Rules of Employment · Drafting and Disadvantageous Changes
Rules of Employment
What are rules of employment?
- The basic internal regulation on working conditions and conduct
- Disadvantageous changes require majority employee consent
- Rules that aren’t posted or communicated are hard to rely on
What rules of employment really change is the limit of individual agreements. Even if the CEO and an employee signed a separate deal, any term below the rules of employment is void to that extent, and the standard set by the rules takes its place. Conversely, an annual leave bonus or condolence leave written in the rules applies to everyone, even if the employment contract doesn’t mention it. So editing a single line of the rules is not a paperwork fix but a change that touches the working conditions of hundreds of people at once.
The procedure splits into two tracks. For changes that benefit employees or are neutral, consulting the majority union or a majority of employees is enough, but a change to employees’ disadvantage requires their consent. Hearing employees’ opinions and obtaining their consent are entirely different procedures. Whether a change is disadvantageous is judged by the employee group, not by the company’s circumstances. When advantages and disadvantages are mixed, as in an overhaul that raises one item while cutting another, the items are bundled and compared as a whole. Shortening the retirement age, abolishing allowances, and adding grounds for disciplinary action are generally treated as disadvantageous changes.
The way consent is obtained is itself a requirement. Employees must be given a chance to gather and discuss without employer involvement before a majority vote is confirmed, and signatures collected by a department head going around with an approval folder are often overturned later on the grounds that they were not given freely. Workplaces with 10 or more regular employees must also file the rules, but filing is an enforcement requirement, not a condition of validity, so a filing receipt does not cure a defect in consent. Standards and requirements may be amended, so check the latest laws and regulations.
The most common point of failure in practice is the mistaken belief that “no objection means consent.” If you send a company-wide email, get no replies, and treat that as implied consent, the whole clause can be shaken years later in a severance or allowance lawsuit. If the change is invalidated, the pre-change rules revive for existing employees, creating retroactive payment liability and a two-tier structure in which standards differ by hire date within the same company. Keep in mind, too, that internal regulations, bylaws, and guidelines count as rules of employment whatever they are called, as long as they set working conditions.
Jongmu KimSpecialist in corporate talent development and job competency building
Hwi KimCEO of HRDIST & talent development system consultantUnder Korea’s Labor Standards Act, workplaces above a certain headcount of regular employees must draft and file rules of employment. Any change that is disadvantageous to employees requires the consent of a labor union representing a majority of employees or, absent one, of a majority of employees (Articles 93 and 94, among others).
This is the story of Company A, an auto parts manufacturer with 320 employees and annual revenue of about KRW 80 billion (≈ US$59,853,400). To address ordinary wage issues, it moved its 600% regular bonus into base pay and abolished its seniority allowance, planning the pay system overhaul on a four-month timeline. The problem: only 138 employees were union members, so union consent alone would not complete the process. (Hypothetical example)
- When the HR head laid out the proposed overhaul item by item, total pay rose by KRW 1.8 million (≈ US$1,350) per person per year, but the seniority allowance disappeared. The company’s labor attorney drew the line: even if the total goes up, abolishing an allowance is a change to employees’ disadvantage.
- The 138 union members were only 43% of all employees, short of the majority-union requirement. So the labor-management council settled on “getting consent from at least 161 of all 320 employees” and shifted to a collective consent procedure.
- The company held 12 briefing sessions across three factory lines and headquarters. At the union branch head’s request, team leaders stayed out of the room, and each group got 30 minutes for a discussion among employees only.
- Because the 47 employees on two-shift schedules couldn’t attend daytime sessions, the company added two sessions during the night shift. The HR planning manager promised that “votes against will be counted in full,” and a secret written ballot followed.
- With 91% turnout (291 employees) and 214 votes in favor, the company secured majority consent, filed the revised rules with the local Ministry of Employment and Labor office, and posted them on the intranet. It kept the briefing materials and ballots on file, and in the first year after taking effect there were zero lawsuits or complaints challenging their validity.