[Reporter’s Notebook] Administrative Guidelines Become a "Paper Tiger" Amid Spreading Strike Risks

SK hynix’s labor and management have reached final approval on a revised collective bargaining agreement just three weeks after their first tentative wage negotiation proposal was rejected. By adjusting the proportion of performance bonuses paid in cash, both sides chose a soft-landing compromise. However, in contrast to the settling of disputes at SK hynix, the broader industrial sector is now being roiled by the aftermath of the "N% of operating profit" performance bonus schema, resulting in widespread risks of strikes across various industries.

Given the high margins inherent to the semiconductor industry, there was room for compromise at SK hynix in terms of performance bonus ratios and the proportion paid in cash. In contrast, key national industries such as steel, cable, shipbuilding, and aviation—now facing the aftershocks—naturally have low-margin structures due to higher raw material and fixed cost ratios, making them more susceptible to volatility in operating profits. The attempt to impose a high-margin semiconductor-style "N% of operating profit" bonus allocation criterion across structurally different base industries is putting the entire industrial sector through a challenging ordeal.

The government's ambiguous response has also contributed to stoking these conflicts. Although labor authorities have issued administrative guidelines stating "management performance bonuses are not mandatory subjects of negotiation," industry sources lament that such guidelines are mere "paper tigers" with little effect at ground level. Administrative guidelines cannot bind the courts. Given the current legal landscape, with the judiciary increasingly recognizing performance bonuses as part of wages and administrative guidelines lacking binding power, companies feel it is risky to make decisions based solely on such guidance.

At the negotiating table, there is a growing tendency for unions to blur the lines between negotiation items: combining legally mandated negotiations over base salary and wages with demands for performance bonuses into a single package. Ostensibly using "wage negotiations" to secure the legal right to industrial action, unions are in practice forcefully demanding "N% of operating profit" allocations, leading to repeated and prolonged bargaining deadlocks.

To make matters worse, there are clear limitations in the current mediation system. If unions include performance bonus demands along with basic wage demands, the labor commission is structurally compelled to declare "suspension of mediation" on the grounds of failure to reach agreement on basic wages. While labor authorities claim that they can prevent bonus disputes through guidelines, in actual legal mediation procedures, the system paradoxically grants the right to strike despite not being able to strictly vet the eligibility of collective bargaining, creating an inherent contradiction in the field.

Other industrialized nations draw clear lines against labor actions that infringe on management rights. In the United States, mandatory and voluntary subjects of negotiation are strictly separated, and there are strong legal restrictions on labor actions targeting pure management rights or business restructuring. In Germany as well, industrial action beyond the purposes of collective bargaining is strictly limited through court precedents.

If the government is to resolve the ongoing conflict over performance bonuses, it must move beyond ineffective guidelines and secure clarity at the legal level. Immediate legislative action is required, in cooperation with the legislative branch, to refine the scope of bargaining subjects under the Trade Union Act and address indirect industrial actions through more sophisticated supplementary legislation. If the government continues to take cover behind ambiguous administrative orders, the flames of legal uncertainty will eventually sever the lifeblood of Korea’s key industries.

This content was produced with the assistance of AI translation services.