On September 3, 2026, the Ministry of Employment and Labor announced the “Guidelines on the Scope of Labor Disputes, Including Management Performance Bonuses,” bringing renewed attention to the criteria for determining labor disputes. The key point is that management decisions such as building a new factory or making an investment should not be treated as the same issue as actual changes in workforce operations and employment conditions that may occur during implementation.

To put it simply, demands for performance bonuses linked to corporate profits by a fixed percentage, such as N%, and the decision itself to build a new factory are difficult to regard as subjects of mandatory bargaining or labor disputes. However, the assessment may differ if changes in employment conditions, such as specific job reassignments or workplace changes, can be objectively anticipated.

Key Changes

The National Law Information Center identifies the amended Trade Union and Labor Relations Adjustment Act as a law that took effect on March 10, 2026. Through these new guidelines, the Ministry of Employment and Labor clarified the criteria for assessing management performance bonuses and business decisions that may become issues when the amended law is applied in practice.

The ministry’s criteria for performance bonuses distinguish between the payment structure and whether the bonus constitutes an employment condition. A demand for a management performance bonus linked to corporate profits by a fixed percentage is difficult to regard as a subject of mandatory bargaining or as a subject for mediation or industrial action. However, not every payment labeled a management performance bonus is automatically excluded. If it is not linked to corporate profits by a fixed percentage and instead constitutes an employment condition, such as wages, benefits, or other treatment, it may become a subject of mandatory bargaining.

Current Status

Business decisions are distinguished in the same way. The Ministry of Employment and Labor stated that the decisions themselves to build or relocate a factory, invest overseas, sell or acquire a business, or introduce AI and automated equipment are not subjects of mandatory bargaining. This does not mean that a labor union can directly make every corporate management decision a bargaining agenda item.

However, if the implementation of a decision involves job reassignments resulting from layoffs or restructuring, or if changes in the workplace, duties, or work arrangements can be objectively anticipated, the related employment and working conditions may become bargaining subjects. Accordingly, “whether to build a factory” and “who will work where and under what arrangements” must be examined separately.

The ministry also presented the standard that a change in employment conditions is not considered objectively foreseeable based solely on a business announcement or disclosure, a long-term plan, an abstract statement by management, media reports, or a unilateral assumption by a labor union. Specific workforce-operation plans and the actual possibility of change are therefore important factors in the assessment.

Issues Identified in the Honam Semiconductor Project

According to reports, Samsung Electronics’ labor union proposed making the Honam semiconductor project an agenda item for collective bargaining in 2027. In this case, the Ministry of Employment and Labor stated that it distinguishes between the decision itself to build a semiconductor factory in Honam and any resulting changes in workforce operations and employment conditions.

Based on the information currently confirmed, it is not possible to establish the strike schedule, participation scale, production losses, or actual workforce-operation plans for the Honam semiconductor project. It is therefore more appropriate to view the matter as a case concerning the scope of bargaining over factory construction and workforce adjustments, rather than describe it as a “strike that has been finalized.”

This distinction shows that the assessment may differ depending on the substance of the labor union’s demands.

  • The business decision itself to build a factory
  • A demand for performance bonuses linked to corporate profits by a fixed percentage
  • Specific changes in job assignments, workplaces, duties, or work arrangements

Under the ministry’s guidelines, the first two items are difficult to regard as subjects of mandatory bargaining or labor disputes. The last item, however, may become a bargaining subject if objectively foreseeable changes in employment conditions exist.

Impact

For companies, the guidelines mean that they should not assess matters solely based on whether a business plan has been announced. They should also examine in detail the workforce operations and changes in employment conditions that may occur during implementation. For labor unions and workers, simply describing the issue as opposition to a management decision is insufficient; it is important to verify through documentation what changes are expected in actual employment, pay, assignments, and working methods.

However, these guidelines are an administrative standard used by the Ministry of Employment and Labor. They should not be described as equivalent to a final court ruling in an individual case or as a conclusion that automatically applies to every dispute. The distinction between a business decision and a change in employment conditions may also vary depending on the specific facts and objective evidence.

When an application for labor-dispute mediation is filed, the Labor Relations Commission conducts mediation procedures involving the parties concerned. Whether industrial action is possible after mediation fails requires separate consideration of the applicable legal requirements and the legitimacy of the action. Therefore, the announcement of the guidelines alone does not establish the possibility or legitimacy of a strike at a particular workplace.

What to Watch Next

There are three key points to monitor. First, whether an actual workforce-operation plan for the Honam semiconductor project becomes more specific. Second, whether materials emerge showing that changes in employment conditions—such as job assignments, workplaces, duties, or work arrangements—can be objectively anticipated. Third, whether the labor union or employer applies for mediation through the Labor Relations Commission and what determination is made after the application.

At this stage, the basic rule for readers to remember is simple: the construction of a factory itself and specific changes to employees’ working conditions are not the same category. The assessment of an N% performance bonus also depends on whether it is linked to corporate profits and whether it constitutes an employment condition such as wages or benefits. The guidelines present this distinction, but the outcome of an individual labor dispute must be determined separately through the confirmed facts and official procedures.