I. Introduction
Article 33 of the Constitution guarantees three basic rights of labor to enhance working conditions, and the Labor Union & Labor Relations Adjustment Act (hereinafter referred to as “the Labor Union Act”) was established towards guaranteeing those rights in practical terms. Labor unions and employees are free from civil and criminal liability for justifiable industrial action and shall not be treated unfavorably in personnel management.
Labor unions can acquire better working conditions through collective agreements, and while engaging in collective bargaining with the employer, they can request better wages, working hours, and welfare, etc. At the beginning of collective bargaining, employers often reject union demands because labor costs directly affect overall production costs. Labor unions then collectively refuse to provide labor service in order to achieve their demands, and obstruct normal business operations. The employer counteracts this with the no-pay-no-work principle, which deprives the employees participating in strikes from receiving their wages. This confrontation between labor union and company then leads to conclusion of an adjusted agreement, called the collective agreement.
Here, if the employer is allowed to hire persons unrelated to business operations or use replacements during a period of industrial action – if contracting or subcontracting out is allowed - so as to continue work which has been stopped by that industrial action, a strike will not affect an employer as much as planned and the labor union will be discouraged from going on strike and therefore more easily agree to employer proposals. In order to prevent practical infringement of this right to take industrial action, it is stipulated in the Labor Union Act that hiring new employees or outsourcing jobs which have been interrupted by industrial action is not permitted. Therefore, provisions restricting replacement of workers during strikes are protections designed to maintain the balance of power between the labor union and the employer.
Here, I would like to concretely review the concept and content of these restrictions on the replacement of workers involved in strikes, and essential public services where this replacement is allowed.

II. The Concept of Restrictions on Employee Replacement
Article 43 of the Labor Union Act regulates that no employer shall hire persons unrelated to their business operations, or use replacements during a period of industrial action so as to continue work which has been stopped by industrial action. This includes contracting or subcontracting work out (Paragraph (1) and (2)). Penal provisions are implemented in the event of violations. Article 16 of Act on the Protection, etc. of Dispatched Workers (Employee Dispatch Act) also regulates that a sending employer shall not dispatch an employee to a workplace where industrial action is underway to perform the work stopped due to such industrial action.
The purpose for restricting employee replacement during a period of industrial action is to protect the employee right to strike according to the Constitution, in practical terms. Restrictions on employee replacement are institutional mechanisms designed to guarantee effectiveness of industrial action by a labor union, and are also unavoidable in realizing the principle of equality in collective bargaining. If an employer is allowed to take unrestricted counteraction against a labor union’s industrial actions, those industrial actions lose all effectiveness as a tool for the union to achieve its goals. This is the reason why restrictions are necessary regarding the hiring of persons unrelated to business operations.

III. Scope of Restrictions on Employee Replacement

1. The meaning of “Persons unrelated to business operations”
Judicial rulings on the concept of business generally explain that “business” refers to an independent company organization operating continuously and organically in one managerial body such as an individual business or corporate entity. Subsidiaries within a larger company are considered different businesses. However, a particular company with headquarters in one city and plants or branch offices located in other areas is regarded as one business.
“Person unrelated to business operations” means that persons who are related to business operations can be used as replacements during a period of industrial action. This means that it is possible to continue the work stopped during industrial action, with union members not participating in the strike, non-union members, and other employees who are related to the company’s business operations.

2. Restrictions against hiring new employees
Article 43 (1) regulates that no employer shall hire persons who are not related to that employer’s business operations, or use replacements during a period of industrial action so as to continue work which has been stopped by that industrial action. In this case, there are two representative judicial rulings.
(1) An employer hired new persons before a period of industrial action, with the intent of continuing to perform the work of strikers during the period of industrial action. This case violated Article 43 of the Labor Union Act.
(2) An employer hired new persons gradually to fill vacated positions. Even though these persons were used to continue the work stopped by later industrial action, this replacement was justifiable exercise of the employer’s personnel management rights as they were not hired specifically to replace the workers taking industrial action.

3. Conditions for justification of counteractions by a labor union
Judicial rulings on the conditions for justification of labor union counteractions against replacement by an employer during a period of industrial action can be divided into justifiable replacement and illegal replacement.
(1) The court determined obstruction of business as a violation in cases where the labor union members entirely and exclusively occupied company premises to block the employer’s justifiable replacement for work stopped due to industrial action.
(2) As long as strikers did not use violence or destruction or threatening actions to block an employer’s illegal replacement of workers to continue work stopped due to industrial action, the court ruled that considerable counteractions are acceptable.

4. Applicability to illegal industrial action
The provision placing restrictions on replacement may be applicable to justifiable industrial action only. Since there are provisions protecting labor union members from civil and criminal charges during industrial action according to the Labor Union Act, the employer can continue business operations by using replacements to do the work stopped due to illegal industrial action. That is, an employer can hire new persons or use employee replacements to prevent damage caused by a labor union’s illegal industrial actions.
However, in reality there are many cases where determining whether industrial action is justifiable or not is complicated and cannot easily be determined outside of a courtroom. In cases where an employer hires new persons or uses as replacements those unrelated to business operations on the assumption that a strike is illegal, this can infringe on a labor union’s right to take industrial action. Therefore, employee replacement should be prohibited in principle in cases where the justification for industrial action is unclear, but used in cases where the industrial action clearly has no justification.

5. Prohibition against contracting or subcontracting work out during periods of industrial action
Article 43 (2) of the Labor Union Act makes it very clear that no employer shall, during a period of