Since the implementation of the Yellow Ribbon Act (amended Labor Union Act), companies have repeatedly challenged rulings by the Labor Relations Commission concerning issues such as prime contractor employer status. Cases where decisions were overturned between first-instance and review hearings indicate that legal disputes unresolved at the Central Labor Relations Commission are now moving to the courts. Projections suggest that the ambiguous provisions of the Yellow Ribbon Act will ultimately lead to more corporate challenges and court cases.
According to an analysis by Rep. Yoon Jae-ok's office of the National Assembly's Climate, Energy, Environment, and Labor Committee, which obtained data from the Ministry of Employment and Labor on the 17th, a total of 70 cases related to the Yellow Ribbon Act were filed with the Central Labor Relations Commission as of late July. Among these, excluding 'separation of bargaining units' cases where both sides can file applications and involve complex interests between multiple unions—making them difficult to judge as simple labor-management wins or losses—24 out of 31 finalized rulings were in favor of the applicants, resulting in an approval rate of 77.4%.
The approval rate refers to the proportion of cases where the Labor Relations Commission accepted applications after issuing a ruling, serving as an indicator of the commission's stance on disputes related to the Yellow Ribbon Act. At the first-instance Local Labor Relations Commission (LRC), the approval rate for finalized cases under the same standard was 87.4%. While affirmative decisions accounted for a significant portion in Central LRC reviews, there were only two cases where the Local LRC's approval rulings were overturned and rejected at the review stage.
Conversely, there were also cases where the Central Labor Relations Commission approved applications after overturning rejections by the Local Labor Relations Commission. Representative examples include Jungheung Construction, Jungheung Civil Engineering, Korea Road Traffic Authority, and Korea Industrial Complex Corporation. With decisions differing between first-instance and review hearings, legal disputes over employer status and other issues at the Labor Relations Commission stage remain unresolved.
Companies continue to challenge Central LRC review decisions. According to the Central LRC, as of August 14, five administrative lawsuits were filed with the Seoul Administrative Court, four of which were brought by companies. Hanwha Ocean, Jungheung Construction, Jungheung Civil Engineering, and POSCO E&C sought cancellation of the review rulings, arguing that they are not employers under the Labor Union Act and thus had no obligation to announce the fact of negotiation demands, yet the Central LRC ruled otherwise.
Yoon Jae-ok (Rep.) stated, "Ambiguous provisions of the Yellow Ribbon Act and the biased rulings of the Labor Relations Commission are driving companies into court," and urged that "legally binding standards must be established to prevent on-site chaos, and an immediate overhaul of the Labor Relations Commission's ruling system is necessary."
Legal experts believe there is a high likelihood that legal disputes surrounding the Labor Relations Commission's rulings will continue to move to the courts, as the criteria for determining prime contractor employer status—the core issue of the Yellow Ribbon Act—have not yet been sufficiently clarified. If a prime contractor is recognized as an employer, it triggers an obligation for collective bargaining; refusing negotiations without just cause could lead to liability for unfair labor practices. Consequently, there is also a possibility that courts will soon provide specific criteria for judgment.
The government's interpretation guidelines also have limitations. While the Ministry of Employment and Labor's guidelines can offer judgment standards to reduce on-site confusion, they do not constitute final legal standards binding upon the courts.
President Lee Jae-myung recently pointed out that administrative interpretations alone are insufficient regarding the scope of disputes under the Yellow Ribbon Act, calling for the establishment of specific criteria. In response, the Ministry of Employment and Labor is reviewing various measures to concretize the system, including subordinate laws such as enforcement decrees and enforcement rules.
Given that the Yellow Ribbon Act was recently implemented, cases challenging Central LRC review decisions by taking them to court are expected to increase further. Concerns arise that if a gap widens between the Labor Relations Commission's rulings and the courts' eventual establishment of legal principles, legal uncertainty at labor-management sites could persist for an extended period.
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