Report in which the committee requests to be kept informed of development - Report No 381, March 2017

1. 322. The complaint is contained in a communication from the Korean Metal Workers’ Union (KMWU) dated 5 December 2013. The KMWU, the Korean Confederation of Trade Unions (KCTU), IndustriALL Global Union (IndustriALL) and the International Trade Union Confederation (ITUC) provide additional information in a communication dated 25 September 2015.
2. 323. The Government sent its observations in communications dated 15 September 2014, 4 March 2015 and 23 January 2017.
3. 324. The Republic of Korea has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), or the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants’ allegations

1. 325. In its communication dated 5 December 2013, the KMWU alleges: (i) a “no-union corporate policy” within the Samsung Group (the corporation), in the context of misused subcontracting and precarious employment relations; (ii) anti-union practices involving harassment, intimidation, pressure to withdraw from trade unions and dismissals of union leaders, including through the severing of allegedly doubtful subcontracting arrangements, at Samsung Electronics Service (a subsidiary company of the corporation); and (iii) resistance to collective bargaining and non-compliance with concluded agreements. The KMWU also denounces the Government’s inaction to address these allegations against the biggest IT corporation in the world, which does not lack resources to fight unions.
2. 326. The KMWU indicates that workers at the corporation face systematic surveillance, intimidation, dismissals, and wage and social victimization when they try to exercise their right to form and participate in trade unions, in direct contravention of ILO Conventions Nos 87 and 98. According to the complainant, the key reason for this is a systematic corporate “no-union” management policy that has existed at the highest levels since the corporation was founded 70 years ago and which runs counter to employer respect for workers’ rights to form trade unions and participate in trade union activities. A key method in denying workers the right to exercise freedom of association is the employment of outsourced, contract workers with precarious employment relations.
3. 327. By way of example, the complainants state that: a factory of the corporation’s branch in Indonesia (SEIN) in Bekasi, West Java, employed 2,800 workers, out of which only 1,200 were regular permanent employees, 800 workers were outsourced and 800 were contract workers at the time that the precarious workers formed a union and joined the Federation of Indonesian Metal Workers (FSPMI) in October 2012; in November 2012, the SEIN dismissed the union leaders and activists by terminating subcontracting contracts and intimidated other workers by deploying armed thugs, who allegedly raided cars and motorcycles as directed by management; and although in-plant outsourcing of labour in manufacturing is contrary to Indonesian law and protests were held calling on the Korean Government to take action to punish Korean corporations that violate Indonesian laws, to urge the corporation to reinstate the dismissed workers and to stop using hired thugs, the Government failed to take any steps towards the reinstatement of the dismissed workers and the union was “busted”.
4. 328. The complainants also state that in October 2013, a member of the Korean National Assembly ascertained that, in order to implement the union-free management policy, the corporation prepared a 115-page document entitled the “S Group Labour Management Strategy”. The document allegedly details the corporate group’s strategy to destroy unions and was used to train Chief Executive Officers (CEOs) and labour management officials of the group’s affiliates, ordering them to carry out the policy in breach of laws safeguarding workers’ rights.
5. 329. In explanation of the structure of operations at the subsidiary company in the Republic of Korea, the complainants indicate that: (i) the subsidiary company carries out repair and after service of corporate products and its shares are 99.33 per cent owned by the corporation; (ii) the subsidiary company functions in 98 service centres in the country in which work is carried out by directly employed permanent workers and subcontracted workers; (iii) service centres are mainly operated through service subcontractors – “Great Partner Agency” (GPA) subcontractors – responsible for sales, call centres, receptionists, internal service and field service repair persons, etc.; (iv) there are 117 GPA subcontractors and seven directly operated service centres; (v) most of the CEOs of the subcontractors are former executives or employees from the corporation; and (vi) the subsidiary company, in fact, provides direct direction and supervision of the workers nominally employed by the subcontractors. These subcontractors lack independence and act as proxy employers for the subsidiary company, as demonstrated by the following factors: subcontractors do not possess technology, licences or patents for the corporation’s products; training of their employees is carried out by the subsidiary company; electrical and electronic parts necessary for their tasks are directly provided and audited by the subsidiary company; the system through which workers receive work orders and instructions and report outcomes is a smartphone application developed and administered by the corporate group and only works on corporation smartphones; workers’ wages and incentives are paid according to criteria set by the subsidiary company and are also paid out by it; and subcontractors provide the subsidiary company with its core technology and skilled workforce – their contracts with the subsidiary company only allow them to perform warranty and after-service for corporation products and they do not have an independent existence or activities separate from the corporation. The complainants, therefore, allege that this situation leads to a de facto employment contract between the subsidiary company and subcontractors’ workers caused by illegal dispatch of agency workers or disguised subcontracting and that even though the subsidiary company is the employer who controls wages and working conditions, it is engaged in union-busting and hides behind the subcontractors to ignore the workers’ calls for improvement of working conditions and collective bargaining.
6. 330. The complainant organizations further allege anti-union practices and repression of union members at the subsidiary company, involving harassment, intimidation, pressure to withdraw from trade unions and dismissals of union leaders, including through the severing of allegedly doubtful subcontracting arrangements. In particular, the complainants indicate that the subsidiary company has forced low wages, long working hours and poor, at times hazardous, working conditions on workers of the service centres, who were unable to claim benefits to which they were entitled and faced abusive language from the subsidiary company’s and subcontractors’ managers on a daily basis. In these conditions, Mr We Young-Il, working in the Dongrae service centre in Busan City, wanted to establish a labour management consultative council but found that the subsidiary company had already registered a consultative council with the local labour office in the form of a “Great Work Place” committee (GWP). The complainants consider that the use of an English title and acronym, rather than the commonly used Korean term “Labour Management Consultative Council” made the institution less accessible to workers and indicate that in January 2012, when Mr We Young-Il sought advice from his GWP worker representative as to whether his working conditions breached minimum standards, the representative was unfamiliar with the Labour Code and defended the employer. In June 2012, Mr We Young Il was elected Chair of the GWP at the Dongrae service centre, which he tried to make more accessible and democratic for workers in order to address their demands and managed to obtain the hugely popular right of workers to have every second Saturday off. As a result, GWP worker representatives from Pohang and Kumi contacted Mr We Young-Il for advice, which led to demands for better working conditions being made at other service centres. The complainants allege that, in response, the subsidiary company began harassing Mr We Young-Il: he was threatened that he would be singled out for an audit; he was ordered to climb local mountains for “mountainside re-education” on Sundays and early weekday mornings, without compensation; and, claiming that they wanted to verify if he had stolen any company materials, but without a warrant or reasonable grounds for suspicion, the subsidiary company arbitrarily searched Mr We Young-Il’s personal car. As the targeted audit found no irregularities, Mr We Young-Il could not be dismissed and earned even more respect from workers after this experience.
7. 331. The complainants state that when Mr We Young-Il requested a union officer from the KMWU to come to his workplace to perform basic trade union education, it was the first time that a trade unionist had been invited to address workers at any service centre of the subsidiary company. Realizing that there were moves to form a trade union, the Chairman of the subsidiary company’s southern region branch group personally visited the Dongrae service centre and the subsidiary company decided that employees “contaminated” by trade union education should be “quarantined” into one centre, and instructed the new subcontractor to hold onto the workers so that they did not end up spreading trade unionism throughout other service centres. The complainants state that at the end of May or beginning of June 2013, the subsidiary company terminated the GPA contract with the Dongrae service centre field services and transferred the contract, with all the subcontractor’s employees except Mr We Young-Il and one other person, to the subcontractor handling internal services at the same centre. The complainants thus allege that the subsidiary company effectively dismissed Mr We Young-Il by terminating the GPA contract, and prevented his reinstatement by shutting down the subcontractor that had nominally employed him. As the messages concerning formation of a trade union and Mr We Young-Il’s dismissals spread on various chat boards, the management searched workers’ personal belongings and erased messages concerning these topics that had been left on chat boards.
8. 332. The complainants further state that the unionization effort became well known and Mr We Young-Il was elected as Chair of the KMWU Samsung Electronics Service Workers’ Local (KMWU Workers’ Local) at its founding assembly on 14 July 2013. Within a month of its establishment, over 1,000 workers from service centres around the country joined the union, but the subsidiary company began putting pressure on workers to withdraw from the union: through the subcontractors’ management the subsidiary company held morning assembly meetings and one-on-one meetings at which workers were threatened and instructed to withdraw their membership; they were required to make written apologies for passing out, in their own time, leaflets informing workers of a union rally; they were threatened with disciplinary action for publicizing union activities; one worker, who had defected from North Korea, was threatened by the management to be deported if he joined the union; the subsidiary company began singling out workers actively participating in the union with targeted audits and, after finding them guilty of minor infractions, some dating back several years, it threatened to lodge civil and criminal cases unless they withdrew from the union and issued disciplinary dismissals of union activists (although audits are normally carried out after the peak season in October to verify stock levels, these targeted audits against union members were carried out as soon as the trade union was established, although it was the peak season, to find something for which they could be subjected to disciplinary punishment). The complainants indicate that within three months the company’s persistent harassment and union-busting actions had pushed union members into “immense economic and mental distress”. On 31 October 2013, Mr Choi Jong-beom, a 32-year-old union member, committed suicide, leaving a message that the complainants indicate reads “the whole time I worked at Samsung SVC was so hard for me. I haven’t been able to enjoy life being so hungry, and everyone’s struggling so hard that just bearing witness to this is also painful. Though I can’t be like Jeon Tae-il, still I have made my choice. Please, I hope it helps”. The union explains that Mr Jeon Tae-il was a worker who set himself on fire and ran through the streets shouting “uphold the Labour Standards Act” and who is considered to have given his life so that the labour movement would be able to exist in the Republic of Korea.
9. 333. The complainants further allege that when the KMWU requested the subsidiary company to engage in collective bargaining in July 2013, the subsidiary company avoided the request for around four months, claiming that it required the union membership list before entering into collective bargaining, although, according to the complainants, such a request has no legal basis. In addition, the subsidiary company did not comply with the legal requirement to post a notice indicating that a request for collective bargaining had been made. As a result, the KMWU filed a request to the Labour Relations Commission (LRC) for a Corrective Order, which further delayed the negotiations by another month, and even after the KMWU was recognized as the workers’ bargaining agent, the management of the subcontractors delayed negotiations for a variety of reasons so that the first meeting was held almost two months later. The complainants state that, in what appeared to be a coordinated move based on orders from the subsidiary company, the management of 35 subcontractors authorized the Korean Employers’ Federation (KEF) to bargain on their behalf and stopped coming to meetings. The complainants state that the KEF continued to delay collective bargaining on the real issues so that, at the date of the complaint, collective bargaining was still stalled. They believe that the Ministry of Employment and Labour (MOEL) should have issued an administrative order to address such avoidance of bargaining.
10. 334. In a communication dated 25 September 2014, the KMWU, the KCTU, IndustriAll and the ITUC reply to the observations from the KEF and provide additional information concerning the allegations of disguised subcontracting, anti-union practices and resistance to collective bargaining and non-compliance with collective agreements.
11. 335. As regards the allegations of disguised subcontracting, the complainants state that the KMWU has not withdrawn this allegation and even sustained a lawsuit in this regard (Seoul Central District Court, 2013Gahap53613). On the contrary, the complainants consider that the subsidiary company has a sophisticated subcontracting arrangement which constitutes an illegal use of agency workers disguised as subcontracting. They refute all of the KEF’s statements on this issue for the following main reasons: the subsidiary company issues direct work instructions to the subcontractors on various areas of management, including via an application developed by the subsidiary company, which are then transferred to the workers and go far beyond an ordinary notification system – these instructions negate the subcontractors as independent business entities and serve as evidence for disguised subcontracting; the subcontractors do not have their own equipment, are not financed on their own and almost all revenues are generated from transactions with the corporation or the subsidiary company; the CEOs of subcontractors are largely former managers of the subsidiary company; supervisors from the subsidiary company attend meetings at service centres and issue direct instructions; work distribution is done through an application and only the subsidiary company can adjust a minimum work-hour transferrable to a service engineer; subcontractors’ field service workers and engineers employed directly by the subsidiary company both work in the same jurisdiction and share jobs interchangeably; the subsidiary company picks those workers who are to attend training, determines their programme depending on its needs, identifies low performers and orders them to take additional training courses; the subsidiary company designs and determines the wage system for subcontractors’ workers and pays all social insurance contributions and severance pay instead of the subcontractors; services are provided in line with the repair service manuals developed by the subsidiary company and engineers were ordered not only to service and repair products but also to promote the sales of the subsidiary company’s products; subcontracted workers report on their work through an online system supervised by the subsidiary company, which also ordered all offices and branches to hold weekly meetings to verify performance results; and the subsidiary company evaluates the performance of its regional branches and offices based on performance indices of service centre workers.
12. 336. In consideration of the above factors, the complainants believe that the subsidiary company meets the criteria of employer and the subcontractor companies are a legal fiction meant to avoid the subsidiary company’s responsibility to the workers. They also state that the fact that the KMWU negotiated with subcontractors, who are on employment agreements with members of the KMWU Workers’ Local, and concluded a collective bargaining agreement with the KEF, does not negate the illegality of disguising agency work arrangements as subcontracting by the subsidiary company. The complainants further make reference to the Employment Relationship Recommendation, 2006 (No. 198), which reflects a tripartite effort to address some of the most common forms of precarious work, Article 13 of which provides clear guidance on the elements of the employment relationship.
13. 337. With regard to the allegations of anti-union practices, the complainants indicate that a document entitled “Plans to stabilize organization” was found at the Ulsan service centre. The document was produced by the subcontractor covering the centre and shared with the subsidiary company’s regional branch. According to the complainants, the document refers to a process of “greening”, understood as the process of forcing a union member to withdraw from the union and de-unionizing all workers at the workplace. In particular, the complainants allege that: (i) the document contains different “greening” strategies for field and internal service workers – for internal workers who are less likely to be unionized, it is recommended to win them over by providing these union members with benefits, while for field workers, who are more likely to be loyal to the union, the document recommends dismissing the leaders and buying off ordinary members; (ii) the document details the methods and the persons in charge of winning over union members, measures which include the persuasion of members’ families and offering of a higher pay rate to those in bad financial situations; (iii) the subcontractor showed commitment to “greening” by stating in the document that it would take all-out measures to “green” the entire workforce at any price; (iv) the document was implemented in practice, as is demonstrated by the kidnapping of one key member of the internal service – he was told to get into a car, was driven to an island situated tens of kilometres from Ulsan, the managers confiscated his mobile phone, confined him in a room and told him that he could not escape the island unless he withdrew from the union; and (v) a manager at the centre admitted in a conversation with a union member that the document was created by order of the primary contractor (subsidiary company) and reports on the document were provided to it. The complainants indicate that the KMWU is in the process of securing the manager’s confession, and various media reported on this case.
14. 338. The complainants also allege that special audits exclusively targeting union members continue across the country (the document found at the Ulsan centre suggests that the audit materials of union members were managed separately) and that many union members were dismissed or withdrew from trade unions. Allegations are further made of unfair labour practices consisting of influencing union members to withdraw from trade unions, interfering with the operation of unions and unfavourable treatment of union members. The complainants state that the managers of at least four centres were convicted for unfair labour practices related to collective labour relations: at the Yangsan centre, managers referred to union members as “communists” or “a revolution organization” and at the Yeongdeungpo, Yangcheon and East Incheon centres, managers were found guilty of checking if an employee had joined the union and if not, telling him or her not to join it, hindering union members from attending a union inauguration conference and putting pressure or force on union members to withdraw from the union. The complainants also state that, since the initial complaint was submitted to the Committee, eight unionized centres (Haeundae, Asan, Icheon, Suncheon, Jinju, Masan, West Suwon and Ulsan) were closed down and reopened, almost all personal and physical assets of the closed centres were transferred to new centres so that the substance of business remained intact and only the titles and nominal CEOs were changed and all employees, other than union members, were rehired by the successors. According to the complainants, these close-downs were fake, aimed at busting trade unions, and led in almost all centres to deteriorating working conditions and disaffiliation of a number of union members. The complainants indicate that union repression led to the suicide of Yeom Ho-seok and that members of the KMWU Workers’ Local continue to suffer from repressive measures conducted by the subsidiary company.
15. 339. In relation to the allegation of neglect of duty of collective bargaining and violation of collective bargaining agreements, the complainants reiterate that collective bargaining was delayed due to the employers’ avoidance of negotiations – it took almost one year to conclude the collective bargaining initiated in July 2013, and supplementary agreements in each region were concluded later than October 2014. Addressing the KEF’s statement that the unions repeatedly refused to provide subcontractors with the list of members to verify if any employee acted in the employer’s interests, the complainants state that, in line with section 10 of the Trade Union and Labour Relations Adjustment Act (TULRAA), any person who intends to establish a trade union shall submit its bylaws to the MOEL, as well as a report indicating basic union information, which does not, however, include a list of union members but only their number. In addition, under section 14-2(2) of the Enforcement Decree of the TULRAA, when a trade union requests an employer to bargain collectively, it shall do so in writing, stating the matters prescribed by the Ordinance of the MOEL, such as the name of the union and the number of members at the date of the request and, according to the Enforcement Rules of the TULRAA, the necessary information includes the title of the trade union, location of the main office and number of union members at the date of request. According to the complainants, this means that the persons who act in the interests of employers are not assigned to check the list of union members, instead the Ministry verifies if the union’s bylaws allow representatives of employers’ interests to join the trade union or not. As a result, it is sufficient for the KMWU to submit the number of union members to the subcontractors when it requests them to bargain collectively and not the list of union members. The complainants further reiterate that the subcontractors violated section 14-3(1) of the Enforcement Decree of the TULRAA as they did not publicly announce the name of the trade union which requested them to negotiate and that, under section 81(3) of the TULRAA, refusal or delay of collective bargaining without any justifiable reason is considered as unfair labour practice. They add that the CEOs of the Yangcheon and Yeongdeungpo centres were convicted for delaying collective bargaining.
16. 340. The complainants also allege that subcontractors and the subsidiary company are not observing an agreement of mutual withdrawal of accusation and complaints against each other. They explain that since labour disputes were prolonged for a year, both parties filed a number of complaints and accusations against each other but in late 2014 agreed on mutual withdrawal of accusations, complaints and other legal actions and to not file additional complaints or accusations for the same issues. While the KMWU cancelled all legal actions against them, the subcontractors and the subsidiary company failed to observe the agreement. In particular, the owners of the Yeongdeungpo and Yangcheon centres refused to withdraw accusations and the former submitted an additional complaint on an issue which falls within the category of mutual withdrawal.
17. 341. Furthermore, it is alleged that a large number of subcontractors failed to observe the framework collective bargaining agreement concluded between the KMWU and the KEF on 28 June 2014 and collective bargaining agreements and wage agreements with individual subcontractors concluded in November 2014. As a result, the KMWU submitted complaints against 32 service centres across the country for violation of collective bargaining agreements and failure to address back pay. While none of the cases saw final conclusions, several centres were given administrative orders for correction. The complainants further point to the passive attitude of the MOEL, stating that some labour inspectors of the Ministry, who have the status of special juridical police officer, recommended to apply to regional labour commissions concerning cases of back pay in order to obtain administrative interpretation of the relevant legal provisions, instead of taking immediate action and thus only delayed the solving of the confrontational labour relations.

B. The Government’s reply

1. 342. In communications dated 15 September 2014, 4 March 2015 and 23 January 2017 (received on 23 February 2017 and containing further up-dated information), the Government provides its observations, as well as those of the KEF.
2. 343. The Government states that the allegations in this case are made against the labour management relations of the corporate group and infringements of labour rights at the corporation’s subsidiary. In relation to the corporation’s labour-management relations in an Indonesian factory, the Government indicates that when a domestic enterprise operates abroad and hires local workers, the business is subject to local laws and regulations rather than the laws and regulations of the Republic of Korea. For this reason, if the employment contracts in the corporation’s branch in Indonesia are considered to violate Indonesian law, measures should be taken in accordance with national laws, regulations and procedures. Concerning labour management relations at the subsidiary in the Republic of Korea, the Government indicates that, on 25 October 2013, the local trade union of the KMWU’s Gyeonggi branch, the KCTU and seven organizations, accused the President of the subsidiary company and 14 management members of affiliate companies of unfair labour practices with respect to the “S Group Labour Management Strategy”. The Government states that an investigation is currently under way by the prosecution and that, if it turns out that Korean laws were violated, the Government will take action pursuant to relevant laws.
3. 344. With regard to the allegations of disguised subcontracting, the Government points out that in June 2013, the New Politics Alliance for Democracy and MINBYUN-Lawyers for a Democratic Society demanded a special labour inspection regarding their suspicion of illegal subcontracting by the subsidiary company. The MOEL undertook occasional inspections in 14 workplaces, including the subsidiary company’s headquarters, from 24 June to 30 August 2013. The inspections showed that the subcontractors had independence and autonomy and it did not appear that the contractor severely infringed upon the subcontractors’ rights to command and direct their employees, making the subcontractors’ autonomous command and direction rights nominal. The subsidiary company’s subcontracting of product repair work could, therefore, not be seen as illegal dispatch of workers. The Government adds that according to the inspection results, employees generally agree to work overtime but where subcontractors were found to have forced their employees to work for more than the prescribed overtime or failed to pay holiday work or unused annual leave, the Government ordered six subcontractors to pay overtime to 1,280 workers. The Government further indicates that regardless of the inspection results, 1,337 employees of 65 subcontractors sued the subsidiary company for confirmation of their employee status (486 employees in July 2013, 518 in September 2013 and 333 in December 2014) and that at the first trial in January 2017, the Seoul Central District Court dismissed the plaintiffs’ claims for the following reasons: the subsidiary company does not command and supervise specific or individual jobs at the worksites; each subcontractor had its own wages, employment rules and job grade systems which determine wages, work hours, holidays, fringe benefits, disciplinary action and personal matters; and the subsidiary company’s involvement in hiring, financial support for training and performance incentives, the opening of the in-house Olympiad, job training, assessment and supply of computer systems are part of consortium programmes or win–win cooperation efforts between a large company and small and medium-sized enterprises aimed at keeping service quality consistent across the nation. Consequently, the subcontractors’ employees could not be seen as having implicit employment contracts with the subsidiary company or working as dispatched workers hired by the subcontractors to follow the subsidiary company’s commands and directions.
4. 345. In relation to the allegations of dismissal of Mr We Young-Il, the Government indicates that under section 28 of the Labour Standards Act an employee may, in the case of unfair dismissal or unfair labour practice by his or her employer, file a request for remedy with the LRC. As Mr We Young-Il has not filed such a request, the Government states that there is no way to ascertain the facts and details of his dismissal.
5. 346. As regards the allegations of fake close-downs of service centres aimed at busting trade unions, the Government states that in accordance with section 81 of the TULRAA, any worker who has been dismissed or faced disadvantages simply because he or she tried to organize a trade union or engaged in other justifiable acts considered to be union activities may seek and receive a remedy from the LRC. However, since there have been no complaints or charges made against the closure of service centres or the resulting termination of employment, there is no way to verify the existence of union-busting activities by the subcontractors. The Government adds that workers from the eight closed service centres, including union members, who wanted to work for the newly opened centres, were rehired after completing the recruiting process and thus refutes the allegation that successor subcontractors refused to hire union members.
6. 347. Concerning the allegations of pressure on workers to leave their trade unions, the Government states that since 26 June 2013, the KMWU has made accusations against the presidents of the subsidiary company and its subcontractors for unfair labour practices regarding these alleged acts and that for any violation of the law confirmed by an investigation, the Government took action in accordance with the law. In particular, the Government indicates that in the case of the Yeongdeungpo service centre, union members applied for a remedy to the LRC against unfair labour practices in the form of transfers and suspensions but even though the LRC acknowledged the unfair transfers and suspensions (cases Seoul2014BuHae3588 and BuNo163 combined and Seoul2014BuHae1752 and BuNo62 combined), it dismissed the argument of unfair labour practices due to lack of evidence and the existence of a legitimate cause. In relation to the Ulsan service centre, the Government states that: (i) in May 2015, unfair labour practices against unionists were reported to the Ulsan District Prosecutor’s Office and included the establishment of “Plans to stabilize the Organization” and pressure on union members to withdraw from the union; (ii) the Ulsan District MOEL Office conducted an investigation and found that managers of the centre took a leader and other union members to an island and induced them to withdraw from the union, promising benefits in return, such as better treatment and autonomous management rights for workers; (iii) the Ulsan MOEL Office sent the investigation results to the Prosecutors’ Office for indictment but after reviewing its opinions, the Prosecutors’ Office decided not to seek an indictment due to lack of evidence; and (iv) the Ulsan MOEL Office did not seek indictments for other allegations, such as the inducement of certain workers, including through individual meetings, to withdraw from the union and inspections targeting certain core union members since it could not find enough evidence to prove them.
7. 348. As regards the allegations of refusal to bargain collectively, the Government states that the KMWU filed charges of neglect or refusal to bargain collectively against the CEOs of the subsidiary company and the subcontractors and that for any violation of the law confirmed by an investigation, the MOEL has taken action in accordance with relevant laws. The Government adds that, meanwhile, on 28 June 2014, the KMWU Workers’ Local and the subcontractors concluded an agreement on issues of mutual interest between labour and management, including guaranteed union activities, written collective bargaining agreements and a standard collective agreement, which provides for common conditions applicable to all subcontractors. According to the Government, labour and management have been bargaining smoothly for follow-up agreements on matters such as welfare benefits and prescribed overtime, in compliance with the standard agreement and confirmed the details of the concluded collective agreements in November 2014.
8. 349. With regard to the allegations of non-compliance with concluded agreements, the Government states that between December 2014 and March 2015, subcontractors’ unions and the KMWU filed 38 complaints against the subcontractors’ violations of collective agreements. Since the investigations found that the overdue pay issue raised by the unions stemmed from their differing interpretation of the wording of the collective agreements, the MOEL regional office concluded its internal investigation into most of the cases by advising both workers and management to seek help from the LRC, in line with section 34.1 of the TULRAA, in interpreting potentially problematic collective agreement provisions. The Government indicates that in an effort to address any controversy over the interpretation of the collective agreements, workers and management at each subcontractor formed a “wage system improvement committee” and in July 2015 started discussing the redesigning of the wage systems. The Government further states that some of the cases involving violations of the law were sent to the Prosecutors’ Office for indictment, while in other cases, the management was ordered to correct their violations.
9. 350. Referring to the measures taken to address the allegations in this case, the Government concludes by saying that the allegation that it has not fulfilled its responsibility to oversee the corporation’s labour relations is unfounded.
10. 351. Regarding the allegations of disguised subcontracting, the KEF position transmitted by the Government states that the KMWU has withdrawn this allegation by virtue of its engagement in negotiations with the subcontractors and states that all factors which according to the complainants amount to disguised subcontracting are, in fact, essential and minimal measures for carrying out an outsourced contract. The KEF indicates in particular that: (i) all subcontractors are completely independent and self-financed firms with separate business registrations and operate at their own discretion; (ii) the subsidiary company provided employee training and education programmes for subcontractors’ workers, as it was commissioned to do so, but also to other small and medium-sized enterprises, as an official government training programme; (iii) subcontractors rent electrical and electronic parts from the subsidiary company because such rental items are too expensive to be owned by small subcontractors and inspection of such rentals by the subsidiary is a normal exercise of legitimate ownership; (iv) subcontractor staff receive the necessary information concerning repair service from the subsidiary company through an online network system and such notifications aim at better scheduling of repair service and are not direct instructions from the subsidiary company (MOEL guidelines stipulate that giving instructions through an online network cannot be seen as a form of disguised subcontracting); (v) it is natural for contractors to set specific criteria for commission payments and, after a close labour inspection, the Government concluded that contracts between the subsidiary company and the subcontractors are legitimate; and (vi) if the minimum level of cooperation between the primary contractor and its subcontractors was characterized as direct instructions, it would be impossible for enterprises to make use of an outside workforce, whereas both subcontracting and outsourcing are widely accepted as universal methods of manufacturing in many high-tech companies. The KEF also refutes all additional arguments provided by the complainants in relation to false subcontracting, reiterates some of its previous arguments and adds that: the subsidiary company has the right to evaluate performance of heads of regional offices and branches based on performance indices of service centre workers, as these are related to the outcome of repair services; meetings between the subsidiary company and the subcontractors are reasonable in order to achieve goals under the contract and do not prove disguised subcontracting; communications between the subsidiary company and the subcontractors are not work orders but rather information sharing for contracting work; all web portals and online systems established by the subsidiary company are used to provide quick and accurate services or to share and provide technical information and do not constitute instructions; repair service manuals and warranty manuals are offered by the subsidiary company to provide consistent quality service and do not constitute direct orders; the attendance of the subsidiary company’s heads in toolbox meetings are exceptional and should not be generalized; service engineers were ordered to promote sales of the subsidiary company’s product only on one occasion about ten years ago and such occurrence is, therefore, exceptional; work distribution is done by the subcontractors; the subsidiary company’s engineers have different tasks than the engineers employed by the subcontractors and it is strictly forbidden to transfer a work order from one type of engineer to another; service engineers report their repair work in an online system simply to inform about progress; the subcontractors have their own repair and office equipment, borrow only expensive tools or equipment not easily found on the market and some of them operate other businesses in addition to contract works with the subsidiary; schedules for peak seasons are designed through consultations between the subsidiary and the subcontractors; although the subsidiary once supported a part of occupational safety and health programmes for small subcontractors, it was a win–win cooperation and not disguised subcontracting; staff education programmes are operated under the approval of the MOEL in line with domestic law and no additional training programmes are scheduled for underperforming workers; and the subsidiary company only makes commission payments to the subcontractors based on their contracted work performance, it does not determine the payment method or the amount of wages and each subcontractor has a different wage system. The KEF adds that in January 2017, the Seoul Central District Court ruled that the subcontracting between the subsidiary and the subcontractors was legitimate, affirming the legal status of 1,300 subcontractors’ service workers. The KEF considers that the ruling has the following significance: it indicates that the right of work orders of the primary contractor, training, education, distribution of repair service manuals, workforce plan for peak seasons and the use of the subsidiary’s logo are deemed necessary to accomplish the purpose of subcontracting and to provide consistent quality services; if subcontractors are independent business entities and carry out labour management in accordance with their own regulations, work orders of the primary contractor are only a request to implement subcontracting; and even if there are some interventions from the primary contractor, it cannot be deemed as work orders and direction from the primary contractor if they are not verified.
11. 352. Concerning the allegations of union busting in the Ulsan service centre and targeted audits against union members, the KEF states that this argument is unilaterally made up by the KMWU as there has been no case before the judicial authorities where the subsidiary company was found guilty of union-busting attempts or of targeted audits against union members. It further indicates that the eight service centres were closed down voluntarily due to deteriorating business situations, poor health conditions of the CEOs and other issues and this occurred despite the subsidiary company’s attempts to dissuade them from doing so. Once a centre is closed, the subsidiary company begins a selection process through bidding in order to find a successor, which cannot be considered as trade union busting.
12. 353. In relation to the allegations of resistance to collective bargaining, the KEF indicates that the KMWU sent the subcontractors a request for collective bargaining on behalf of the subcontractors’ unions in July 2013 but failed to provide all the necessary information, in particular the list of union members, so that the subcontractors could verify the employees’ membership status before negotiations. The KEF explains that the subcontractors needed to verify the membership list in order to confirm that no members were employees acting in the employers’ interests (executives, directors, secretaries and other employees in charge of management, accounting and human resources), as pursuant to section 2.4.1 of the TULRAA, the organization would not be regarded as a trade union if an employer or other persons who always act in their employer’s interests are allowed to join the organization. In addition, according to the MOEL Guide to Enterprise-level Multiple Trade Unions in the Republic of Korea, a supra-enterprise level trade union is eligible to bargain but must prove that its members are lawful employees of the employer by, for instance, attaching its membership list to the request. Since the unions repeatedly refused to submit the necessary information, the subcontractors postponed notification of the receipt of the request and the delay in collective bargaining was thus caused by the union’s uncooperative attitude.
13. 354. The KEF further states that the TULRAA provides for institutional devices to protect trade unions during the course of collective bargaining whereby a trade union may file a request to the LRC to take remedial action if an employer does not notify the receipt of a bargaining request. It indicates in this regard that the subcontractors’ unions filed such requests and after the LRC reviewed their membership list and ordered the subcontractors to notify the receipt of a bargaining request, the subcontractors immediately posted a notice that their trade unions had requested collective bargaining. The KEF also states that a heavy workload due to the peak season meant that it was not proper timing to start negotiations and it was, therefore, suggested to adjust the negotiating schedule, but the unions kept insisting on holding negotiations twice a week and unexpectedly refused to work on Saturdays during the peak season which seriously disturbed the business. It also explains that, since most of the subcontractors are small or medium-sized firms, they do not have enough capabilities to conduct collective bargaining with the KMWU and, therefore, delegated the bargaining rights to the KEF. While in the beginning, the negotiations did not proceed smoothly, the subcontractors’ unions and the KEF finally signed a wage and collective bargaining agreement. As of 1 September 2014, only four out of 46 subcontractors have not yet signed this agreement, but plan to hold meetings to adhere to it. According to the KEF, the unions and the subcontractors respect the obligations resulting from collective agreements and are making joint efforts to stop the long-held practice of conflicts and confrontation and to build cooperative relations, which is also demonstrated by the fact that in June 2014 they agreed to withdraw all legal disputes including mutual accusations, lawsuits or complaints against each other. The KEF states that, contrary to what the complainants claim, in the case of the Yeongdeungpo and the Yangcheon centres, both parties (employers and trade unions) refused to withdraw the mutual accusations and that out of 34 complaints submitted against the subcontractors for late wage payment, 28 ruled that the subcontractors were not guilty while six are currently under investigation by the MOEL. The KEF adds that between April and August 2016, seven regional representatives of the subcontractors and the KMWU participated in negotiations and reached and signed a wage and collective agreement in September 2016, which increases the basic pay of workers and grants additional overtime and other benefits to workers.

C. The Committee’s conclusions

1. 355. The Committee observes that this case concerns allegations of a no-union corporate policy within the corporation, in the context of misused subcontracting and precarious employment relations; anti-union discrimination at a subsidiary company of the corporation and its subcontractors, involving harassment and intimidation of union members, pressure to withdraw from trade unions and anti-union termination of employment; and resistance to collective bargaining and non-compliance with collective agreements.
2. 356. The Committee firstly notes the complainants’ general allegation that the Government has not fulfilled its responsibility to oversee the corporation’s labour relations, as well as the Government’s opposition to this statement. The Committee notes, in particular, the Government’s indication that labour inspections took place to assess the allegations of illegality of subcontracting, that investigations were undertaken into allegations of pressure and harassment of trade unionists and avoidance of collective bargaining, and that investigations in relation to the allegations concerning the “S Group Labour Management Strategy” are currently under way. The Committee takes due note of these indications and examines them in detail hereunder.
3. 357. With regard to the allegations of anti-union dismissals and intimidation in the factory of the corporation’s branch in Indonesia, the Committee duly notes the Government’s information that when a Korean business operates in a foreign jurisdiction employing local workers, it is subject to local law, and will not pursue its examination of this allegation with respect to the Government of the Republic of Korea.
4. 358. Regarding the “S Group Labour Management Strategy”, the Committee notes the complainants’ allegations that this document details the corporation’s anti-union strategy and was used as a training guide for management and labour-management officials across the corporate group and its affiliates, as well as the Government’s indication that, following accusations by a number of organizations against the President of the subsidiary company and management members of affiliated companies regarding the strategy, an investigation is currently under way by the prosecution and, if the law is found to have been violated, action will be taken in accordance with the law. Recalling that the right of workers to establish and join organizations of their own choosing in full freedom cannot be said to exist unless such freedom is fully established and respected in law and in fact [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 309] and emphasizing the seriousness of the allegations, the Committee requests the Government to keep it informed of the outcome of the prosecution’s investigation without delay and trusts that the Government will take the necessary measures to ensure full respect of workers’ rights to form and join labour organizations of their own choosing.
5. 359. With regard to the alleged use by the subsidiary company of false subcontracting relationships, the Committee notes, on the one hand, the complainants’ detailed list of indicators, which they allege, demonstrate the lack of autonomy of the subcontractors and point to false or disguised subcontracting by the subsidiary company meant to avoid its responsibility to the workers, and on the other hand, the Government’s indication that the MOEL undertook a series of inspections, upon which basis it did not appear that the subsidiary company had infringed the subcontractors’ rights to command and direct their employees and it was found that there was no illegal dispatch or improper use of subcontracting arrangements. The Committee further observes that the KEF refutes the allegation of disguised subcontracting, stating that any link between the subsidiary company and the subcontractors should be seen as essential and minimum measures for carrying out an outsourcing contract, and provides a detailed explanation of its position. The Committee also notes that while the KEF assumes that the KMWU withdrew this specific allegation, the complainants oppose this statement and provide an extensive list of arguments to support their position. Finally, the Committee notes the Government’s and the KEF’s indication that the Seoul Central District Court confirmed their position in January 2017, when it dismissed a claim by 1,337 employees of the subcontractors who sued the subsidiary company to confirm their employee status and stated that the plaintiffs could not be seen as having implicit employment contracts with the subsidiary company or working as dispatched workers hired to follow the subsidiary company’s commands and directions. The Committee takes due note of this information and considers that while it is not competent to reach a conclusion as to whether a particular situation constitutes “illegal dispatch” under Korean law, it is within its competence to examine alleged obstacles to the effective exercise of the right to organize and collective bargaining by all workers. In this respect, the Committee observes that the complaints highlight the obstacles placed by this subcontracting arrangement on the workers’ organizational and bargaining rights at the subsidiary company due to the denial of a direct employment relationship. Emphasizing that all workers, without distinction whatsoever, whether they are employed on a permanent basis, for a fixed term or as contract employees, should have the right to establish and join organizations of their own choosing [see Digest, op. cit., para. 255], the Committee requests the Government, taking due consideration of the various obstacles to freedom of association alleged in this case, to provide information on the steps it has taken to develop, in consultation with the social partners, appropriate mechanisms to strengthen the protection of subcontracted workers’ rights to freedom of association and collective bargaining. The Committee further invites the complainants to keep it informed of any decisions taken by the national authorities, including as to any appeal made to the courts regarding relevant legislation.
6. 360. With regard to the alleged intimidation and dismissal of Mr We Young-Il for anti-union motives by the subsidiary company and its subcontractors, the Committee notes the complainants’ indication that, following Mr We Young-Il’s engagement in trade union activities and his election as President of the KMWU Workers’ Local, the subsidiary company threatened him with an audit, searched his car, ordered him to be re-educated and terminated its contract with the subcontractor nominally employing Mr We Young-Il and shut it down. The Committee notes with concern the allegation that all employees of the subcontractor except Mr We Young-Il and one other worker were re-employed by another subcontractor within the same company service centre, thus leading to an effective dismissal of Mr We Young-Il. The Committee notes that the Government indicates that since Mr We Young-Il has not filed a request for a remedy for unfair dismissal under Article 28 of the Labour Standards Act, the Government was unable to ascertain the facts and details of the dismissal. The Committee further notes the discrepancies between the complainants’, the Government’s and the KEF’s views in relation to the closure and reopening of eight unionized centres. While the complainants allege that these unionized centres were closed down and reopened with all employees other than union members being rehired by the successors and that such fake close-downs and union-busting activities led in almost all service centres to deterioration of working conditions and the disaffiliation of a number of union members, the KEF indicates that the eight service centres were closed down voluntarily and the Government adds that all of the workers of the eight closed centres, including union members, who wanted to work for the newly opened centres, were hired after completing the recruiting process and that the existence of union-busting activities cannot be verified since no complaints or charges were made against the close-down of service centres or the resulting termination of employment. Emphasizing that anti-union discrimination is one of the most serious violations of freedom of association, as it may jeopardize the very existence of trade unions [see Digest, op. cit., para. 769] and that subcontracting, accompanied by dismissals of union leaders, can constitute a violation of the principle that no one should be prejudiced in his or her employment on the grounds of union membership or activities [see Digest, op. cit., para. 790], the Committee requests the Government to carry out an independent investigation, preferably judicial in nature, into the allegations that Mr We Young-Il’s employment was terminated and he was not rehired by another subcontractor carrying out all the same tasks due to his union activity, and, if it is found that such acts were related to his trade union activity, to take the necessary measures to ensure his engagement in the successor subcontractor or, if not possible for objective and compelling reasons, the payment to him of adequate compensation which would represent a sufficiently dissuasive sanction for such an anti-union act. The Committee invites the complainants to submit to the Government further necessary information in relation to the allegations of fake close-downs of service centres resulting in the termination of employment of workers for anti-union motives, so that the Government can undertake a thorough and independent investigation into these allegations and, if they are found to be true, take appropriate steps. The Committee requests the Government to keep it informed of the outcome of the independent investigations undertaken and any further developments in this regard.
7. 361. Concerning the complainants’ allegations of harassment and repression of trade union members following the establishment of the KMWU Workers’ Local and other trade unions at the service centres, the Committee notes that these allegations refer to one-on-one meetings with the management, unfavourable treatment of union members, intimidation, pressure on workers’ family members, buying off ordinary union members, verbal abuse, threats of disciplinary action for union activities and instructions to provide apologies for such activities, special audits exclusively targeting union members, interference in the operation of unions, disciplinary dismissals and other punishment, all aimed at union busting and obtaining workers’ withdrawal from trade unions. The Committee observes that apart from pointing to a general practice of anti-union acts throughout the service centres, the complainants also allege repression of workers in the Yangsan, Yeongdeungpo, Yangcheon and East Incheon centres, where managers were convicted for unfair labour practices, and the Ulsan service centre, where the alleged process of “greening” the workplace, understood as union-busting and the de-unionizing of all workers, led, among other forms of repression, to one key trade union member being kidnapped and held at a faraway island, while being pressured to withdraw from the union. The Committee notes with deep concern that it is alleged that as a result of union-busting and repression, union members suffered economic and mental distress leading, in the case of Mr Choi and Mr Yeom, to suicide and that such repressive measures continue across the country. The Committee also notes the Government’s general indication that allegations of unfair labour practices were investigated and measures taken to address any violation of the law but observes that the Government does not, with the exception of two cases, provide details as to its findings in relation to the numerous allegations of anti-union acts highlighted by the complainants. Further noting the Government’s statement that a MOEL investigation was undertaken into the specific allegations of anti-union activities at the Ulsan service centre, the Committee regrets that although the investigation confirmed the kidnapping and harassment of several unionists, the Prosecutor’s Office did not deem it sufficient to initiate criminal proceedings into the matter, and that the Government does not provide details as to its findings regarding the other allegations of anti-union practices at the Ulsan service centre (pressure on workers to disaffiliate, including through individual meetings, and targeted audits). The Committee also notes the KEF’s indication that there has been no case before the judicial authorities where the subsidiary company was found guilty of union-busting attempts or of targeted audits against union members and the Government’s statement that the claim of workers from the Yeongdeungpo centre for remedy against unfair labour practices was dismissed by the LRC.
8. 362. In view of the seriousness of the allegations, the Committee finds it appropriate to underscore that coercing trade union members into leaving a trade union constitutes a serious violation of the principle that workers must be free to join the organization of their own choice and that adequate protection is available to ensure respect for this right. The Committee wishes to emphasize that the rights of workers’ and employers’ organizations can only be exercised in a climate that is free from violence, pressure or threats of any kind against the leaders and members of these organizations, and it is for governments to ensure that this principle is respected. Acts of harassment and intimidation carried out against workers by reason of trade union membership or legitimate trade union activities, while not necessarily prejudicing workers in their employment, may discourage them from joining organizations of their own choosing, thereby violating their right to organize [see Digest, op. cit., paras 44 and 786]. In light of these principles, the Committee trusts that, should there be any remaining allegations of intimidation, repression, threats or other anti-union practices against trade union members which have not yet been addressed, the Government will ensure that they are fully investigated, and, if found to be true, appropriate steps are taken, including the imposition of sufficiently dissuasive sanctions and the granting of compensation to the workers concerned, to ensure that there is no recurrence of such serious anti-union actions in the future. The Committee invites the complainants to submit to the Government further necessary information regarding any pending allegations of anti-union acts so that the Government may undertake an independent investigation with all the available information. The Committee requests the Government to keep it informed of the outcome of all independent investigations conducted and any further developments in this regard.
9. 363. Concerning the allegations of excessive delays and avoidance of collective bargaining by the subsidiary company and the subcontractors, the Committee notes that while the complainants allege that collective bargaining was postponed on several occasions due to the subcontractors’ and the KEF’s avoidance of negotiations, as well as their refusal to publicly announce that a request for negotiation had been formed until they were ordered to do so by the LRC, the KEF states that the delay in negotiations was caused by the union’s uncooperative attitude and its refusal to provide a list of union members to the subcontractors, which, however, according to the complainants, is not a prerequisite for collective bargaining. The Committee welcomes the Government’s indication that after the KMWU filed accusations and charges against the CEOs of the subsidiary company and the subcontractors regarding their neglect or refusal to participate in collective bargaining, an investigation was undertaken and appropriate action was taken for any violation of the law and observes the additional information submitted by the complainants, according to which the CEOs of two service centres were effectively convicted for delaying collective bargaining.
10. 364. The Committee further notes with interest the information provided by the Government, the KEF and the complainants, that the KMWU concluded a framework collective bargaining agreement with the KEF, as well as collective bargaining agreements with the subcontractors on issues of mutual interest, including guaranteed union activities. However, the Committee notes the complainants’ indication that a large number of subcontractors failed to observe the collective agreements concluded, some of whom were also given administrative orders for correction, and that despite having agreed to withdraw all legal disputes including mutual accusations, lawsuits and complaints against each other, some subcontractors and the subsidiary company failed to observe the agreement by refusing to withdraw accusations and submitting new ones. The Committee further notes the KEF’s statement that the unions also refused to withdraw the mutual accusations in two cases and that the majority of complaints submitted against the subcontractors for late wage payment were ruled in their favour, as well as the Government’s indication that for issues of interpretation of collective agreements, workers and management were advised to seek help from the LRC, while cases involving violations of the law were either sent to the Prosecutors’ Office for indictment or the management was ordered to correct their violations. The Committee recalls that mutual respect for the commitment undertaken in collective agreements is an important element of the right to bargain collectively and should be upheld in order to establish labour relations on stable and firm ground and that failure to implement a collective agreement, even on a temporary basis, violates the right to bargain collectively, as well as the principle of bargaining in good faith [see Digest, op. cit., paras 940 and 943]. In this regard, the Committee notes with interest the Government’s and the KEF’s indication that the parties have been bargaining smoothly for follow-up agreements on matters such as welfare benefits and prescribed overtime in compliance with the standard agreement, that a new wage and collective agreement was signed in September 2016 and that the subcontractors and the unions are making joint efforts to stop the long-held practice of conflicts and confrontations and to build cooperative relationships. In light of this information, the Committee trusts that any remaining allegations of failure to observe concluded collective agreements will be fully addressed by the appropriate national mechanisms.