Hyundai Steel, Hanwha Ocean Ordered to Recognize Subcontractor Unions Under "Yellow Envelope Law"

The Hankyoreh reports on a significant victory for labor unions in South Korea, particularly concerning the "Yellow Envelope Law." This law, officially the revised Act on the Establishment of Labor Unions and the Adjustment of Labor Relations, aims to hold primary contractors responsible for unfair labor practices by subcontractors.

The recent rulings by the Incheon and Gyeongnam Regional Labor Relations Commissions are a major step forward. For Hyundai Steel, its subsidiary Hyundai ITC has been recognized as a separate bargaining unit, and the primary contractor's responsibility for its workers has been affirmed. This means Hyundai Steel must now directly negotiate with the unions representing workers from its subsidiaries and subcontractors, a long-sought goal for labor activists.

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The fact that the bargaining methods for subsidiaries and subcontractors differed based on the upper organization (separation of bargaining units), and that subcontracting unions work under the same labor environment as subsidiaries and under Hyundai Steel's direction (user status), was explained to the Labor Relations Commission.

Similarly, at Hanwha Ocean, the labor commission has recognized the user status of the company concerning its outsourced cafeteria and facility management services. This implies that Hanwha Ocean must now engage in direct negotiations with the union representing these workers, not just the shipbuilding subcontractors. This ruling broadens the scope of the Yellow Envelope Law's application beyond direct production workers.

These decisions are crucial because they challenge the traditional corporate structure in South Korea, where large conglomerates often shield themselves from direct labor disputes by using complex webs of subsidiaries and subcontractors. The "Yellow Envelope Law" and these commission rulings aim to break down these barriers, forcing primary contractors to take more direct responsibility for the working conditions and labor rights of all workers involved in their production processes. The Hankyoreh, known for its progressive stance, highlights this as a win for labor rights and a potential shift in the power dynamics between big business and workers in the country.

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Given that Hanwha Ocean has disposal rights over the facilities where Weliv workers work, there is a clear dependency. Hanwha Ocean can influence the working conditions of Weliv workers by deciding dispatch routes and meal times, so the Weliv union must also negotiate directly with Hanwha Ocean.