Abstract

In March 24, 2022, the National Labor Relations Commission (the “NLRC”) has rendered a decision (the “Decision”), which extended the scope of employer status under the Labor Union and Labor Relations Adjustment Act of Korea (the “Labor Union Act”) in relation to the labor union of the subcontractor (the “Subcontractor Union”).BR In a case where the Subcontractor Union had claimed that the Contractor’s refusal to respond to the collective bargaining requested by the Subcontractor Union would constitute ‘unfair labor practice’ under the Labor Union Act, the NLRC took a progressive stance by explicitly adopting “de facto governing theory” instead of “implicit employment relationship theory,” and recognizing the Contractor’s obligation to respond to the Subcontractor Union’s request for collective bargaining.BR However, the Decision has failed to understand the basic structure of the Labor Union Act and such decision will only incur unresolvable practical difficulties, and increase unnecessary legal disputes and turmoil between the Contractor and Subcontractor Union. The main logical defects of the Decision is as follows.BR 1) The Decision appears to have deliberately distorted former court judgments and decisions rendered by the Regional LRC. In this regard, I tried to list up and assess all relevant cases for the past 10 years in order to induce a conclusion that “implicit employment relationship theory” has been and is a prevailing theory, except for a very few cases under special circumstances.BR 2) The ultimate purpose of collective bargaining is to execute a collective bargaining agreement (the “CBA”) and the CBA in principle governs the terms and conditions of employment. Hence “de facto governing theory” which severs the CBA from the employment relationship is simply illogical and irrational. At least under the current Labor Union Act, there is no convincing legal grounds to extend the scope of employer-employee relation beyond the traditional contractual employment relationship.BR 3) Under the “de facto governing theory,” it would be impossible to resolve issues surrounding unification of bargaining channel between the Subcontractor Union and the union of the Contractor. Further, punishing the Contractor for unfair labor practice for not responding to the request of collective bargaining would likely to be in violation of “nulla poena sine lege principle” under the Korean Constitution.BR Due to the recent development of multi-facet relationship between service provider and service receiver under the Fourth Evolution Era, it may be right time to discuss reforming the Korean labor laws. However, it would be prudent to abide by the current legal regime under the Labor Union Act until the Korean Assembly formally adopts such reform given that the legal stability is a key to a more stable labor relationship in Korea.

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