営業利益連動の成果給要求、政府が交渉の基準を示しました

This month’s issue — “a fixed percentage of operating profit as bonus”

Union demands that a fixed percentage of operating profit be set aside as a bonus pool have become a point of contention at the bargaining table. Citing the rise of such demands, and of disputes over corporate investment decisions, the Ministry of Employment and Labor issued its “Enforcement Guidelines on Management Performance Bonuses and Other Subjects of Labor Disputes” on 3 September 2026.

The Guidelines set out the government’s interpretation and operating standards on collective bargaining, mediation of labor disputes, industrial action and unfair labor practices. They guide the Labor Relations Commissions and labor inspections, but they do not bind the courts in individual disputes. The labor side, including the Korean Confederation of Trade Unions, has stated its opposition to the Guidelines.

Why these Guidelines now

The amended Trade Union and Labor Relations Adjustment Act (the “Trade Union Act”), effective 10 March 2026, widened the definition of a “labor dispute.” The amended provision reads as follows (unofficial translation).

• •Trade Union Act, Article 2 subparagraph 5 — “The term ‘labor dispute’ means a state of dispute arising between a trade union and an employer or employers’ association (…) due to disagreement in their assertions concerning the determination of working conditions, such as wages, working hours, welfare, dismissal, the status of workers and other treatment, and concerning business management decisions that affect working conditions, … .”

With “business management decisions that affect working conditions” added to the definition, questions followed on whether bonus pools, sales of business or investment decisions had also become subjects of bargaining and industrial action. The Guidelines are the government’s answer to those questions.

What the Guidelines say

Management performance bonuses — the method of calculation matters, not the label

The Guidelines divide bonuses into two kinds. A management performance bonus that concerns the determination of working conditions such as wages and welfare is a mandatory subject of bargaining. By contrast, a bonus demand linked at a fixed ratio to company profit — revenue, operating profit, net income and the like — is difficult to regard as a mandatory subject of bargaining or as a subject of mediation and industrial action.

The Guidelines give the following reasons. Operating profit is profit before interest, corporate tax and dividends, and is the source of the legal rights of third parties such as shareholders, creditors and the State. Net income includes non-operating income that is not directly linked to the provision of labor. A demand that a fixed share of company profit be distributed first as a bonus pool is regarded as restricting the essential content of the freedom of business.

The Guidelines do not, however, prevent the parties from discussing such matters voluntarily. The point is not that bargaining is prohibited, but that such demands are difficult to treat as subjects of the mandatory bargaining and industrial action protected by the Trade Union Act.

Business management decisions — the decision itself versus its implementation

Decisions such as mergers, splits, transfers and sales of business, building or relocating a plant, and introducing new technology such as AI are not, in themselves, mandatory subjects of bargaining. But where, in implementing the decision, detailed plans such as a workforce plan take shape and changes to working conditions — redundancy dismissals, reassignment, changes in work patterns — become objectively foreseeable, those aspects may become subjects of bargaining.

Labor Relations Commissions and unfair labor practices

During mediation, the Labor Relations Commission will recommend that the union replace such a demand with a reasonable one based on other criteria. If the union does not do so, the Commission will issue an administrative guidance decision on the ground that that part does not constitute a labor dispute. The Guidelines state that refusing to bargain over a profit-linked bonus demand, or over a business management decision itself, is difficult to treat as an unfair labor practice.

Points foreign-invested companies should watch

First, bonuses you already operate may still be subject to bargaining. Global bonus plans commonly set the payout rate by reference to group-wide revenue or operating profit achievement. What the Guidelines address is a demand that a fixed share of company profit be set aside as the bonus pool. The payment criteria, payout rate and timing of the bonus your company operates may still be bargained over as working conditions, so reading the Guidelines as “bonuses no longer need to be bargained” could lead your response astray.

Second, break down any demand you receive. A single “bonus” demand often mixes a request that the pool be fixed as a share of company profit with a request to change the payment criteria or payout rate. The company’s response depends on which part falls where.

Third, manage the implementation stage of headquarters decisions. Sales of business, reorganizations and AI adoption are often decided by headquarters. Even if the decision itself is not a subject of bargaining, it may become one from the point at which the local workforce plan takes concrete shape. The wording of internal notices and labor-management council materials becomes evidence of when that point was reached.

Fourth, whether a bonus counts as wages is a separate issue. Whether a management performance bonus is included in the average wage used to calculate severance pay is a question the courts have decided separately according to the payment criteria and actual practice, and it is distinct from these Guidelines.

What HR should review now

• •Are the payment criteria, funding and calculation method of your current bonus documented in your rules or collective agreement?
• •Can you explain in Korean how the payout rate of the global bonus plan is set (for example, whether it is linked to group results)?
• •When you receive a union demand, do you have a procedure for reviewing the “profit-linked pool” part separately from the “payment criteria and payout rate” part?
• •If a headquarters decision such as a sale, reorganization or AI adoption is planned, are you managing the timing at which the local workforce plan takes shape and the wording of any announcement?
• •Have you checked that labor-management council materials and internal notices do not contain wording that signals changes to working conditions?
• •Before deciding not to bargain on the basis of the Guidelines, is there a step for review by a labor law professional?

Summary

The message of the Guidelines is that what matters is what is being demanded, not the label “bonus.” There is now a government standard that a demand for a fixed share of company profit as the bonus pool is difficult to regard as a mandatory subject of bargaining — but the payment criteria and payout rate of a bonus, and changes to working conditions in the course of implementing management decisions, can still come to the bargaining table.

Before deciding not to bargain on the basis of the Guidelines, first break down which part of the demand falls where.

※ This article is general information based on the Ministry of Employment and Labor’s “Enforcement Guidelines on Management Performance Bonuses and Other Subjects of Labor Disputes” announced on 3 September 2026 and on publicly available legislation, and does not substitute for legal assessment of an individual matter. The provisions cited are those of the Trade Union and Labor Relations Adjustment Act as effective 10 March 2026.