The subcontracted workers for Company A (primary contractor) established a subcontract workers’ union, an affiliation of the Korean Metal Workers’ Union (KMWU) under the Korean Confederation of Trade Unions (KCTU). The subcontract workers’ union in Company A is seeking negotiations with the subcontractor company.
Bargaining with a subcontract workers’ union is quite different from ordinary collective bargaining. Unlike ordinary trade unions at the company level, subcontract workers’ unions include subcontract workers from different subcontractors. They demand a group of subcontractors to participate in the collective bargaining. Should the subcontractors participate in the negotiations as a group, or should each subcontractor negotiate with the trade union separately? In addition, these demands for collective bargaining by subcontract workers’ unions are accompanied by other demands for employment guarantees or equal treatment in working conditions to workers hired by the primary contractor, demands which subcontractor companies have difficulties to accept.
Individual bargaining is recommended with subcontract workers’ unions
Most subcontract workers’ unions demand that subcontractor companies participate in the collective bargaining as a group. The subcontract workers’ union in Company A is also consistently demanding for this. What is the reason for this demand?
The membership of most subcontract workers’ unions is small, and the members are affiliated with different subcontractors after establishment of the unions. By negotiating with multiple subcontractors at once, these unions attempt to increase their negotiating position by maximizing the impact of strikes if negotiation should break down, which would not be the case if they were to negotiate individually with each subcontractor.
However, subcontractors are not able to deal with most of the general claims of subcontract workers’ unions during collective bargaining, as these claims include employment guarantees for when the subcontract work is finished. Such demands are an indirect way of attempting to pressure the primary contractor, which was the intention of subcontractor trade unions in automaker companies when they requested collective negotiations with many subcontractors at the time of their establishment.
Subcontractors do not have an obligation to agree on bargaining as a group, since individual bargaining or group bargaining is determined by an agreement between labor and management. Subcontractors are advised to determine the best method for negotiations after considering the strengths and weaknesses of the different types.
If a subcontractor is small with little experience managing labor, the company might feel significant pressure to bargain. However, individual bargaining can weaken the negotiating position of subcontract workers’ unions, since the union must deal with many subcontractors. Moreover, maximizing the impact of strikes or putting pressure on primary contractors is also not desirable. Subcontractors are advised to stick to individual bargaining in this context. Protests or strikes on the grounds of refusal to engage in group bargaining are illegal, and companies should handle the illegal strikes or protests according to law and principles. The National Labor Relations Commission has ruled that trade union interference with business activities through demonstrations etc. can be a cause for dismissals.
Reject demands which violate management rights
In order to expand and exercise their influence, subcontract workers’ unions tend to focus on the areas of greatest interest to workers and issue related demands in collective bargaining regardless of their employers’ ability to meet those demands. Subcontract workers’ primary concerns are wage increases, working environment improvements, and employment security upon termination of the subcontract work, and subcontract worker trade union demands directly reflect this. This was also the case for the subcontract workers’ trade union in Company A.
Nonetheless, judicial precedent is clear that recruitment and dismissal are the management rights that belong to companies, and thus cannot be the subject of bargaining. Benefits for workers from primary contractors cannot be the target of comparison when subcontractors determine wage and welfare for their workers, since primary contractor workers work for a different company than the subcontract workers.
Issued by the Ministry of Employment & Labor (MOEL), the “Guidelines for Protection of Working Conditions of In-house Subcontract Workers” simply advises primary contractors and subcontractors make efforts to improve working conditions for subcontract workers.
Subcontract workers’ unions often demand, in collective bargaining with subcontractors, a staff lounge or a space for union office, but these demands can be refused since the use of primary contractor space cannot be determined by subcontractors.
Labor management in preparation for labor inspection is required
Under the current situation where social awareness of subcontract issues is increasing, subcontract workers’ unions are focusing on issues such as subcontractor’s noncompliance with the law regarding working conditions. In fact, the subcontract workers’ union in Company A reported to the MOEL the existence of Labor Standards Act violations by subcontractors, and requested a labor inspection, which the MOEL carried out immediately. If labor inspectors find any Labor Standards Act violations, subcontractors may find themselves in unfavorable position during collective bargaining with the trade union.
Labor inspections of subcontractors by the MOEL can be expanded to primary contractors who may be found guilty of violations such as illegal dispatch, or other labor practices defined as unfair under Trade Union & Labor Relations Adjustment Act, or failure to take sufficient action to protect safety and health as required under the Occupational Safety & Health Act.
To avoid sudden labor inspections, subcontractors should manage their labor force properly, by writing contracts and distributing them to the workers, so that they will not be found in violation of the Labor Standards Act or the Occupational Safety & Health Act. In particular, subcontractors should note that such cases that a subcontractor has pressured its workers to withdraw from unions or disadvantaged union members can lead to prosecution for unfair labor practice.
Subcontractors must also be aware that primary contractors can also become targets of subcontract workers’ unions if subcontractors do not appropriately respond to demands for collective bargaining by their unions. In automaker companies, subcontract workers’ unions greatly increased their membership by struggling with subcontractors over wage and collective bargaining, and then took on primary contractors regarding illegal dispatch issues.
The trade unions are still causing serious problems in such workplaces. Therefore, subcontractors are advised to take a systematic approach to requests from subcontract workers’ unions, developing plans for action from the beginning of union establishment, to collective bargaining, labor inspections and etc.