Hello, this is attorney Choi Jong-ha of Cheongchul Law Firm.

At a company without a labor union, the term labor-management council (노사협의회) may be unfamiliar. However, a labor-management council is a system that any workplace of a certain size or larger must establish and operate under the law, regardless of whether there is a labor union.

The Act on the Promotion of Employees' Participation and Cooperation (근로자참여 및 협력증진에 관한 법률) provides that a labor-management council must be established at a business or workplace that ordinarily employs 30 or more employees. Here, the obligation to establish one is not exempted on the ground that there is no labor union, and where there are several workplaces (with the authority to decide working conditions), the number of ordinarily employed workers needs to be checked for each workplace.

In practice, operating such a labor-management council may be difficult for a workplace with around 30 ordinarily employed workers, but the law provides that a labor-management council meeting must be held regularly every three months.

What happens if these obligations are violated?

The penalty provisions are divided by type of violation. First, Article 30 provides that a person who refuses or obstructs the establishment of the council without justifiable grounds, a person who fails to implement matters resolved by the council without justifiable grounds, and a person who fails to implement the contents of an arbitration decision without justifiable grounds shall be punished by a fine of up to KRW 10 million.

Next, Article 32 provides that an employer who fails to hold the regular meetings shall be punished by a fine of up to KRW 2 million. This means that neglecting the operational obligation after establishment, that is, holding the quarterly regular meeting, is separately subject to punishment. If the labor-management council exists only in form and there are no meeting minutes, this provision may apply.

Lastly, failure to submit the labor-management council rules may also result in an administrative fine of up to KRW 2 million.

The obligation to establish and operate a labor-management council is easy to overlook at workplaces with 30 to 40 employees, which are still relatively small, but it is a system that is compelled by law and can even lead to criminal punishment. If your company is approaching 30 employees, it would be advisable to obtain a legal review for the introduction and operation of this system.