Naver union demands integrated bargaining, citing 'real employer' status

The labor union at Naver, South Korea's leading tech giant, is pushing for integrated collective bargaining with the company and its various subsidiaries. The union argues that Naver's headquarters functions as the "real employer," making separate negotiations with each affiliate inefficient and inequitable. This demand comes despite Naver's assertion that it does not "substantially control" its subsidiaries, a claim the union finds contradictory given the company's significant ownership stakes, including 100% ownership of some entities.

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Naver refused the request for integrated bargaining on the evening of the same day the notice was sent, claiming that for legal entities other than the headquarters, it does not 'substantially and concretely control' them and is therefore not in a position to determine labor conditions. How can it respond like this when it owns 100% of some subsidiaries?

Oh Se-yoon, head of the Naver branch of the Korean Chemical and Food Workers' Union, stated that for the past eight years, negotiations have been conducted individually with 16 subsidiaries. However, he noted that these subsidiaries have historically been unable to present independent negotiation proposals without prior agreement from Naver's headquarters. "Even with the enforcement of the 'Yellow Envelope Law,' which provides a legal basis, nothing has improved," Oh criticized, highlighting the persistent issue of headquarters dictating terms.

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For the past eight years, we have conducted individual negotiations with 16 legal entities, including the headquarters and its affiliates. However, subsidiaries have been unable to present independent negotiation proposals before Naver's headquarters reached an agreement.

The union's proposal for integrated bargaining stems from the belief that the current system of individual negotiations does not align with the actual decision-making structure within the Naver group. With over 6,200 union members across 28 affiliates, the union points out that an average of 150 negotiations occur annually across 16 subsidiaries, involving over 100 negotiators on both sides. This process consumes significant time and resources, with negotiation content often being identical across different companies.

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We are currently holding 150 negotiations annually for 16 legal entities, with over 100 negotiators on both labor and management sides dedicating over 1,000 hours each year to negotiations. Yet, the negotiation content is largely the same.

Naver's corporate structure, where it holds substantial stakes in its key affiliates, such as Naver Cloud and Naver Labs (100%), Snow (90%), and Naver Financial (89%), further supports the union's argument. The IT industry's practice of spinning off services into separate legal entities and frequent personnel transfers between them also contributes to the need for unified bargaining. The union argues that this fragmented approach allows management to avoid responsibility for business decisions, leading to disparities in working conditions, such as wage freezes for employees of less profitable services, while executives face no repercussions. Labor committees have previously acknowledged Naver's role as an employer in several rulings, reinforcing the union's position.

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Naver is the top holding company that owns most of the shares in its major affiliates, and its CEO and board members are mostly composed of former Naver or affiliate executives.