Ⅲ. Employer Industrial Actions: Lockout

1. Definition of lockout
An employer may declare lockout to counteract an industrial action taken by the labor union. Lockout refers to “an employer’s act of refusing to accept work provided by his/her employees” as a counteraction to the industrial action taken by the employees. It is a type of industrial action that an employer is allowed to take to guarantee an equal playing field in labor relations.

2. Requirements for lockout
A lockout may not be done in a preemptive or offensive way. The lockout shall be carried out only after the union has taken industrial action. This means that a lockout declared before any industrial action by the union is unlawful. If a lockout is not withdrawn even after the union genuinely has declared a halt to the industrial action, the lockout shall be considered an offensive one and so shall be deemed unjustifiable. An employer who intends to lock out shall report in advance to the competent authority and the jurisdictional Labor Relations Commission.

3. Effects of lockout
If a lockout is performed properly, the employer concerned is exempt from the obligation to pay wage for the lockout period.

4. MOEL Guidelines and judicial rulings concerning lockout

(1) Concept

A lockout is a situation in which the employer refuses to receive employees’ service as a means to defy their industrial actions and prevent their entry. The lockout sustains the power balance between labor and management by allowing the employer to counteract industrial actions by the employees.

(2) Requirements

1) Opposing lockout
The employer usually implements an opposing or defensive lockout after inception of an industrial action. Therefore, the employer may only report a lockout after the labor union takes a legitimate industrial action following a cooling-down period(mediation period).

2) Defensive lockout
A passive and defensive lockout is highly suggested if a counteraction is deemed unavoidable since aggressive and offensive lockouts are unjustifiable. In principle, the law prohibits a preemptive lockout or any measure taken that exceeds a considerable degree in scope and method of the industrial action.
In one particular case, the union demanded a wage increase although the average wage at the company was higher than that of any other competitor company. The result was a breakdown of the wage bargaining process. The union resorted to work-to-rule as an industrial action, which was immediately followed by the employer locking them out. Given that the employer’s lockout occurred only three days after the union’s industrial action, the lockout cannot be justified.

(3) Methods

1) Practical measures
A lockout is not legitimate if only the labor union is notified. Practical measures must be taken by refusing entrance of the employees to the workplace.

2) Applicable to any industrial action
A lockout can be implemented during any industrial action, including slowdown strikes or work-to-rule actions.

3) Partial lockout and general lockout
Industrial actions are actions or counteractions, such as strikes, slowdown strikes, lockouts, and other measures taken by parties to labor relations to achieve their goals. As the labor union is allowed to initiate a general or partial strike, the employer may also choose to execute a general or partial lockout as a countermeasure.

(4) Effects

1) Exempt from obligation to receive labor service and render wage
An employer has the right to refuse to receive labor service from his/her employees during a lockout. In addition, the employer is not obliged to render wage to employees who do not provide labor service due to a lockout, since wage mean remuneration for work. This exemption extends not only to union members subject to lockout but also to all other non-union employees. However, if an employee who is not subject to the lockout provides regular work for the company, contractual wage shall be paid for the service provided.

2) Holidays and leave
As an employer can legitimately refuse to receive labor service from his/her employees subject to the lockout, the statutory holidays and leave according to the Labor Standards Act do not occur.

3) Places off-limits to employees

① Scope of off-limits
A lockout is a refusal to accept labor service in which the employer can prevent employees from entering the workplace by closing the company entrance gates or withdrawing employees from production facilities and precluding their labor service. Accordingly, employees who are noncompliant in leaving the workplace during a legitimate lockout may be subject to the criminal charge “noncompliance with a deportation order,” provided that a lockout is limited to production facilities or office facilities as it merely purports to prohibit employees from production and service. Nevertheless, the employer may allow union members entry to certain facilities necessary for union activities or welfare under rational scope, such as union offices, dormitory, canteen, and other facilities not related to production or work.

② Occupancy and lockout of the workplace
Despite legitimate occupancy of the workplace by employees before the lockout, the employer is given full ownership of the workplace and may request that the employees leave the working facilities during a lockout. Sustained occupancy at this time is illegal and offenders will be subject to the law for noncompliance with a deportation order.

4) Available partial production
An employer does not have to stop production completely even during a lockout and may continue to receive service from employees not participating in strikes.

5) Effects of illegal lockout

① Employees’ entry to workplace
If the employer’s lockout is not legitimate, it is not a crime for the employees to enter the workplace where he/she has usually been permitted to enter, unless there is a special reason not to do so.

② Wage payment during a lockout
In cases where a lockout serves as a measure against the union’s industrial actions(strikes or slowdown strikes), the employer is exempt from the obligation to pay wage. However, in cases of preemptive and offensive lockouts, the wage must be rendered(shutdown allowance).

(5) Reporting

An employer shall, in advance, notify the Administrative Office and the Labor Relations Commission of his intent to begin a lockout. If a lockout is taken without prior notice, the employer may be subject to a fine up to 5 million won(Article 96 of the Trade Union Act). Here, the notice of intent to begin a lockout is not a substantial requirement but a procedural requirement out of administrative necessity. Therefore, failure to report a lockout does not necessarily affect the lockout’s legitimacy.

(6) Cancellation

Industrial action by the union is the preliminary requirement of a lockout, as it is also the conditional requirement to sustain one. If the union decides to return to work, there remains no reason for continuing the lockout. However, if the union’s decision to return to work does not seem genuine and there exists a likelihood of ensuing industrial action, the employer may justifiably prolong the lockout.