South Korea’s annual summer labor struggle is arriving earlier than usual this year. The implementation of the so-called “Yellow Envelope Act” has triggered a surge in collective bargaining demands from subcontractor unions targeting prime contractors, while tensions over bonus distribution have raised the prospect of strikes at major conglomerates, creating widespread friction across the industrial sector.
A union flag hangs at Samsung Biologics’ plant in Yeonsu-gu, Incheon, on April 30, a day before the union’s strike. Yonhap News
According to industry and labor sources Thursday, the labor union at Samsung Biologics (207940.KS) launched a full-scale strike Thursday through Monday. The five-day walkout follows a partial strike that began April 28, after mediation by the Ministry of Employment and Labor failed to bridge gaps between the union and management. The union is demanding the elimination of wage disparities within the group and the establishment of clear personnel policies. It marks the first strike since the company’s founding in 2011.
At Samsung Electronics (005930.KS), the union and management also remain at odds, with the union demanding that 15 percent of operating profit be paid out as bonuses without a cap. A general strike has been scheduled from May 21 through June 7. A rally held in front of the Pyeongtaek plant on April 23 drew 40,000 union members in a show of force.
While compensation is the flashpoint for labor-management disputes at major conglomerates, tensions between prime contractors and subcontractors surrounding the Yellow Envelope Act — a revision to Articles 2 and 3 of the Trade Union Act — are escalating on another front. According to data obtained by Rep. Kim So-hee of the People Power Party from the Ministry of Employment and Labor, 332 disputes related to prime-subcontractor bargaining had been filed with the Labor Relations Commission as of April 29. The legal revision now obligates prime contractors that exercise effective control over subcontractor workers’ labor conditions to engage in bargaining.
In the roughly one month since the law took effect, 1,091 subcontractor unions representing about 151,000 members approached 403 prime contractors seeking negotiations, but only 37 prime contractors formally accepted the requests.
In response, the Korean Confederation of Trade Unions (KCTU) has set July 15 as the date for a general strike and plans to mount a large-scale pressure campaign. Jeon Ho-il, spokesperson for the KCTU, said prime contractors appear willing to engage in legal battles even after decisions by the collective bargaining review support committee, and signaled an aggressive struggle against companies that refuse to negotiate.
Tensions also remain between prime contractors and special-type workers such as truck drivers and parcel delivery workers. Bargaining demands have poured in simultaneously at major logistics hubs including Coupang Logistics Services (CLS), CJ Logistics, Lotte Global Logis, Hanjin, Logen, and Korea Post’s parcel service, but disputes persist as labor and management offer conflicting legal interpretations of “effective control.”
Jeong Heung-joon, a professor of business administration at Seoul National University of Science and Technology, said, “Friction is inevitable during the settlement process when a new system is introduced,” noting that labor activism is unfolding earlier than in previous years.