Contributed By Yoon & Yang LLC (Seoul - HQ)
Article 2.4 of the Trade Union and Labor Relations Adjustment Act (the “Trade Union Act”) defines a trade union (ie a labour union) as “an organisation or associated organisations of employees, which is formed voluntarily and collectively upon the employees’ initiative for the purpose of maintaining and improving their working conditions and enhancing their economic and social status”. However, such organisation or associated organisations of employees are not considered as a trade union if (i) an employer or other person who always acts in the interest of the employer is allowed to join, (ii) most of the union’s expenditure is funded by the employer, (iii) its activities are only aimed at mutual benefits, moral culture and other welfare undertakings (as opposed to enhancing employees’ working conditions), (iv) those who are not employees are allowed to join the union, or (v) the main purpose of the union is to engage in political activities.
The most important function and role of a trade union is engaging in “collective bargaining” with the employer and thereby executing a “collective agreement” in order to foster enhancement and preservation of employees’ working conditions (see Articles 29 and 31 of the Trade Union Act).
In addition, trade unions may engage in “collective actions” in order to carry through with their positions in a dispute against the management arising from disagreements concerning working conditions (see Articles 2.5 and 2.6 of the Trade Union Act).
Article 29 of the Trade Union Act confers the representative of a trade union with the authority to bargain and enter into a collective agreement with the employer on behalf of the trade union and its members. Hence, any bylaws or internal regulations applicable to trade unions that limit the foregoing authority of a trade union’s representative are deemed invalid.
Neither the Trade Union Act nor any relevant laws provide for methods of appointing or electing a representative for a trade union. Therefore, methods and procedures for appointing or electing the trade union representative can be determined through bylaws or internal regulation of the trade unions, and the trade union representative should be appointed or elected accordingly.
Collective agreement refers to a written agreement that entails terms on working conditions (eg wages, working hours, etc) of the trade union members which have been negotiated through the collective bargaining process. Collective agreements are signed and executed by and between the trade union and the employer.
Collective agreements not only define contractual obligations of the parties, but also have normative effects of regulating the employment contract between the employer and individual employee. For example, Article 33 of the Trade Union Act invalidates portions of the employment contract or the employer’s rules of employment that fall foul of the standards for working conditions stipulated in the collective agreement. In other words, a collective agreement that has been entered into on an equal footing between the labourers and the management takes precedence over the individual employment contracts or rules of employment set by the employer.
Collective agreements also entail a “peace obligation” which, during the effective period of the collective agreement (i) requires the parties to mutually comply with the provisions within the collective agreement and (ii) prohibits the trade union from taking collective actions for the purposes of modifying the terms of the collective agreement that have already been agreed between the parties.
Ordinarily, contracts are binding only upon the parties to such contracts. For collective agreements, however, the binding effect of the agreement may also extend to third parties (ie non-parties to the agreement) if “certain conditions are satisfied” (seeArticles 35 and 36 of the Trade Union Act).