Naver, South Korea’s largest internet platform company, joined the Korea Enterprises Federation (KEF) late last year, according to confirmed reports. It is the first case of a South Korean information technology (IT) company joining the employers’ group, a move that analysts read as an effort to strengthen its labor-management response framework ahead of the enforcement of amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act, known as the “Yellow Envelope Law.” Naver’s union, meanwhile, has formalized a push for unified bargaining across the company’s affiliates, making a shift in the labor-management landscape unavoidable.
According to business circles and Naver on the 12th, Naver submitted a membership application to the KEF late last year and became a full member after board approval. A Naver official said the move was “aimed at expanding cooperation with a range of companies as artificial intelligence (AI) accelerates connections and convergence across industries.”
The industry, however, sees concerns tied to the enforcement of the Yellow Envelope Law as a factor behind the membership, beyond such industrial purposes. The KEF, which has handled labor-management relations on behalf of management, has been composed mainly of traditional manufacturers and large corporations. Big Tech companies such as Naver, which had kept their distance from labor issues, did not take part. But as labor regulations tightened, including the Serious Accidents Punishment Act and the Yellow Envelope Law, winds of change began blowing through the IT industry. In particular, since the Yellow Envelope Law took effect in March, the concept of an employer at a prime contractor has been broadened, and a growing number of affiliate unions are demanding direct bargaining with the headquarters that holds real decision-making power.
Major South Korean platform and game companies operate under a governance structure that places numerous subsidiaries under a headquarters, and individual unions have recently trended toward a joint response rather than negotiating separately. An earlier case in the same vein was the joint response by unions at Kakao’s headquarters and its affiliates to wage and collective bargaining agreements and bonus issues. As labor-management issues expand into social and political matters, companies appear to have concluded that mounting a joint response and public opinion campaign through the KEF is advantageous.
Against this backdrop, Naver’s union is pushing for “unified bargaining across all affiliates.” It argues that subsidiary-level bargaining has clear limits under a structure in which real authority is concentrated at the headquarters. Currently, the 16 corporate entities in the Naver group each conclude and negotiate collective agreements individually. NCSoft is the only IT company that conducts unified bargaining.
Oh Se-yoon, chair of the IT committee of the Federation of Korean Chemical Textile and Food Workers’ Union and head of the Naver chapter, said at a National Assembly forum that day: “At Naver, core management functions such as human resources, public relations, accounting, general affairs and finance are concentrated at the headquarters, so subsidiaries amount to no more than particular departments yet are managed as separate corporate entities.” Oh pointed out that “real decision-making power lies with the headquarters, but the bargaining channel is limited to subsidiary representatives, distorting the bargaining structure.”
The union claims this structure produces enormous inefficiency, including about 150 bargaining sessions and more than 1,000 hours a year, along with advisory fees for each corporate entity. Oh stressed that “unified bargaining is not a demand for special treatment, but simply matching the form of bargaining to a reality that is already run as one.” The Naver chapter plans to hold a ceremony declaring unified bargaining on the 20th and begin full-scale activity.
The union’s demand for unified bargaining is expected to emerge as a key variable in labor-management relations in the IT industry going forward. The Naver Z union is currently conducting individual wage talks at the corporate level, but if unified bargaining materializes, it would expand into a group-wide shared agenda, further strengthening the union’s bargaining power.
Calls for unified bargaining are growing among unions across the IT sector, including the Kakao chapter and game companies, leaving room for the impact to spread across the industry depending on whether Naver accepts the union’s proposal.