Ⅰ. Concept and Forms of Collective Bargaining

1. Concept of collective bargaining

Collective bargaining refers to the negotiation of working conditions by the labor-management council. The labor union and the employer(or employers’ association) come to agree collectively on working conditions or other fair rules of labor relations and conclude a collective agreement.

2. Good faith principle

The parties to collective bargaining shall negotiate a collective agreement in good faith and may not abuse their right to collectively bargain in the process. Neither the union nor the employer may refuse or neglect to bargain or conclude a collective agreement without giving a justifiable reason for doing so.

3. Forms of collective bargaining

(1) Company level collective bargaining(labor union: employer)
Most Korean companies use this form, which is negotiation between the company and the union organized by employees of the company.

(2) Multi-union/employer bargaining(union association: employers’ association)
Multi-union/employer bargaining refers to negotiation between an association of local or country-wide unions and the industrial or local employers’ association.
Regarding multi-union and employer bargaining, there are three typical industrial labor unions: Metal Workers’ Union, Financial Industry Union, and Health & Medical Workers’ Union

(3) Diagonal bargaining(associated union: individual company’s employer)
The associated union of the company-level union independently engages in collective bargaining with the individual company’s employer corresponding to the individual union.

(4) Coordinated bargaining(associated union and individual union: employer)
The associated union participates in joint collective bargaining between an individual union or a branch of an associated union(branch of industrial or occupational union) and the employer.

(5) Multi-group bargaining(several company-level labor unions: employers’ association)
Several company-level labor unions unite to negotiate with the employers’ association, which is often referred to as combined bargaining or congregation bargaining.




Ⅱ. Parties to Collective Bargaining

1. Collective bargaining party

The collective bargaining parties have a right and duty to engage in collective bargaining and implements it independently.

(1) Employee side
The bargaining party for the employee shall be a legitimate labor union established under requirements demanded by the Trade Union Act. Thus, temporary strike groups, dismissed employees’ groups, company organizations, individual employees, or key anti-union members do not have legal authority to demand collective bargaining. Hence, if the employer rejects collective bargaining demands from such groups or persons, it is not recognized as an unfair labor practice.
If a labor union is formed as an industrial or occupational union but its union branch or union unit for the individual company is established under proper requirements such as through formation of union bylaws, union officers, etc. in order to act independently, such a union can be a party to collective bargaining for specific outcomes according to the demands of the union described by the union bylaws or union resolutions as the party to have the right and duty to negotiate.
In cases where the labor union’s subordinate organizations like a unit labor union or a branch labor union that have independent bylaws and executive organizations, and conduct activities like an independent entity, such an entity can bargain and conclude a collective agreement regarding organization and labor union members. This does not affect whether they have been established in accordance with Article 7 of the Enforcement Decree to the Labor Standards Act(LSA).

(2) Employer side
The bargaining party for the employer shall be the corporation for the corporate entity or the company owner for a private company. The employers’ association has the right to adjust or control its members concerning labor relations.

2. Person-in-charge of collective bargaining

(1) Employee side
The representative of a labor union or delegates of a labor union shall have the authority to negotiate as persons-in-charge of the collective bargaining. The term, “authority to negotiate “ includes not only the authority to bargain collectively, but also the authority to conclude a collective agreement reflecting those collective negotiations.

(2) Employer side
The employer or representative of the employers’ association shall be the person-in-charge of the collective bargaining. Here, the employer refers to the company owner in the case of a private company or the representative director in the case of a corporation. The general manager of the branch office or the chief of the labor affairs department can also be the person-in-charge of the collective bargaining through proxy authority of limited scope or special delegation.


Ⅲ. Matters Subject to Collective Bargaining

There are no statutory regulations as to the matters subject to collective bargaining. However, in light of the fact that collective bargaining is fundamentally aimed at maintaining or improving working conditions, the matters subject to collective bargaining shall be those concerning working conditions, those of a collective nature, or those at the disposal of the employer.

1. Effect of collective bargaining on personnel and management

If the employer rejects the demand for collective bargaining on matters violating personnel and management rights, it is not recognized as an unfair labor practice. If the employer accepts the bargaining demands at his/her own discretion and negotiates an agreement on matters of personnel and management, the employer shall implement them accordingly.

2. Cases where personnel and management rights are violated

1) The union demands agreement on personnel issues(e.g., employment, dismissal, transfer of employees to another division, etc.).

2) The union demands a disciplinary action committee consisting of an equal number of employer and employee representatives and equal treatment after rejection of its disciplinary proposal.

3) The union demands a pre-agreement concerning any merger or acquisition involving the company, plant removal, subcontracting, or outsourcing.

4) The right to bring changes to work organization or the business structure in step with removal or integration of some departments is included in the employer’s prerogatives concerning business management. Accordingly, the right cannot be negotiated at a collective bargaining table, and no action that is aimed at negotiating the un-negotiable can be justifiable.

5) Dismissal for managerial reasons is based on the employer’s right to take measures for business purposes. If the union claims that the employer should not dismiss employees for managerial reasons, this is an attempt to restrict the employer’s right to manage his own business. Therefore, dismissals for economic reasons cannot be negotiated in the setting of collective bargaining.




3. Items related to personnel & management rights where bargaining is compulsory

1) The union demands payment of moving costs, settlement expenses, etc. although employee-transfer decision-making is the sole right of the employer.

2) The union demands establishment of personnel criteria related to working conditions for the entire body of employees, such as personnel guidelines, criteria for job assignment and rotation, etc.

3) The union demands pre-judgment or negotiation, although the employer has final decision-making authority for disciplinary punishment or dismissal.

4) In a specific case, the collective agreement provided that the employer should obtain prior consent from the union when setting the services of regular bus drivers, the bus service schedule, and the schedules for on-call drivers and daily-hired drivers. These matters are closely associated with employee working conditions(bus drivers), although they are part of the employer’s right to manage his own business. In addition, it does not seem to fundamentally undermine the employer’s rights to include them in collective bargaining. Accordingly, they may be negotiated at the bargaining table.

Ⅳ. Authority to Make Agreements and Delegation Procedures

1. Admission of a union representative’s authority to make agreements

Although the negotiating authority of a union representative includes the authority to make agreements, it is a very common practice for the unions of industrial companies to hold a general meeting to review the agreements on account of the union bylaws and demand re-bargaining in case the agreements are not accepted, which usually delays the negotiation process. Thus, the new Article 29, subparagraph 1, of the Trade Union Act endows authority to the union representative to bargain and make collective agreements.
If the union representative or another authorized person is required to put before a general meeting of union members a collective agreement that is negotiated with the employer, this would render ineffective the right of the union representative or the authorized person to conclude a collective agreement. Namely, the right to conclude a collective agreement would be reduced to a mere nominal right. In this light, such provision is against the purpose of the Trade Union Act in force.


2. Delegation procedures

The delegate to collective bargaining shall receive approval from the general meeting of the union or council of delegates.
Mandating the authority to collective bargaining means that a union authorizes a person or organization other than the union representative to negotiate with the employer on behalf of the union and for the good of the union and its members. Even without a separate procedure of declaring an end to the mandated authority, the union’s right to collective bargaining always exists in concurrence with the authorized party’s right. In other words, even when a unit union has mandated its right to collective bargaining to an associated organization, the union’s right to collective bargaining is retained.
As long as the branch or chapter of the union is an independent organization with an independent set of rules and a governing body, it may carry out independent collective negotiations and sign collective agreements over the matters peculiar to the organization and its member employees. This is not affected by whether or not the branch or chapter has reported its establishment in accordance with Article 7 of the Trade Union Act.

Ⅴ. Procedures for Collective Bargaining

1. Initiating collective bargaining
Collective bargaining is initiated upon the labor union’s request. If there already exists an applicable collective agreement(including wage agreement) in the company, collective bargaining for a new collective agreement shall be withheld until termination of the existing agreement.
However, if there is no existing collective agreement, or if the union demands new content, collective bargaining can be initiated at any given time, but it is desirable to develop a method of preliminary bargaining to ensure things run smoothly.

2. Time and place for collective bargaining
In principle, collective bargaining shall not be held during working hours, unless it has been habitually held during working hours and the employer has allowed this. The place of bargaining is unrestricted, but it is recommended to consider a place where discourse can continue without interruptions.

3. Procedures for collective bargaining
1) Demands for collective bargaining shall be sent in a written document specifying time, place, major agenda items, representatives, etc. The two parties shall consult and decide on the day and time of bargaining.
2) If the union has demanded collective bargaining several times but the employer continues to postpone it or fails to respond, it is considered to be a refusal to engage in collective bargaining. If the employer responds but does not negotiate in good faith, or proposes demands that are disadvantageous and forces it upon the union, or leaves the office, this is also refusal to engage in collective bargaining.
3) During the effective period of the collective agreement, the union cannot make requests for a new collective agreement(including a collective wage agreement) due to enlargement of the union, replacement of the union representative, etc.