A collective agreement is decided autonomously by the labor and management aiming at achieving a stable labor-management relationship. It is a legal entity and both parties are obliged to stick to the regulations faithfully.
The parties involved in the collective agreement must not commit themselves to industrial action for a change of the agreement. They are also obligated to discourage other workers from industrial action (obligation for peace), which is not a clause in the collective agreement, but rather an inherent obligation.
Accordingly, it is not possible to engage in industrial action demanding any changes in the collective agreement during its validity. In case of violation, the person will be subject to civil and penal liability.

According to Art. 43 of the Trade Union and Labor Relations Adjustment Act, it is prohibited to replace or recruit new workers during industrial action. It stipulates that ‘An employer shall not hire or substitute any person not related to the relevant business during a period of industrial action in order to continue work which has been interrupted by the industrial action.’
Accordingly, it is not possible to replace or recruit new workers without any relation to the industrial action during the period of industrial action of the outsourced workers and through other means such as termination of the contract.

Management rights imply comprehensive rights related to organization, management and HR, which is an exclusive right bestowed upon the employer.Therefore, if the main goal of industrial action is to participate or take part in the management of the company, it is not a justifiable cause for industrial action. However, if temporary participation in management is demanded for improving or maintaining specific working conditions, the reason and cause for industrial action is justified.

The agreement of the union representative is effective as a collective agreement regardless of the rejection by the general meeting.

• According to the amendments of the Labor Relations Act of March 1997, grounds of criticism concerning the right of the labor representative to conclude agreements were nullified through Art. 29 of the Trade Union and Labor Relations Adjustment Act, stipulating that ‘the representative of a trade union shall have the authority to bargain and make a collective agreement with the employer or employers? association for the trade union and its members.’
• Accordingly, if the trade union demands a rebargaining due to the rejection by the general meeting, the employer can refuse the demand without corresponding to a “denial of bargaining.”

Labor union membership for people who are not workers of the company is prohibited, and a worker dismissed from a company has thus, in principle, lost the right to membership of the labor union.However, if the worker was dismissed on grounds of his activities in the labor union, the worker can apply for relief at the Labor Relations Commission. In that case, the worker remains a member of the union until a decision is made by the Central Labor Relations Commission.

According to the amendments of the Labor Relations Act of March 1997, an employer is not obliged to pay wages to a full-time labor unionist.However, it became common practice in Korea, different from in other countries, for the employer to pay the full-time unionists. If the employer one day suddenly did not give any wages to them, then difficulties in maintaining labor activities would be expected.Therefore, the implementation of the amended law of non-payment to full-time unionists has been postponed until 2006.

– During the period of postponement, the amount of wages paid to the full-time unionists
will be gradually reduced.

According to the amendments of the Labor Relations Act of March 1997, there is no obligation to pay wages for no work during periods of industrial action.

– It is forbidden to start industrial action with the purpose of demanding wages during that
period, and in case of violation, penalties are imposed.
The government will continue to pursue the policy of the no-work no-pay principle.
– If the labor union goes on strike to demand wages during the strike period, the
government will take measures according to the law.

In return for wage increases demanded by workers, companies used to give other allowances or welfare benefits.

– For that reason, the wage system became complicated and also management costs
increased. The allowances became fixed payments no longer reflecting the workers’
performances.
To solve this problem, it should be settled between the labor and management themselves. However, administrative support is also given by the government.
– If possible, the various allowances should be included in the basic wage, so that only
the allowances reflecting the performance of the worker are retained.
The government is making efforts to expand social welfare, especially for small-medium enterprises that have a relatively weak welfare system compared to large conglomerates, and for low-wage workers. The welfare includes scholarships, financial support for medical expenses and condolences / congratulations among others.

The legal working hours were previously 44 hours per week, but have now been reduced to 40 hours per week in order to increase the quality of life of the workers.In terms of the “Flexible Working Hour System”, the unit period will be extended up to three months from the present one month period for more efficiency. The employer can conclude a written agreement with the representative of workers and grant holiday leave instead of paying for night / holiday and overtime work.According to international legalization, paid monthly leave is abolished. Instead, the paid monthly menstrual leave will be transformed to unpaid leave, thus reducing the burden on the employer.Until now, for a worker having worked for more than one year, 10 days of paid holidays were granted, and for a worker having worked more than 90% a year, 8 days of paid holidays were granted. Now, however, 15 days of paid holidays are granted to workers having worked more than 80% a year. Every two years, one day’s holiday is added, up to the maximum limit of 25 days.
The employer is not obliged to compensate for any unused leave, if the worker did not use up the paid yearly leave, despite the employer having urged him or her to do so. This new rule should encourage workers to use their paid yearly leave entitlement.
The date of implementation of the new law is as follows:

• Business or office with more than 1,000 ordinary employees and the finance / insurance sector, certain government-invested institutions: July 1, 2004
• Business or office with more than 300 and less than 1,000 ordinary employees: July 1, 2005
• Business or office with more than 100 and less than 300 ordinary employees: July 1, 2006
• Business or office with more than 50 and less than 100 ordinary employees: July 1, 2007
• Business or office with more than 20 and less than 50 ordinary employees: July 1, 2008
• Business or office with less than 20 ordinary employees and national as well as local bodies and institutions: not later than 2011 (day to be decided by the President of the Republic of Korea)

In order to reduce the burden for the company and the employer, a mid-term settlement of severance pay was introduced.

– A mid-term settlement of severance pay is to pay severance for the period of
continuous work the employee has provided even before retirement. In case of mid-
term settlement, the continuous period of work will be newly-calculated from the day
the mid-term severance pay was settled.
– Other conditions such as those concerning promotion, incentives or paid leave will be
considered as continuous even after the mid-term settlement of severance pay.
There is also a severance pay insurance system:
– The severance pay insurance allows the worker to receive severance pay at retirement
as bulk payment or as pension;
– In this case, the amount of severance pay to be received as bulk payment must not be
less than the severance payment of the severance pay system.