Knowledge · HR & Labor

Labor-Management Council

Labor-Management Council

📂HR & Labor⏱2-min read📊Practical🔗9 related

What is a labor-management council?

In one line
A statutory body made up of equal numbers of employee and employer representatives that consults on management and labor matters. Companies must establish one whether or not they have a labor union.
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⚡ Summary in 3 lines
  • A statutory consultative body with equal employee and employer representation
  • Required whether or not you have a union
  • Member elections and minutes retention are common trouble spots

Once a labor-management council actually starts running, the company has a channel for dialogue that meets at set times, without fail. Until then, issues like a shift overhaul or bonus distribution surfaced late, through team leader talks, anonymous boards, or, at worst, exit interviews. Now they go on the quarterly agenda and into the minutes. In particular, resolution items can only be carried out with agreement from both labor and management, so part of what the employer used to decide alone becomes a matter for consultation by design.

A council is required at any business or workplace with 30 or more regular employees, and it must meet at least once every 3 months. The council’s bylaws must be submitted to the Ministry of Employment and Labor within 15 days of establishment, and minutes must be kept for 3 years. Agenda items fall into three groups. Productivity improvement, profit sharing, and training are consultation items. Welfare facilities, the company welfare fund, and grievance handling methods are resolution items. Management plans and quarterly production results are items the employer must report. It may look like a labor union, but it works differently. A union bargains over wages and working conditions, concludes a collective agreement, and holds the right to take industrial action. A council has no means of industrial action and works through consultation and resolution. Companies often overlook that they must also appoint a grievance handler. Details may be amended, so check the latest laws and Ministry of Employment and Labor guidance.

The most common misstep in practice is how employee representatives are chosen. If HR collects recommendations from each department ("How about this person?") and simply appoints them, the validity of everything that council resolves can later be challenged. Employee representatives must be elected directly by employees, and any sign of employer involvement makes the election itself open to challenge. Seating managers as members is risky for the same reason. Some companies assume that having a union exempts them from the council, but the two are separate obligations. Failing to hold regular meetings or to appoint grievance handlers brings administrative fines, and not establishing a council at all can bring criminal fines. Above all, skipping meetings does not make complaints go away. They resurface through far costlier channels, such as complaints to the labor office or mass resignations.

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💡 In plain English
It is like a tenants’ association that meets regularly with building management. If it doesn’t meet, problems surface through other channels instead.
Why it matters in practice
Many companies assume this does not apply because they have no labor union. But the labor-management council is a statutory body that applies regardless of union status, so confirm that first.
Origin and sources

Established under the Act on the Promotion of Workers’ Participation and Cooperation, this body lets employees and employers advance their shared interests through participation and cooperation. It differs in nature and function from a labor union, whose purpose is collective bargaining.

Source · Act on the Promotion of Workers’ Participation and Cooperation
An example

Company A, an auto parts maker near Seoul, has 140 employees, annual revenue of KRW 32 (≈ US$1) billion, and no labor union. After announcing a plan to change from 2 shifts to a 3-group, 2-shift rotation, 9 production workers quit within 2 weeks. When the CEO asked, "Do we even have a labor-management council?", the HR team went back to the paperwork first. (Hypothetical example)

  1. The HR manager checked and found that the council’s bylaws had been drafted in 2019 but no meeting had been held in 3 years, and 2 of the 4 employee-side members had already left the company.
  2. They started by re-electing the members. They split the vote into 4 districts (production, quality, logistics, and administration) and posted a company-wide election notice. The administration team only observed the ballot count, leaving a record that the company did not interfere in the election.
  3. At the first regular meeting, the Production Team 1 employee representative said, "We support the 3-group, 2-shift rotation itself, but first tell us how much night pay will drop." The plant manager agreed to prepare 3 pay simulation options by the next meeting.
  4. At the second meeting, they treated the shift overhaul as a consultation item and the rest room expansion and grievance procedure as resolution items. The minutes state the condition that the agreed Option 3 would run as a 3-month pilot and then be revisited.
  5. Six months into the pilot, voluntary resignations among production staff fell from 9 to 2 per quarter. With 12 sets of meeting minutes and the member election records on file, the labor inspection the following year raised no findings related to the council.
Related terms
Grievance Procedure · Internal Reporting ChannelThe formal channel for receiving, investigating, and resolving employee complaints and reports of unlawful or unfair conduct. Anonymity and protection from retaliation are what make it trustworthy.ComplianceThe activities and systems that keep a company in line with laws, regulations, and internal rules. It is a core pillar of compliance management and internal control.Employee EngagementA state in which employees are emotionally connected to their work and organization and put in energy voluntarily, without being told to.Town Hall MeetingAn open meeting where leadership shares the company’s status with all employees in one place and takes questions freely.Organizational CultureThe sum of the values, beliefs, and ways of acting that members share. The unseen rules of 'how things work around here.'Rules of Employment · Drafting and Unfavorable ChangesInternal rules that set working conditions and workplace discipline. Workplaces above a certain size must draft and file them, and employee consent is required to change them to employees’ disadvantage.Labor UnionAn organization that employees form independently to maintain and improve working conditions and raise their status. It operates on the three labor rights guaranteed by the Constitution.Employee Representative · Written AgreementThe person who represents employees in signing written agreements with the employer on matters set by law, such as introducing working-hour systems. The legality of the selection process determines whether the agreement is valid.Counting Regular Employees · The 5, 30, and 50 ThresholdsHow to calculate the headcount that determines which labor laws apply. It uses an average, the total number of employee-days over a set period divided by operating days, rather than the number of employees on a single date. The calculation method and who is counted differ from law to law.
Learning paths that include this term
🧭 12 Labor Terms Every HR Manager Should KnowFor HR managers who also handle general affairs, and HR staff taking on labor administration for the first time
Training linked to this term
📚Leadership WorkshopNanum Consulting corporate training · In-person or onlineSee course →
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Last updated 13 Sep 2026 · Reviewed by John Kim

FAQ

A labor union and a labor-management council are separate systems with different purposes and functions. The presence of a union does not necessarily exempt a company from the duty to establish a council, so please check the requirements under the law.
The law sets a threshold based on the number of regular employees. Because the threshold and detailed requirements may be amended, please check the latest statutes and Ministry of Employment and Labor guidance before applying them.
The law sets the interval for regular meetings, and extraordinary meetings can be held when needed. Failing to hold meetings or keep records can result in findings from inspectors.
Collecting agenda items in advance and making follow-through on the previous meeting’s agreements the first item makes meetings substantive. It also works well as a forum for hearing from the workforce ahead of policy changes.