II. Essential Public Service and Minimum Services to be Maintained

Article 71 (Scope of Public Services, etc.)
① “Public service” under this Act means a service described in any of the following subparagraphs, which is indispensable to the daily lives of the general public or has great influence on the national economy:
1. Regular line public transportation services;
2. Water, electricity, gas supply, oil refinery and supply services;
3. Public health and medical services and blood supply services;
4. Banking and mint services;
5. Broadcasting and telecommunication services.
② “Essential public service” under this Act means any service described in the following subparagraphs, which falls within the category of public services under paragraph (1) and whose stoppage and discontinuance may endanger the daily lives of the general public, or may undermine the national economy considerably, and whose replacement presents a grave hardship:
1. Railroad services, inter-city railroad services, and aviation services;
2. Water, electricity, gas supply, oil refinery and supply services;
3. Hospital and blood supply services;
4. The Bank of Korea;
5. Telecommunication services.

Article 42-2 (Restrictions on Industrial Action in Minimum Services to Be Maintained)
① The term “minimum services to be maintained” in this Act refers to those services among essential public services prescribed in Article 71 (2), which, if suspended or discontinued, could remarkably endanger the lives, health, physical safety or daily lives of the public and are prescribed by Presidential Decree.
② No act of stopping, discontinuing or obstructing the proper maintenance and operation of the minimum services to be maintained shall be carried out as legitimate industrial action.
Article 42-3 (Agreement on Minimum Services to Be Maintained)
Article 42-4 (Decision on Maintenance and Levels of Operation of Minimum Services to Be Maintained)
Article 42-5 (Industrial Action by Decision of Labor Relations Commission)
Article 42-6 (Designation of Workers for Minimum Services to Be Maintained)
Article 43 (Restriction on Hiring by Employer)
① No employer shall hire persons who are not related to their business operations, or use replacements during a period of industrial action so as to continue works which have been stopped by industrial actions.
② No employer shall, during a period of industrial action, contract or subcontract out work which has been suspended because of the industrial action concerned.
③ The provisions of paragraphs (1) and (2) shall not apply to the employer of essential public services who hires persons unrelated to the business concerned or use replacements, or contract or subcontract out the work only during a period of industrial action.
④ In the case of paragraph (3), an employer may hire or use replacements or contract or subcontract out the work as long as the proportion of the replacement workers do not exceed 50/100 of strike participants of the business or workplace concerned. In this case, method to calculate the number of strike participants, etc., shall be prescribed in the Presidential Decree.



1. Essential public service and minimum services to be maintained

Article 71 (2) of the Trade Union Act refers to “essential public service” as meaning any service described in the following subparagraphs, which fall within the category of public service under paragraph (1) and whose stoppage and discontinuance may endanger the daily lives of the general public, or may considerably undermine the national economy, and whose replacement presents an undue hardship.1. Railroad services, inter-city railroad services, and aviation services; 2. Water, electricity, gas supply, oil refinery and supply services; 3. Hospital and blood supply services; 4. The Bank of Korea; 5. Telecommunication services.

Prior to 2008, in a case involving a essential public service, the right to strike was totally limited through arbitration by a special labor commission. As a complementary measure, the Trade Union Act introduced on January 1, 2008 abolished the arbitration system for mandatory public services and instead introduced a mandatory maintenance service system for essential public services. Ministry of Employment and Labor, “Explanation of Operations for Minimum Services to be maintained” Nov. 2007.


The Trade Union Act stipulates that the term “minimum services to be maintained” in the Act refers to those services among essential public services prescribed in Article 71 (2), which, if suspended or discontinued, could remarkably endanger the lives, health, physical safety or daily lives of the public and are prescribed by Presidential Decree (Article 42-2, paragraph 1). Furthermore, stopping, discontinuing or obstructing the proper maintenance and operation of the minimum services to be maintained shall not be carried out as a legitimate industrial action (Article 42-2, paragraph 2). If violated, prison for up to 3 years or a penalty of up to KRW 30 million could be imposed (Article 89, paragraph 1). The parties to labor relations shall conclude an agreement in writing that stipulates the levels of minimum services to be maintained and provided, the specific work designated as minimum service, the necessary number of workers, etc., in order to ensure the proper maintenance and operation of minimum services during a period of industrial action. In this case, both parties shall sign or seal an agreement on minimum services to be maintained (Article 42-3). Therefore, unions will be held liable for illegal disputes in cases where they do not engage in agreement on minimum services to be maintained. Moon, Moo-gi, “The scope of minimum services to be maintained during strikes”, 「Labor Review 」 26, Korea Labor Institute, Jan. 2007, p. 38.


2. Criteria for classification of essential public service Ministry of Employment and Labor, “Explanation of Operations for the Minimum Services to be maintained” Nov. 2007, p. 7-9.


In order for a specific business to be an essential public service in the interpretation of the provisions related to the Trade Union Act, (i) the public service pursuant to Article 71 (1) of the Act shall meet the formal requirements under the provisions of Article 71 (2); (ii) the suspension or abolishment of the work shall have substantial repercussions that significantly jeopardize the daily lives of the public or that significantly impede the national economy and are not easily replaceable.
Formal requirements are in accordance with Annex 1 of the Enforcement Decree to the Trade Union Act: Each minimum service to be maintained per essential public service. Substantive requirements are: (i) to become an essential public service, the suspension or abolishment of work due to industrial action must seriously endanger the daily lives of the public or hinder the national economy; (ii) since the suspension or abolishment of such service should concern a business having a large effect on the daily lives of the public or the national economy, the service, the production scale of the goods, and the service supply target should be targeted to the general public; (iii) the substitution of workers should not be easy, so that it is difficult to substitute other similar companies in consideration of production and service scale. In other words, if a substitute can easily be accomplished through canceling an outsourcing contract, it should be considered that there is a possibility for substitution.

Therefore, whether the service is an essential public service or not is decided with the following condition: it should meet both of the formal and substantial requirements mentioned above.

3. Employee Replacement for Essential Public Services

(1) Concept

Article 43 (3 and 4) of the Trade Union Act regulates that the provisions of paragraphs (1) and (2) shall not apply to an employer of essential public services who hires persons unrelated to the business concerned or uses replacements, or contracts or subcontracts out the work only during a period of industrial action. In this case, the employer may hire or use replacements or contract or subcontract out the work as long as the proportion of the replacement workers does not exceed 50/100 of the strike participants of the business or workplace concerned (implemented January 1, 2008).

(2) Requirements

Essential public services are those public services where stoppages and discontinuance may endanger the lives of members of the general public, or considerably undermine the national economy, and whose replacement presents undue hardship: 1. Railroad services; 2. Water, electricity, gas supply, oil refinery and supply services; 3. Hospital services; 4. The Bank of Korea; and 5. Telecommunication services. Since compulsory mediation for essential public services has been abolished, all personnel filling jobs in essential public services (besides the minimum to be maintained) are entirely permitted to take industrial action. However, in order to protect the public interest, partial employee replacement is permitted as long as the number of replacement workers (who can be new hires, existing workers, or workers used by a company receiving a contract or subcontract for the work) does not exceed 50/100 of the strike participants of the business or workplace concerned.

(3) Effect

In cases where industrial action is taken in essential public services, employee replacement is permitted on a limited basis to positively minimize the risk to the general public or the national economy. These exceptions, such as the minimum services to be maintained and permitting employee replacement, were introduced in return for abolishment of the mandatory mediation system and as a way to provide a balance between labor protections and the public interest. Hyungbae Kim, Jisoon Park, 『Lectures on Labor Laws』, 4th ed., 2015, Shinjosa, p. 567.


4. Determining whether or not the parcel delivery service of the Post Office is an essential public service

Since the postal service of the Post Office is regarded as an essential public service, the parcel delivery service can be regarded as a minimum service to be maintained in an essential public business. It is necessary to examine whether the parcel delivery service is in fact a minimum service to be maintained for fear of jeopardizing the daily life of the people.

The work of the Post Office is an essential public service. There could however, be different views on whether or not the Post Office’s parcel delivery service is also an essential public service. If it belongs to an essential public service, its labor union is restricted in its right of collective action as a union, should secure minimum services need be maintained.

The Post Office is considered part of the telecommunication business as an essential public service and corresponds to the minimum services to be maintained. According to Annex 1 of the Enforcement Decree (Minimum Services to be Maintained per Essential Public Service): "C. Universal postal services in accordance with Article 14 of the Post Service Act; D. Extra postal services in accordance with Article 15 of the Post Service Act, such as content-certified mail and special delivery service.” Here, the universal postal service is composed of "① a letter-post item, which weighs not more than two kilograms; ② a postal parcel, which weighs not more than 20 kilograms."

In Article 1-2 of the Post Service Act, the term "letter-post items" means any item of delivery intention such as a letter, currency (including a remittance notice) and small packet items. The term “postal parcel” means a package which contains items other than letter-post. At one time the majority of postal delivery service was correspondence, but recently, small parcel delivery has been increasing rapidly. Nonetheless, even if there are a large number of postal parcels in everyday mail, this is directly serving the people, and since it is impossible to substitute the postal services, they must be recognized as an essential public service. Moon, Moo-gi, “A study on the situation of public services and the scope of minimum services to be maintained”, Researcher: The Korean Labor Institute, Ministry of Employment and Labor, Nov. 2006.


However, recently many private parcel delivery companies have engaged in delivery service, and people now have a choice of delivery companies. In particular, parcel delivery personnel in the Post Office are commissioned only for the delivery of postal parcels. Therefore, as parcel delivery service is very easily replaced by other private companies, it is hard to designate the postal parcel delivery service as an essential public service.


[Case Study]

An Airline Labor Union Improves Working Conditions


1. Introduction

As a labor attorney, I have usually represented companies on labor issues, but recently I was asked to provide some consulting by a labor union (hereinafter referred to as “the Union”). This particular union is composed of employees of a foreign airline (hereinafter referred to as “the Company”) and was established in April 1989, surviving simply as an entity without a collective agreement for the past 25 years. As soon as the Union was established, the company had treated the Union chairman so disadvantageously (such as moving him from the Seoul office to a workplace at the airport) that he was obliged to resign. In addition, the Union was unable to carry out its duties due to the headquarters’ continuous habit of disadvantaging all succeeding union officers. Although Union members’ salary was superior to that of employees at other airlines in the beginning, their salary increases had not kept pace with their peers’ at other airlines. Through 10 months of collective bargaining, the Union was able to improve its working conditions, including salaries, with the assistance of a professional (this labor attorney) through legal advisory consulting.

This article will describe how the Union concluded a successful collective agreement, and dealt with major issues.


2. Company Handling of the Union

(1) Company refusal to recognize the Union

The Company refused to recognize the Union entity, and shut down attempts at collective bargaining by creating an atmosphere of insecurity for Union members and treating them unfavorably. Some of the details are listed below.

1) When the Union was established in 1989, the Company moved its new Union chairman from the head office in Seoul to the airport branch office, without a promotion or salary increase, after which the Union chairman decided to resign.

2) Between 2009 and 2012, the branch manager emailed Union members at “director” level (a Korean employment rank designation) and threatened them as pressure to withdraw their membership from the Union. This included public orders to withdraw their membership during wage bargaining meetings, which resulted in several directors withdrawing their union membership. As an explanatory side note, although their Korean title was “Director”, they did not have any practical management authority over lower-ranking employees, and just worked as “persons in charge”. Their English title was still “Employee”: only those with the Korean rank of “Manager” could use their Korean titles in English, as they had actual management authority (Manager = Team leader = Department head). “Director” was simply a title given to recognize their age and their long service.

3) The branch manager also included threats during labor-management council meetings or the wage bargaining table, saying repeatedly “My company’s wage level is inferior. If you don’t want to work for that wage, then quit.” This prevented any effective bargaining with the employer.

4) The company also constantly reminded employees through various department heads and the branch manager’s secretary, of its intention to disadvantage any union members refusing to obey company policy. Together, this kind of environment cowed the Union members against pursuing a collective agreement.


(2) Disadvantageous changes in working conditions

1) Wage cut: The Company unilaterally cut out almost 1/3 of its regular bonus in 2009 (normal bonuses equaled 650% of normal salary, but only 450% was paid out that year). Although the Company informed the Union chairman and Union officers in writing in February 2009, the Company designated a particular Union member to sign the agreement, completely ignoring the Union chairman, and used this “agreement” to make the unilateral cut in May of the same year.

2) Unpaid incentive (in 2012): The Company paid incentive bonuses every year in the past when it reached its corporate targets. However, although the Company reached its 2012 targets, no incentive bonus was paid, nor any explanation given.

3) Changing menstruation leave from paid to unpaid leave (from 2009): Prior to 2009, the Company had paid menstruation leave allowances to women, but changed this to unpaid leave without collective consent or Union agreement.

4) Unilateral reduction of sales allowances for sales department employees: Sales employees had received 450,000 won in sales allowance every month, but in 2009, the Company reduced this sales allowance to 350,000 won without notification or explanation to the sales department. It was again unilaterally reduced to 250,000 won in 2012. Unilaterally changing a long-running sales allowance twice is a disadvantageous change of working conditions.


3. Details of Collective Bargaining

(1) The Company’s attempts to evade collective bargaining

The Union requested collective bargaining in January 2014, and at the first meeting on February 10, 2014, demanded a collective bargaining schedule. The Union also handed over a draft of the collective bargaining demands, without response from the Company. The Union sent two reminders in writing, but still no response. Then, suddenly, the Korean branch manager (a non-Korean) returned to his home country without notifying the Union of any bargaining schedule. It is assumed that this was part of the Company’s strategy to maintain the existing situation and avoid making a collective agreement.

(2) Inducing the Company to engage in collective bargaining through Ministry of Employment and Labor authority

When the branch manager returned to his home country in March 2014, the Union decided to exercise its rights guaranteed by the Constitution to force the Company to the bargaining table, and began lawsuit proceedings with the Ministry of Employment and Labor regarding the Company’s unfair labor practices and violations of the Labor Standards Act.

The purpose of the suit was to retrieve the illegally reduced wages, and continue to work out collective bargaining with the Company. The Company’s former branch managers were required to attend the Labor Office investigations, coming to realize the power of the Union for the first time. After two months of investigations, in July 2014 the Company had to return the unpaid wages, and also the additional 200% of the regular bonus that was deducted illegally. As the Union accepted the payment of the retroactive wages and trusted the Company’s verbal promise to engage in collective bargaining, the Union withdrew the suit it had filed against the Company.

(3) Concluding a collective agreement through the Labor Relations Commission

The Company appointed the Busan branch manager as its representative negotiator and began to negotiate a collective bargaining agreement with the Union in July 2014, meeting 8 times up to September 23. However, the Company continually rejected any other working conditions except those agreed on in the rules of employment, claiming that the collective bargaining draft contained so many articles that infringed on Company personnel and management rights. On top of this, the Company also pushed to lower the current working conditions in return for increasing salaries.

The Union decided that this kind of collective bargaining would yield nothing in the way of better working conditions, and on September 25, 2014, applied to the Labor Relations Commission for adjustment of labor disputes towards obtaining the official right to strike (case number: NLRC 2014 mediation 99).

The Labor Relations Commission assigned this case to the Special Mediation Committee of the National Labor Relations Commission for 15 days, as the Company belonged to the public services industry as an aviation service and had workplaces in several cities (Seoul, Busan, Incheon etc.). The Special Mediation Committee held its first investigation meeting on September 29, 2014, and then held a preliminary mediation hearing for 4 hours on October 7. The Company had stubbornly rejected the Union’s proposals, but displayed serious concerns at the present situation which could lead to a strike by the Union. Although the Company began negotiating more actively than previously, the parties could not reach agreement within the permitted mediation period of 15 days due to the wide gap in their viewpoints.

The Company and the Union agreed to extend the mediation period and an additional 15 days were permitted. The Union focused on obtaining Company recognition of itself and recovering the unfavorably-changed working conditions rather than striking. Labor and Management made the most of the mediation period, intensively negotiating a final agreement on changes related to 28 of the 60 articles in the first collective agreement draft. Both parties submitted the agreed draft to the Special Mediation Committee which in turn accepted it, making the collective agreement official.


This successful outcome was possible thanks to two distinctive factors: (1) the two parties were required to attend the compulsory mediation hearings held by the Labor Relations Commission; (2) three commissioners from the Special Mediation Committee worked hard with labor and management in the process of reaching agreement. If the commissioners had been unsuccessful in persuading the employer, concluding a collective agreement would have been impossible with a company that thought the Union was an organization to be under its control.


4. Evaluation and Lessons

(1) Evaluation

One of the most significant outcomes for the Union was successful conclusion of a collective agreement, something it had not had in its 25 years of existence. Although the collective agreement contained only 28 of the original 60 articles, the Union was recognized as a real entity through it, and obtained the legitimacy and power to negotiate with the Company as an equal bargaining party concerning the determination of terms and conditions of employment. The details of what was obtained in this collective bargaining include a Union office, paid time-off for full-time Union officers, and an equal number of labor and management representatives in the disciplinary action committee. The improved working conditions included restoration of the original sales allowances, restoration of the paid menstruation leave, and stipulations in the collective agreement protecting working conditions that had been previously obtained. As the structure for wage agreement and general collective agreement bargaining was also established in the first collective agreement, the Union now has the knowledge and recognition of its authority needed to negotiate improvements to working conditions.

(2) Lessons

Article 32, Paragraph 3 of the Korean constitution stipulates, “Standards of working conditions shall be determined by Act in such a way as to guarantee human dignity.” Out of this article came the Labor Standards Act. Here, if the Labor Standards Act existed without the Trade Union Act, improving working conditions would be difficult as employers usually pursue profit over worker benefits. Enhancing working conditions is the reason why the Trade Union Act guarantees three rights for labor: association, collective bargaining, and collective action. Through exercise of these three rights guaranteed by the constitution real working conditions can be improved, based upon mutual determination of working conditions where labor and management can negotiate on equal footing.

5. Conclusion

The foreign airline’s labor union had simply existed without a collective agreement for 25 years, and was unable to represent its members effectively or act collectively towards improving their working conditions. However, through the process of concluding a collective agreement this time, they understood the importance of exercising their three rights of labor in the workplace, and also restored the Union’s real functions and at the same time achieved the power to protect their working conditions through a collective agreement achieved by collective bargaining. It is my hope that this Union will maintain the solidarity that its members showed throughout the collective bargaining process and protect its members’ job security, while also improving their relatively lower wage levels and working conditions when compared to other airlines.