Labor Relations Commission’s Decision on Dividing Bargaining Units

Since July 1, 2011, the establishment of multiple unions at the enterprise level has been permitted. If two or more trade unions exist in a single workplace/business (a ’plural union workplace’) as of December 31, 2009, the plural union workplace is required to unify its collective bargaining channels by June 30, 2012.In terms of unifying collective bargaining channels, there is a lot of room for interpretation of the labor law because of the difficulty of regulating every collective bargaining situation at plural union workplaces. Employers need to be able to make informed decisions on whether to bargain with one bargaining representative union or allow division of the bargaining units and negotiate separately with each individual union.Individual bargaining can take place if there is a request from trade unions participating in the process of selecting the representative bargaining union and the employer concerned agrees, according to Article 29.2.1 of the Trade Union and Labor Relations Adjustment Act (TULRAA). However, the bargaining unit can be separated only with the approval of the Labor Relations Commission (LRC) after consideration of working conditions, employment status, bargaining practices and other variables (Article 29.3.2 of the TULRAA).

In terms of possibility of reversing its type of collective bargaining, individual bargaining can change for the next bargaining season, however, separated bargaining units cannot be remerged without a reversal of the LRC decision.

Hence, employers at plural union workplaces need to check the division process, factors for consideration of dividing the bargaining units and other specific cases when deciding the type of collective bargaining in this era of the multiple unions system.

Application for dividing bargaining units

A trade union and/or an employer can request for dividing the bargaining unit by the LRC. The Act mandates that application for bargaining unit division shall (1) be completed before the employer notifies of his/her receipt of a bargaining request, or (2) be submitted after a bargaining representative union is determined (Article 14.11 of the Enforcement Decree). Therefore, even after a trade union is selected as the bargaining representative union, other trade unions can request the LRC to divide the bargaining unit. Such a decision by the LRC will take effect from the current collective bargaining season.

[Table 1] Application for Dividing Bargaining Units

Upon receiving a request for dividing bargaining units, the LRC shall review the necessity to do so and other objective elements such as material disparity in working conditions, employment status, and bargaining practices between the trade unions involved (Article 29.3.2 of the TULRAA). Based on those objective factors, the LRC would conclude the needs to divide the bargaining units reflecting its background and future perspective.

[Table 2] Factors to be Considered & Necessity for Bargaining Unit Division

Dividing bargaining units: actual cases

The LRC announced its decision to divide the bargaining units of Company A and Company B. Plant Company A and B used to negotiate collective agreements with different trade unions according to region and run various business units.

Traditionally, plant enterprises carry out large-scale construction projects in different areas with collective bargaining for each area conducted between the local construction union and the related construction firm. The working conditions (such as wages and holidays) are very different from region to region. So far, only specific business units of both Company A and Company B have engaged in industry-level collective bargaining with the Korea Metal Workers’ Union and such bargaining practice makes a big difference in working condition between business units. Due to such disparity (wage levels, wage systems and the standards for severance pay), workers do not transfer between units.

It is not easy to measure how the objective elements at the workplace influence the LRC’s decision to divide a collective bargaining unit; however, it is safe to assume that bargaining practice and labor mobility between units is likely to have significant effect, as we look at some specific cases mentioned above.

Other trade unions (in both Company A and Company B) which did not request dividing the bargaining units agreed to it when asked for their opinions. This fact would also influence the LRC to accept the request for bargaining unit division. Hence, employers wishing to divide the bargaining unit need to clearly report the facts regarding business characteristic and relationship between trade union and its members as well as examine the whole situation at their workplace(s).

Once the collective bargaining method (which greatly influences the proceedings and results of bargaining) has been decided by the LRC, it is very difficult to change again. Employers need to be aware of the entire labor situation in their companies, including industrial relations, bargaining practices, potential influences on business, and labor laws when choosing their method for collective bargaining – single bargaining channel, individual bargaining or dividing the bargaining units. Thus, every effort must be made to choose the most appropriate bargaining method for the needs of their businesses.