Criteria and Methods for Selection of Employee Representatives

I. Introduction
I received questions regarding the selection of employee representatives from Company D, for whom collective bargaining negotiations are underway. Company D is a manufacturing enterprise with a workforce consisting of 50 production workers and 30 office workers, totaling 80 employees. There are two labor unions composed of production workers only, with the majority union, Union 1, consisting of 30 members, and a minority union, Union 2, consisting of 20 members. Union 1 serves as the negotiating representative union. Despite not being a majority union, the chairman of the minority union, Union 2, has garnered support from a significant number of clerical workers and is acting as an employee representative in the labor-management council.
The company needed a written agreement with the employee representative regarding working on holidays and taking time off on “substitute holidays” instead. The first question raised by Company D is whether the employee representative in the labor-management council (representing Union 2) can be the party with whom an agreement can be reached on changes to the substitute holidays. The company has announced the selection of an employee representative for the purpose of substituting holidays for all employees. In response, the Chairman of Union 2, upon seeing the company's request for the appointment of an employee representative, obtained the consent of a portion of its own members (it did not include any members of Union 1) and some white-collar workers through a consent form circulated among the employees, which received majority consent. The second question is whether the current employee representative in the labor-management council can be recognized as the party with whom a written agreement can be made regarding the substitute holidays, based on the consent form that obtained the consent of the majority of employees. In relation to this, I will examine specific criteria and provide an answer.

II. Validity of Employee Representative Selection
1. Reasons to Select an Employee Representative
While individual working conditions are determined by employment contracts, the determination of collective working conditions shall follow the principles in the Labor Standards Act regarding equal decision-making between labor and management. According to Article 4 of that Act, "Working conditions shall be determined through free and voluntary agreement between workers and employers, on the basis of equality." Based on this principle, changes in collective working conditions require written agreement of the employee representative. An “employee representative” refers to a labor union organized by the majority of employees in cases where such a labor union exists, or an individual representing the majority of employees if there is no labor union representing the majority of employees.
Specifically, the role of an employee representative under the Labor Standards Act can be divided into three categories. First, when employers seek to change statutory working hours according to the Labor Standards Act and implement flexible, optional or discretionary working hours, compensatory leave, or alternative paid leave, they are required to obtain written agreement of the employee representative. Unilaterally changing the statutory working hours (40 hours per week, 8 hours per day) by the employer can lead to criminal punishment. However, if written agreement is obtained from the employee representative, there will be no criminal punishment.
Second, for management layoffs, employers are required to engage in prior consultations with the employee representative. “Management layoffs” refer to cases where the company undergoes restructuring due to unavoidable business difficulties, without fault on the part of the employees. When implementing management layoffs, employers must notify the employee representative 50 days in advance, make efforts to avoid layoffs, and engage in sincere consultations regarding the employees to be laid off. The consultation process with the employee representative is a critical requirement for justifying the legitimacy of management layoffs (Article 24 of the Labor Standards Act).
Third, when making adverse changes to working conditions stipulated in the rules of employment, the consent of a majority of employees is necessary. In the case we are discussing herein, the consent of the employee representative representing the majority of employees is necessary. Changes to working conditions that do not receive consent of the employee representative shall be legally ineffective (Article 94 of the Labor Standards Act).

2. Ministry of Employment and Labor (MOEL) Guidelines and Precedents Related to Selection of an Employee Representative

(1) MOEL Guidelines
Under the Labor Standards Act, “employee representative” refers to an entity/individual representing the majority of employees within a specific business or workplace unit. Therefore, in principle, the employee representative shall be elected for the entire business. However, if certain provisions apply to specific occupations or job categories, solely basing selection of the employee representative on the entire workforce of the business might fail to adequately represent the interests of the affected employees. In regards to the "majority of employees in the business or workplace" mentioned in Article 94 of the Labor Standards Act concerning changes to rules of employment, the Supreme Court has stated that "if the adverse changes to the rules of employment only affect a specific group of employees and do not apply or are not expected to apply to other employee groups, then only the affected employee group becomes the subject of consent for the changes to the rules of employment." Therefore, when introducing flexible working hour systems limited to specific occupations or job categories (such as facility workers), it would be permissible to select an employee representative who represents the majority of employees within that specific occupation or job category. The employee representative in such cases should be elected or determined through democratic methods such as voting or polling, involving the participation of a majority of employees in that occupation or job category.

(2) Related Precedents
1) When multiple employee groups are part of a single system of working conditions and even if only one employee group directly suffers from the adverse changes to the rules of employment, if application of the changed rules is expected to affect other employee groups, both the directly affected employee group and the employee groups that can anticipate future application of the changed rules become the subjects of consent. However, if the working conditions are differentiated, and the changed rules only apply to specific employee groups, resulting in direct disadvantages for those specific employee groups, without anticipation that the changed rules will apply to other employee groups, only the disadvantaged employee group(s) become the subject of consent.
2) In a case where a hospital laid off employees ranked 4th grade or higher, the Supreme Court stated that "when a hospital seeks to downsize primarily employees of 4th grade or higher, it is also necessary to engage in consultations with the employee representative who can represent the interests of the employees in that rank. In this case, the employee representative claiming to have engaged in consultations regarding the layoffs consists mostly of employees ranked 5th grade or lower, temporary employees, and non-administrative staff, and since the majority of union members in the labor union, composed mainly of employees ranked 5th grade or lower, are not the target of layoffs and have little connection to the layoffs, it is unreasonable to consider the selection of the employee representative as fair."
3) The Seoul Administrative Court determined that "if an employer intends to carry out layoffs targeting only certain ranks of employees, unless there are exceptional circumstances otherwise, they shall engage in consultations with a representative who can represent the affected employees. It is not permissible to engage in consultations with a labor union that lacks representativeness. If interpreted differently, it would result in entrusting the fate of certain employee groups to individuals who cannot adequately reflect the opinions and interests of those certain employee groups."

III. Validity of Method Used in Selecting an Employee Representative

1. Principles of Employee Representative Selection
If there is a labor union representing the majority of employees, that union becomes the employee representative. If there is no labor union representing the majority of employees, an individual shall be chosen who represents the majority of employees. Therefore, in cases where a majority labor union does not exist, a separate election shall be held to select an employee representative who represents the majority of the employees. Labor laws do not provide any specific regulations regarding the election of such an employee representative. Therefore, a fair procedure is necessary to adequately reflect the intentions of the employees in the respective business or workplace. Such a procedure shall involve a democratic election method that obtains the support of the majority of employees and does not allow for employer appointment or nomination.

2. Precedents regarding Selection of an Employee Representative
1) Selection of an employee representative shall follow a collective decision-making method, such as an election (including a meeting-based approach). The election of an employee representative shall be determined through an appropriate method (including anonymous voting) that allows individual employees to freely express their opinions in a meeting where employees gather in the same location. The elected individual, chosen by the majority of employees based on the results of such a process, shall be appointed as the employee representative.
2) Selecting an employee representative through individual circulation and signing cannot be considered a valid election method. However, in exceptional cases where employees are dispersed across multiple workplaces or when it is not feasible to hold elections or meetings at the same location, a method where employees freely nominate employee representatives by workplace or department and consolidate those nominations is permitted.
3) In cases where a majority labor union does not exist, designating labor-management council workers as employee representatives without a separate election procedure is not recognized. This is because the labor-management council serves a different legal purpose, with limited decision-making authority, while the flexible working hour system performs functions related to determining employment conditions.

IV. Answers to Questions Regarding Employee Representatives
1. Can labor-management council representatives serve as workplace employee representatives?
The purpose of a labor-management council is to promote the common interests of labor and management through participation and cooperation, but it does not involve making decisions regarding employment conditions (Article 1 of the Act on the Promotion of Employees’ Participation and Cooperation). Therefore, a labor-management council representative cannot be considered as delegated with the authority of a workplace employee representative, such as the power to change substitute holidays. Consequently, the consent of the majority of employees cannot be equated with consent for changes in employment conditions by a labor-management council representative.
If the exercise of employee representative authority is explicitly specified and communicated in a manner that is easily recognized by the employees, such as through prior notice and public disclosure of the fact that the elected labor-management council worker will exercise employee representative authority, then that labor-management council worker can be considered an employee representative. In the case of Company D's labor-management council, however, there was no such prior notice during the selection of labor-management council workers, and therefore, they cannot serve as workplace employee representatives.

2. Is the employee representative selection method lawful?
Company D announced the need for a workplace employee representative to change paid holidays to substitute working days and requested that an employee representative be selected from among all employees. In response, the chairman of a minority labor union reported to the company that it was the employee representative based on written consent obtained from the majority of employees through a circulatory process. The question pertains to the legality of the employee representative selection method.
Administrative interpretations suggest that when there is no labor union organized by a majority of employees, the appointment process and method for the individual representing the majority of employees should be communicated to all employees, allowing for a voluntary and democratic selection process that does not restrict the participation of other candidates and recognizes the majority representation of employees.
In this case, the workplace has a primary labor union, and negotiations between the primary union, representing union members' employment conditions, and the employer are ongoing. However, in the current situation, the labor-management council's employee representative violated the selection procedure by obtaining and submitting a circulatory consent form secretly, without undergoing a transparent opinion-gathering process. Therefore, that person cannot be recognized as an employee representative.

V. Conclusion
The employee representative system is an important mechanism that limits unilateral decision-making by employers regarding employment conditions in workplaces where there is no labor union representing the majority of employees. However, the current employee representative system is temporary and lacks guarantees for the position of employee representatives. Additionally, no specific methods for the selection process of employee representatives have been provided, causing confusion in workplaces. Therefore, there is a need for institutional improvements in the operation, term assurance, and permanent establishment of the employee representative system. We hope that through improvement of the employee representative system, the fundamental principle of equal decision-making on employment conditions, as stated in the Labor Standards Act, can be realized in all workplaces.