Ⅳ. Council Functions

The function of the Council is to promote employee interests and contribute to managerial rationalizations by consulting about specific items between labor and management.

1. Matters subject to consultation

Matters subject to consultation are mainly focused on production and personnel & labor management, and those matters discussed at the meetings of the Council are as follows:

① Productivity improvement and gain sharing
② Recruitment, placement, education and training of workers
③ Handling of worker grievances
④ Improvement of occupational safety and health and other aspects of the work environment and promotion of worker health
⑤ Improvement of personnel and labor management systems
⑥ General rules for employment adjustment, such as assignment and transfer, retraining and dismissal of workers for managerial or technological reasons, etc.
⑦ Administration of working hours and recess hours
⑧ Improvement of wage payment methods, wage structure, wage system, etc.
⑨ Introduction of new machines and technologies or improvement of work processes
⑩ Establishment or revision of rules of employment
⑪ Establishment of employee stock ownership plans and other support for the creation of worker wealth
⑫ Matters concerning rewards given to workers for their work-related inventions, etc.
⑬ Promotion of worker welfare
⑭ Installation of employee surveillance equipment within a workplace; and
⑮ Matters concerning the maternity protection of female workers and support for reconciliation between work and family life.
⑯ Other matters concerning labor-management cooperation


2. Matters subject to Council resolution
The employer shall seek a resolution from the Council on each of the following
① Establishment of basic plans for the education and training and skills development of workers
② Setting up and management of welfare facilities
③ Establishment of an employee welfare fund
④ Matters not resolved by the grievance handling committee
⑤ Establishment of various labor-management cooperative committees.

Matters subject to Council resolution are regulated under the LMC Act to promote the common interests of labor and management through participation and cooperation to prevent the employer from implementing them on the basis of his/her sole judgment.
Meetings shall open in the presence of a majority of worker members and employer members, and resolutions shall be passed by a vote of at least two-thirds of all members present. The matters decided by the Council shall be publicized immediately through company broadcasting, bulletin boards, posting notices and other pertinent methods. The two parties shall be equally responsible for implementing them.

3. Matters to be reported

The employer shall report and explain in good faith at a regular meeting the following:
① Matters concerning overall management plans and results
② Matters concerning quarterly production plans and results
③ Matters concerning manpower plans; and
④ Economic and financial conditions of the enterprise.

If the employer regularly reports and explains the above matters, a mutual trust in information sharing builds easily between labor and management. Thus, the employer shall report and explain matters faithfully and formally. In cases where the employer fails to give reports or an explanation, employee members may request relevant documents, and the employer shall respond in good faith to such requests. If the employer does not submit the appropriate data, he/she may be liable under penalty clauses.

(1) The concrete realm of matters subject to consultation and matters subject to the Council’s resolutions

Matters subject to consultation in accordance with Article 19 of the LMC Act are items to promote the common interests of labor and management, which shall be suggested by one or both parties for consultation and be dealt with by the Council. The concrete realm of matters subject to consultations shall be determined by voluntary discretion of labor and management on the basis of general principles and criteria. Accordingly, the employer shall not have a duty to go through prior consultation with the Council for individual items, such as employment of specific individuals, nor need to issue the council’s resolutions(in accordance with Article 20 of the LMC Act), even though some items for consultation were suggested by either labor, management, or both. The realm of employee training and skill development plans among the matters subject to Council resolution shall be standard plans for yearly training hours, major training items, etc. in general job training, cultural education, and other training related to the employee’s skills training, but does not have to include concrete implementation plans.

(2) The concrete realm of matters subject to consultation shall be determined voluntarily by labor and management. The consultation does not require a precondition for agreement and industrial actions are not allowed in the event of non-agreement.

According to the LMC Act, the concrete realm of matters subject to consultation shall be determined voluntarily by labor and management, but consultation from the Council does not mean its agreement is a precondition and industrial actions are not allowed if there is no agreement from the Council. In cases where Council agreement has been reached(and a resolution passed to that effect) on matters subject to consultation in accordance with Article 19(2) of the LMC Act, both employees and employer shall enforce these matters in good faith in accordance with Article 23 of the LMC Act. If the employer does not implement matters determined by the Council, he/she may be punished under Article 30 of the LMC Act.

(3) On matters subject to consultation, it is enough for labor and management to consult sincerely. The employer does not have to reach agreement with labor or follow the decisions made.

According to Article 19 of the LMC Act, on matters subject to consultation, it is enough for labor and management to consult sincerely. The employer does not have to reach agreement with labor or follow the decisions made. Accordingly, if matters concerning institutional improvement for personnel management are consulted on sincerely, this is enough even though the employer does not follow Council resolutions or agreements.
(4) Whether Council resolutions concerning working condition are as effective as that of the collective bargaining agreement

The purpose of the LMC Act is to promote the common interests of labor and management through their joint participation and cooperation. The LMC Act shall also require establishment of a labor-management council to be able to consult or determine matters concerning personnel and management, excluding matters concerning wages and working conditions subject to collective bargaining. Accordingly, it is taken for granted that matters concerning wages and working conditions shall be determined through collective bargaining. However, if both parties agreed on wages and working conditions in a labor-management council in order to conclude a collective agreement, the Council meeting shall be regarded as part of collective bargaining.

(5) Consultation regarding the number of full-time union officers in a labor-management council is not among the ‘matters subject to consultation with the labor-management council’.

Article 19 of the LMC Act regulates matters to be consulted on by the labor-management council. As paragraph 14(other matters as to cooperation between workers and employers) of Article 19 includes consultable matters other than those stated, the realm of matters shall be estimated individually and concretely, but shall be limited to matters within the purpose and intent of the LMC Act. Accordingly, in accordance with Article 24 of the Trade Union Act, matters related to full-time union officers are matters concerning labor union activities, and consulting on the number of full-time union officers in the labor-management council is not among the ‘matters subject to consultation with the labor-management council’ and does not correspond to the purpose and intent of the LMC Act.
(6) In establishing employee training plans and skill development, seeking a resolution from the labor-management council is required, but this does not mean that a Council resolution is necessary whenever the company implements training and education.

Article 19 and Article 20 of the LMC Act stipulates matters subject to consultation and matters subject to Council resolutions. The matters subject to Council resolutions shall be items that the employer shall consult and determine in the labor-management council in advance, which is distinct from matters subject to consultation not necessarily requiring resolution. Article 20 of the LMC Act requires the employer to seek labor-management council resolution in establishing employee training plans and skill development, but this does not mean that it is necessary to seek Council resolution whenever the company implements training and education. The employer shall sincerely implement the items decided by the Council or else will be fined 10 million won or less. However, there is no penal provision in the LMC Act when the company does not take issue on matters subject to a Council resolution.

(7) Although a matter concerning wages was agreed on by a labor- management council, the decision cannot be effective in accordance with the LMC Act. However, if the matter was concluded as part of a collective bargaining process, it is effective as a collective agreement.

In estimating the content of the Council’s meeting minutes, a certain meeting did not deal with matters subject to consultation stipulated by Article 20 of the LMC Act, but rather dealt with collective bargaining items. Accordingly, the items agreed upon are not effective according to LMC Act. However, if the agreement was concluded as a collective agreement relating to wages, it is effective as a collective agreement.

(8) Employee members of the Council do not have authority to agree to unfavorable changes to working conditions on behalf of other employees.

The labor-management council system is designed to maintain order in the industry by promoting the common interests of labor and management through joint participation and cooperation, which is distinct in purpose from a labor union. Although the company stipulates matters concerning working conditions in the matters subject to consultation, employee members of the Council who were elected by the employees do not have authority to agree to unfavorable changes to working conditions on behalf of other employees.

(9) It is null and void for a labor-management council to agree that the service period for overseas assignments will be exempted from calculation of the total service period.

The consecutive service period to calculate severance pay shall be a period from the first service date to the last day of service. Through mutual agreement in a Council, the service years of employees assigned overseas is regarded as a period included in calculations for interim severance pay and their severance pay will be calculated from the time after the adjustment period of severance pay. Even though the agreement is as effective as a collective agreement, the agreement violates lawthe Labor Standards Actand is therefore null and void.

Ⅴ. Grievance Handling

Grievances refer to individual complaints or difficulties concerning employees’ working environment or working conditions. A grievance is a complaint from an individual employee, which is different from industrial disputes related to collective complaints. Compulsory procedures are established to prevent individual employee complaints from enlarging into collective complaints. They also contribute to building mutual reliability in the process of handling such grievances.

1. Grievance handling representatives

All businesses or workplaces that ordinarily hire 30 employees or more shall have a grievance handling representatives to hear and handle workers’ grievances. There shall be a maximum of three grievance handling representatives, representing labor and management, who shall be elected from the Council members by the Council in a business or a workplace where a Council is established, and shall be appointed by the employer in a business or a workplace where no Council is established. Tenure, status and treatment of grievance handling representatives are the same as those of the labor-management council.

2. Procedures for grievance handling

If a worker has a grievance, he/she may report it to a grievance handling representative verbally or in writing. In this case, the grievance handling representative who receives such a report shall handle it without delay. When a worker takes a grievance to the grievance handling representative, he/she shall be informed of the measures taken and results thereof within ten days by the grievance handling representative. The grievance handling representative shall draw up and keep a ledger relating to the receipt and handling of grievances and keep it for one year.


Ⅵ. Labor-Management Councils and the Labor Union

A labor-management council shall be established in each business or workplace that ordinarily employs 30 employees or more and is vested with the right to decide the working conditions, in accordance with the LMC Act. It refers to the consulting organization designed to promote the welfare of employees and healthy development of the company through joint participation and cooperation. This labor-management council is distinct from a labor union, as a labor union means an organization(or associated organization) of workers, which is formed in a voluntary and collective manner upon worker initiative for the purpose of maintaining and improving their working conditions and enhancing their economic and social status. A labor union can be organized by voluntary decision of the employees in accordance with Article 5 of the Trade Union Act. Also, Article 5 of the LMC Act regulates that collective bargaining of the labor union and other activities will not be affected by the LMC Act.



The four statutory insurances of Korea are employment insurance, industrial accident compensation insurance, national pension, and national health insurance.

1) Employment insurance, started in 1995, is to provide income in case of unemployment, to promote employment, and to help develop vocational skills of employees.
2) Industrial accident compensation insurance, which took effect in 1964, is aimed at supporting employees and their families with costs associated with occupational injury, disease, disability, or death.
3) The national pension plan, which began in 1988, is to provide a pension for people during retirement, invalidity, or death of a spouse.
4) The national health insurance plan, which began in 1977, aims at preventing, diagnosing, and treating people’s injuries and illnesses.