[Editorial] Corporate Investment and Profit Allocation Cannot Be Subject to Labor Disputes

President Lee Jae-myung’s statement that it is difficult to regard the distribution of corporate operating profits and investment in semiconductor plants as matters subject to labor disputes is a valid point. Decisions on where and how much a company invests, whether to build new plants, and how to allocate profits go beyond ordinary labor-management bargaining over working conditions; they are core managerial judgments that determine a company’s survival and competitiveness.

The Samsung Electronics labor union has stated that it intends to address the Honam semiconductor project in future labor-management negotiations, arguing that it could affect the reassignment and treatment of union members. In response, the Ministry of Employment and Labor also drew a clear line, stating that managerial decisions themselves—such as corporate investment and factory expansion—are not included among matters subject to collective bargaining or labor disputes.

However, this controversy should not be attributed solely to excessive demands by some labor unions. The revised Trade Union Act expanded the scope of labor disputes to include “business management decisions” that affect working conditions. The possibility of conflicting interpretations over whether investment and plant allocation affect working conditions was fully foreseeable from the time the law took effect.

If corporate investment decisions are transformed into matters requiring union consent or bargaining, companies will be unable to respond swiftly to changes in the market. In industries such as semiconductors, where technological change is rapid and international competition for investment is fierce, delays in decision-making lead directly to a loss of competitiveness. If even the choice of where within Korea to build a plant becomes subject to labor disputes, global companies will begin to reconsider investing in Korea altogether.

The argument that a certain percentage of operating profits must be distributed to workers is also difficult to reconcile with the principles of a market economy. Operating profit is not a resource that is generated with certainty every year. When profits arise, companies must make comprehensive judgments about research and development, capital investment, debt repayment, preparation for future losses, and shareholder returns. If shareholders and companies bear the risk of losses while only profits are forcibly shared at a fixed rate, the incentives for investment and innovation will inevitably weaken.

Of course, when plant relocations or business restructuring directly change wages, employment, or work locations, labor and management may discuss the corresponding compensation and protective measures. But discussing the specific effects on working conditions is an entirely different matter from making a company’s investment decision itself subject to union approval.

It is not enough for the President or the Ministry of Employment and Labor to say, each time an individual case arises, that it is “not a matter subject to dispute.” A system in which a company’s core decision-making depends on the interpretation of the administration in power or the official in charge creates another form of regulatory uncertainty.

The government and the National Assembly should clearly stipulate in law that essential managerial judgments—such as corporate investment, the establishment and relocation of plants, mergers and acquisitions, business transfers, capital allocation, and profit disposition—are excluded from the scope of labor disputes. The impact on working conditions should also be limited not to abstract or indirect effects, but to cases that are direct and specific.

The government should not call for investment worth hundreds of trillions of won in the semiconductor industry while, at the same time, leaving in place a legal environment in which investment decisions can trigger labor disputes. If it wants companies to invest, it must first improve the institutional framework so that businesses can invest quickly in a predictable environment.

Protecting labor rights and safeguarding managerial rights are not a matter of choosing one over the other. Workers’ legitimate rights should be guaranteed, but corporate autonomy over investment, innovation, and the disposition of profits must also be respected. This presidential remark should serve as an opportunity to correct the ambiguous scope of disputes under the Yellow Envelope Act (Revised Labor Commission Act) and eliminate the uncertainty that obstructs corporate investment and job creation.

2026. 7. 22.

Center for Free Enterprise (CFE)

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Original title: [논평] 기업의 투자와 이익 처분은 노동쟁의 대상이 될 수 없다

Author: Center for Free Enterprise (CFE)

Date: 2026-07-22

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=comment&pn=1&idx=29303