Labor-management tensions intensify over the scope of performance bonus disputes

As the government speeds up efforts to revise the system so that performance bonuses tied to operating profit are excluded from labor disputes, backlash from labor is growing. After President Lee Jaemyung said, in effect, that performance bonuses are not subject to disputes, the Ministry of Employment and Labor said it would quickly revise the relevant rules to reduce confusion in the early stage of the Yellow Envelope Act’s implementation. This controversy is linked to a case in the Samsung Electronics labormanagement negotiations, where performance bonuses were treated as a bargaining agenda item. Last May, the Labor Ministry and the National Labor Relations Commission interpreted them in a way that suggested performance bonuses could be included as a dispute subject, but the Ministry of Trade, Industry and Energy and the business community believe that performance bonuses are not wages and therefore cannot be subject to collective bargaining. Labor circles criticize the government’s policy, saying it could undermine the intent of the Yellow Envelope Act and the principle of autonomous labormanagement bargaining. The Korean Confederation of Trade Unions and the Federation of Korean Trade Unions argued that limiting the scope of disputes through enforcement rules or administrative guidelines could shrink workers’ basic labor rights. As discussions on labor flexibility such as the government’s push for three major mega projects and exceptions to the 52hour workweek are layered on top of this, there is also concern that the conflict could spread across laborgovernment relations as a whole.