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ACT ON THE PROMOTION OF WORKER PARTICIPATION AND COOPERATION

ACT ON THE PROMOTION OF WORKER PARTICIPATION AND COOPERATION

Act No. 5312, Mar. 13, 1997

Amended by Act No. 6098, Dec. 31, 1999

Act No. 6510, Aug. 14, 2001

Act No. 8295, Jan. 26, 2007

Act No. 8372, Apr. 11, 2007

Act No. 8815, Dec. 27, 2007

CHAPTER I

General Provisions

Article 1 (Purpose)

The purpose of this Act is to keep industrial peace and to contribute to the development of the national economy by promoting the common interests of labor and management through their participation and cooperation.

Article 2 (Good Faith Obligation)

Employers and workers shall consult with each other in good faith and on the basis of mutual trust.

Article 3 (Definition)

Terms used in this Act are defined as follows :

1. The term ßÖLabor-Management Councilß×means a consultative body which is established to promote the welfare of workers and to seek the sound development of

businesses through the participation and cooperation of workers and employers;

2. The term ßÖworkerß×means a worker as provided in Article 2 of the Labor Standards Act; and

3. The term ßÖemployerß×means an employer as provided in Article 2 of the Labor Standards Act.

Article 4 (Establishment of Labor-Management Councils) (1) A Labor-Management Council (hereinafter referred to as - 2 -

a ßÖCouncilß×) shall be established in each business or workplace which is vested with the right to decide working conditions: Provided that this shall not apply to businesses or workplaces with less than 30 permanent workers.

(2) When one business has separately located its workplaces, a Council may be established in each of these workplaces. Article 5 (Relationship with Trade Union)

Collective bargaining or all other activities of a trade union shall not be affected by this Act.

CHAPTER II

Composition of Council

Article 6 (Composition of Council)

(1) A Council shall be composed of an equal number of members representing employers and members representing workers, which shall be at least three but not more than ten. (2) While members representing workers(hereinafter referred to as ßÖworkersßÓmembersß×) shall be elected by workers, and if there is a trade union composed of a majority of workers, the representatives of the trade union or the persons appointed by the trade union shall be workers' members.

(3) Members representing employers (hereinafter referred to as ßÖemployersßÓmembersß×) shall be the representatives of the business or workplace concerned, or the persons appointed by such representatives.

(4) Matters as to the election and appointment of workersßÓ members or employersßÓmembers shall be prescribed in the Presidential Decree.

Article 7 (Chairman and Secretary)

(1) There shall be a chairman in a Council and the chairman shall be elected by mutual vote from among the members. In this case, each one from workersßÓmembers and employersßÓ members may be a co-chairman.

(2) The chairman shall represent the Council and oversee - 3 -

meetings thereof.

(3) Labor and management, each, shall have a secretary in charge of dealing with the clerical work of the Council, such as the recording of meeting results, etc.

Article 8 (Term of Office of Members)

(1) The term of office of members shall be three years and renewable.

(2) The term of office for a member elected to fill a vacancy shall be the remaining term of the predecessor.

(3) A member shall continue to perform his/her duties until his/her successor is elected even though the term of his/her office has expired.

Article 9 (Status of Members)

(1) Members shall be non-standing and unpaid.

(2) An employer shall not unfavorably treat workersßÓ members in connection with the performance of their duties as members of the Council.

(3) The hours spent by a member to attend the Council and engage in activities directly related thereto, and stipulated in the Council bylaws under Article 18 shall be regarded as hours worked.

Article 10 (Duty of Employer)

(1) No employer shall intervene in or interfere with an election of workers' members.

(2) An employer shall offer basic convenience, such as use of place, etc., for activities of workersßÓmembers. Article 11 (Order of Correction)

If an employer unfavorably treats workers' members in violation of Article 9 (2) or intervene in or interfere with an election of workers' members in violation of Article 10 (1), the Minister of Labor may order him/her to correct such violation. CHAPTER III

Operation of Council

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Article 12 (Meetings)

(1) A Council shall hold meetings once every three months. (2) A Council may hold an extraordinary meeting if it is deemed necessary.

Article 13 (Calling of Meetings)

(1) The chairman shall convene and preside over meetings of the Council.

(2) If the representatives of either labor or management requests a meeting to be held, specifying the purposes of the meeting in writing, the chairman shall accept the request. (3) The chairman shall notify each member of the date, place, agenda, etc. of a meeting seven days prior to the meeting.

Article 13-2 Deleted. Article 14 Deleted. Article 15 (Quorum)

Meetings shall be held with the presence of a majority of workers' members and a majority of employers' members, and a decision shall be made with the approval of at least two-thirds of the members present.

Article 16 (Opening of Meetings)

Council meetings shall be open to the public; however, they may not be open to the public upon a resolution of the Council. Article 17 (Duty of Confidentiality)

Members of a Council shall not reveal any confidential matters which come to their knowledge at a meeting of the Council.

Article 18 (Bylaws of Council)

(1) A Council shall establish bylaws (hereinafter referred to as "Council bylaws") governing the organization and operation of the Council, and shall submit it to the Minister of Labor within fifteen days from the date of the establishment of the Council. The same shall apply in case where any part of the - 5 -

bylaws is amended.

(2) Necessary matters concerning what should be stipulated by the Council bylaws and the procedures for establishing and revising them shall be prescribed by the Presidential Decree. Article 19 (Keeping of Minutes)

A Council shall draw up and keep minutes of its meetings containing each of the following subparagraphs:

1. Date, time and place of each meeting;

2. Members present at each meeting;

3. Contents of consultations and matters decided at each meeting; and

4. Other matters discussed at each meeting. (2) The meeting minutes taken pursuant to paragraph (1) shall be kept for three years from the date they are taken. CHAPTER IV

Functions of Council

Article 20 (Matters Subject to Consultation)

(1) Matters subject to consultation at meetings of a Council shall be as follows:

1. Improvement of productivity and gain sharing;

2. Hiring, posting, education and training of workers;

3. Workers' grievance handling;

4. Improvement of occupational safety and health and other work environments and promotion of workersßÓhealth;

5. Institutional improvement for personnel and labor management;

6. General rules of employment adjustment, such as reassignment and transfer, retraining, dismissal for managerial or technological reasons;

7. Administration of working hours and recess hours;

8. Institutional improvement of wage payment methods, wage structure, wage system, etc;

9. Introduction of new machines and technologies or improvement of work processes;

10. Establishment or revision of work rules;

11. EmployeesßÓstock ownership plans and other supports for - 6 -

the creation of workersßÓwealth;

12. Matters concerning rewards given to workers for their work-related inventions, etc.

13. Welfare promotion for workers;

14. Installation of employee surveillance equipment within a workplace;

15. Matters concerning support the maternity protection of female workers and reconciliation between work and family life; and

16. Other matters concerning labor-management cooperation (2) A Council may make a decision as to matters specified in paragraph (1) according to the quorum rules under Article

15. Article 21 (Matters Subject to Resolution)

An employer shall seek a resolution of the Council on any of the matters falling under the following subparagraphs:

1. Establishment of basic plans for the education and training and skills development of workers;

2. Setting up and management of welfare facilities;

3. Establishment of an employee welfare fund ;

4. Matters not resolved by the Grievance Handling Committee; and

5. Establishment of various labor-management cooperative committees.

Article 22 (Matters Requiring Report, etc.)

(1) An employer shall report or explain any of the matters described in the following subparagraphs in good faith at a regular meeting:

1. Matters concerning the general management plans and results;

2. Matters concerning the quarterly production plans and results;

3. Matters concerning the manpower plans; and

4. Economic and financial conditions of the enterprise. (2) WorkersßÓmembers may report and explain workersßÓ demands.

(3) If an employer fails to make a report or give an explanation pursuant to paragraph (1), workersßÓmembers may request the employer to submit documents relevant to matters described in each subparagraph of paragraph (1), and the - 7 -

employer shall respond to such a request in good faith. Article 23 (Public Notice of Resolutions)

A Council shall promptly notify workers of matters resolved by it.

Article 24 (Implementation of Resolutions)

Both workers and employer shall implement in good faith resolutions made by the Council.

Article 25 (Voluntary Arbitration)

(1) In cases falling under any of the following

subparagraphs, a dispute may be settled by an arbitration organization set up within the Council by agreement between workersßÓmembers and employersßÓmembers, or may be referred to arbitration by the Labor Relations Commission or other third parties:

1. In case where the Council fails to make a resolution on matters subject to resolution under Article 21l; and

2. In case where there is any disagreement on the interpretation, implementation, etc., of resolutions made by the Council.

(2) If an arbitration decision under paragraph (1) is rendered, the matters concerned shall be deemed to be decided by the Council, and both workers and employer shall comply with the decision.

CHAPTER V

Grievance Handling

Article 26 (Members of Grievance Handling Committee) All businesses or workplaces shall have a grievance handling committee in order to hear and handle workersßÓ grievances : Provided that this shall not apply to businesses or workplaces with less than 30 permanent workers.

Article 27 (Composition and Term of Grievance Handling Members)

(1) A grievance handling committee shall consist of not - 8 -

more than three members representing labor and management, and in case of a business or workplace where a Council is established, the Council shall select such members from among its members and in case of a business or a workplace where no Council is established, the employer shall appoint them. (2) The provision of Article 8 stipulating the term of Council members shall apply mutatis mutandis to the term of members of a grievance handling committee.

Article 28 (Grievance Handling)

(1) If a member of a grievance handling committee hears from a worker about grievances, he/she shall inform the worker concerned of the measures taken and results thereof within ten days.

(2) Matters deemed difficult for members of the grievance handling committee to deal with shall be brought before the Council and dealt with through discussion at its meeting. - 9 -

CHAPTER VI

Supplementary Provisions

Article 29 (Delegation of Authority)

The authority of the Minister of Labor pursuant to this Act can be delegated in part to heads of local labor offices, as prescribed by the Presidential Decree.

CHAPTER VII

Penal Provisions

Article 30 (Penal Provision)

A person falling under any of the following subparagraphs shall be punishable by a fine not exceeding ten million Won:

1. A person who refuses or obstructs, without justifiable reasons, the establishment of a Council under Article 4 (1);

2. A person who fails, without justifiable reasons, to implement a resolution made by a Council in

contravention of Article 24; or

3. A person who fails, without justifiable reasons, to implement an arbitration decision in contravention of Article 25 (2).

Article 31 (Penal Provision)

If an employer fails, without justifiable reasons, to comply with a correction order issued under Article 11 or the obligation to submit documents under Article 22 (3), he/she shall be punishable by a fine not exceeding five million Won. Article 32 (Penal Provision)

If an employer fails to hold a Council meeting regularly in violation of Article 12 (1) or appoint members of the grievance handling committee under Article 25, he/she shall be punished by a fine not exceeding two million won.

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Article 33 (Fine for Negligence)

(1) If an employer does not submit bylaws of the Council in violation of the provision of Article 18, he/she shall be punished by a fine for negligence not exceeding two million won.

(2) The fine for negligence prescribed in paragraph (1) shall be imposed and collected by the Minister of Labor under the conditions prescribed by the Presidential Decree. (3) A person who is not satisfied with the imposition of a fine for negligence pursuant to paragraph (2) may raise an objection to the Minister of Labor within 30 days from the date of the notification of the imposition.

(4) If a person subject to the imposition of a fine for negligence to paragraph (2) raises an objection pursuant to paragraph (3), the Minister of Labor shall notify, without delay, the competent court of this and the court so notified shall proceed with a trail on a fine for negligence pursuant to the Non-Contentious Case Litigation Procedure Act.

(5) If an objection is not raised nor is the fine for negligence paid within the period prescribed in paragraph (3), the fine for negligence shall be collected according to the process for recovery of national taxes in arrears. Addenda

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation. Article 2 (Revision of Other Laws)

Parts of the Workers Vocational Skills Development Act shall be revised as follows :

"The provisions of Article 20" in Article 20 (2) 3 shall be changed to "Article 21".

Article 3 (Relationship to Other Laws)

References to the previous Act on the Promotion of Worker Participation and Cooperation or any provisions thereof in other Acts or subordinate statues at the time this Act enters into force shall be deemed as references to this Act or the corresponding provisions thereof, if any, in lieu of the previous Act or its provisions.