KEF urges South Korea to bar profit-sharing, plant decisions from labor disputes

The Korea Enterprises Federation urged the South Korean government to clearly exclude operating profit-linked performance sharing and new plant construction from labor dispute and collective bargaining proceedings, arguing that both are high-level management decisions rather than matters directly tied to working conditions. In recommendations released on the 17th, the federation said expanding union demands in those areas could weaken investment, research and development spending, and corporate competitiveness. KEF said a fixed percentage of performance bonuses linked to operating profit should be treated as a post-hoc distribution of business results, not wages, citing Supreme Court precedents that found such payments lack a close connection to working conditions. It also argued that even under the revised Trade Union Act, only business management decisions that materially and specifically affect working conditions belong in bargaining, unlike profit-sharing demands or investment decisions such as plant construction. The federation called for the Ministry of Employment and Labor to clarify through enforcement decrees and regulations that operating profit-linked bonuses and new plant construction are outside collective bargaining, and urged a longer-term revision to the legal definition of labor disputes. It also asked lawmakers to add labor flexibility measures to special legislation for industrial mega-clusters, including broader overtime accounting periods, a white-collar exemption, expanded flexible and selective working-hour systems, and a wider scope for dispatched work. KEF said such changes are needed to help national strategic industries compete with overseas rivals on more equal terms.

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