The Supreme Court of South Korea has issued a landmark ruling requiring Samsung C&T to fulfill its collective bargaining obligations under law with the Samsung branch of the Korean Metal Workers’ Union (“Samsung Union”) for the period between 2011 and 2020. This decision clarifies the invalidity of the “Everland Union,” a counter-union created by Samsung C&T management, and enforces the company’s duty to engage in good faith collective bargaining with the Samsung Union.

For more articles on Korean Labor Law, please see: IPG Legal’s Labor & Employment Law Archive.

The conflict traces back to 2011 when workers at Samsung C&T formed the Samsung Union and affiliated themselves with the Korean Metal Workers’ Union, part of the Korean Confederation of Trade Unions. From the outset, the Samsung Union made repeated requests for collective bargaining, formally communicating with the company every year starting in August 2011. Despite these efforts, Samsung C&T refused to respond to the requests, opting instead to negotiate with the Everland Union, a rival union that Samsung C&T management set up in June 2011, just one month before the Samsung Union was formed.

The Everland Union’s formation and the subsequent wage agreements signed by Samsung C&T were at the center of the legal dispute. The Korean Metal Workers’ Union argued that the Everland Union was established under unfair labor practices by the company, seeking to undermine the legitimate activities of the Samsung Union.

Korean Court Rulings

1. In 2019, the Korean Metal Workers’ Union filed a lawsuit seeking to invalidate the Everland Union, arguing that its creation was a tactic to obstruct the establishment of an independent union at Samsung C&T.
2. In 2022, a court ruled in favor of the Samsung Union, declaring that the Everland Union was established through unfair labor practices by the employer. The ruling emphasized that the Everland Union did not meet the legal requirements outlined in South Korea’s Labor Union Act and was, thus, an invalid union.
3. In April 2020, the Korean Metal Workers’ Union filed a separate lawsuit against Samsung C&T, demanding that the company engage in collective bargaining for the period between 2011 and 2020. During that time, the Everland Union had been involved in negotiations. By 2021, Samsung C&T had entered into collective bargaining with the Samsung Union, and in 2022, a wage agreement was signed. However, the Union sought to go further, pressing for Samsung C&T to fulfill its obligations concerning collective bargaining for matters before 2020.
4. In the court of first instance, Samsung C&T prevailed. The court ruled that Samsung Union’s demands to retroactively enforce collective bargaining were not valid. It argued that wage agreements and other matters from the past could not be changed unless there was a legal basis for doing so, and the court found no legal basis.
5. The appellate court overturned the lower court’s decision in favor of the Korean Metal Workers’ Union. The court ruled that Samsung C&T had an obligation to negotiate in good faith with the Samsung Union. It reaffirmed the earlier ruling that the Everland Union’s establishment was a result of unfair labor practices by the employer that were designed to obstruct the formation of the Samsung Union. As such, the Everland Union was deemed invalid and not entitled to the rights and privileges granted to legitimate labor unions under South Korean labor law. The court emphasized that the Samsung Union, as the only legitimate union at the workplace, had the right to demand collective bargaining with Samsung C&T for the entire period between 2011 and 2020. It further explained that collective bargaining could retroactively address past working conditions, including wages and hours, but only for employees who were still working when the agreement took effect.
6. The Korean Supreme Court’s ruling upheld the appellate court’s decision, affirming that Samsung C&T must engage in collective bargaining with the Samsung Union for the period between 2011 and 2020. The court explicitly stated that the Everland Union’s collective agreements, signed between 2011 and 2020, were invalid under the Korean Trade Union Act. This ruling reaffirmed the Samsung Union’s right to collective bargaining during that period, despite the company’s refusal to engage with the union for nearly a decade. The Supreme Court of Korea clarified that the Samsung Union had the legitimate right to demand collective bargaining and that Samsung C&T’s refusal to negotiate with the union, which was the only legitimate union in the workplace, was unjustifiable. In its conclusion, the Court noted that special circumstances existed where the rights of the Samsung Union had been effectively denied for years, and thus the company’s duty to engage in collective bargaining was justified.

   The Korean Supreme Court noted that: “It is not appropriate for the original court to view the Samsung Union as being able to negotiate past working conditions regardless of the validity of the existing collective agreement . . .. Since the Everland Union does not have the status of a union that can enjoy the three labor rights, including the right to collective bargaining, the collective agreement and wage agreement concluded between 2011 and 2020 are invalid under the Trade Union Act.” The Supreme Court of Korea further elaborated that “There are special circumstances that make it seem that the right to collective bargaining was not guaranteed even though the Samsung Union, as the only union with the right to collective bargaining within the workplace, legitimately requested collective bargaining.”

Implications of the Korean Supreme Court Ruling on Samsung Union

This ruling marks a significant victory for unions in South Korea. For companies, the ruling highlights the need for genuine and good-faith negotiations with recognized unions. Employers who attempt to undermine union efforts, fail to have processes in place, or fail to negotiate in good faith may face significant legal and financial consequences, as Samsung C&T learned through this drawn-out legal battle.

As the legal landscape continues to evolve, this case may serve as a touchstone for future labor disputes, particularly in the context of corporate resistance to unionization and the protections afforded to workers under South Korean labor law. We shall update the reader when more is known.

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He assists clients with their contentious, non-contentious, and business development needs, and is regularly quoted by leading media sources on Asia’s legal and business issues. Sean is rated a Top 100 attorney, and his firm was rated a top dispute resolution law firm in Korea.   

If you would like a consultation with Sean Hayes from IPG Legal, please schedule a call at: Schedule a Call with Attorney Sean Hayes. 

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