Government must resolve labor disputes over 'Yellow Envelope' act and more

: The government must clarify labor rules and balance flexibility with protections to keep strategic investment at home.

At Alphabet, Google's U.S. parent company, bonuses and compensation are awarded at the company's "sole discretion." In Japan, labor and management typically negotiate bonuses in terms of months of base salary, reflecting corporate performance. Companies also tend to retain or invest profits to prepare for difficult times.

France has a statutory profit-sharing system, but labor and management do not determine how much profit is distributed. Instead, distribution follows a formula set by law, with a statutory ceiling on individual payments. This year, the maximum is about 58 million won ($39,400).

These examples were included in data released Monday by the Korea Enterprises Federation. They illustrate how far demands to link employee performance bonuses directly to operating profit can diverge from international practice.

Equally concerning are efforts by unions to intervene in major management decisions, such as building new factories. In connection with the government's semiconductor megaproject in the Honam region — the southwest region encompassing Gwangju and the Jeolla provinces — Samsung Electronics' supra-enterprise union has said it will make the establishment of a semiconductor plant an agenda item for collective bargaining in 2027.

If unions continue encroaching on management rights, Korea could miss critical investment windows in strategic industries such as semiconductors. Companies might also redirect investment overseas rather than invest domestically.

The Ministry of Employment and Labor has an important role in preventing disputes over profit-linked bonuses and union interference in management decisions. It should revise enforcement decrees and regulations to reduce confusion at industrial sites. The definition of a labor dispute under the Trade Union and Labor Relations Adjustment Act must also be clarified. If the law itself remains ambiguous, revisions to subordinate regulations can accomplish only so much.

The Korea Enterprises Federation has also called for greater labor flexibility to enhance the competitiveness of planned megaspecial zones. It proposes allowing overtime to be calculated over periods of a month, quarter, half-year or year instead of the current weekly basis.

It also advocates a "white-collar exemption" from working-hour regulations for highly paid research and development employees and professionals, with such provisions incorporated into special legislation governing the mega zones.

These proposals should not be dismissed simply because they come from an employers' organization. Megaspecial zones cannot succeed without at least the degree of labor flexibility routinely available in competing countries such as the United States, Japan and China.

The government must take a more active role in resolving contentious labor-management issues. If a government cannot become a problem solver, the government itself becomes part of the problem.

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