potential criminals and significantly discourage business activity. The impact is particularly severe for foreign-invested companies, which are highly sensitive to legal risks stemming from labor regulations. For example, if a company faces the risk of criminal penalties for refusing to engage in collective bargaining—especially in situations where it is unclear which union to negotiate with—it may ultimately choose to withdraw from the Korean market.
In addition to these concerns, the European Chamber of Commerce in Korea (ECCK) warns that the expanded definition of “employer” in Article 2 could lead to increased subcontracting burdens, more frequent strikes by subcontracted workers, and heightened conflict between principal contractors and subcontractors. This overly broad scope risks destabilizing the subcontracting ecosystem, undermining legal predictability, and encouraging a confrontational labor culture that prioritizes strikes over constructive dialogue and cooperation between labor and management.
The ECCK urges reconsideration of the proposed proviso to Article 2 of the Trade Union Act, as it may pose serious threats to the employment of both current workers and future generations.