Are workers of an in-house subcontractor among the 'workers engaged in a major defence contractor' who may not strike? Decision 2016Do3185 on Article 41(2) of the Trade Union and Labour Relations Adjustment Act

Question

Article 33(1) of the Constitution guarantees workers the three labour rights, and Article 33(3) permits legislation to restrict or deny the right to collective action of workers engaged in major defence contractors. On that basis Article 41(2) of the Trade Union and Labour Relations Adjustment Act provides that, among the workers engaged in a major defence contractor designated under the Defence Industry Act, those engaged in the supply of electricity and water and in work that mainly produces defence materiel may not engage in industrial action, the range of that work being set by Presidential Decree. The question is whose workers fall within the phrase 'workers engaged in a major defence contractor', where the designated company has part of its business produce defence materiel for it through in-house subcontracting.

Decision 2016Do3185 raises that question on an indictment against a worker employed by an in-house partner company in the special ship division of a designated major defence contractor, who painted special ships, defence materiel, and took part in strikes. The court below acquitted him on the ground that Article 41(2) did not apply to a subcontractor's worker; the prosecutor appealed.

Material to check

The statutes are Article 41(2) and Article 88 of the Trade Union and Labour Relations Adjustment Act, Article 20 of its Enforcement Decree, Article 325 of the Criminal Procedure Act, and, as cited in the decision, Articles 12(1), 33(1), 33(3) and 37(2) of the Constitution and Article 1(1) of the Criminal Act. Article 41(2) forbids industrial action by the designated workers; Article 20 of the Enforcement Decree defines 'work that mainly produces defence materiel' as work needed to complete defence materiel, including manufacture, processing, assembly, maintenance, regeneration, improvement, performance testing, heat treatment, painting and gas handling; Article 88 punishes breach of Article 41(2) with imprisonment of up to five years or a fine of up to fifty million won, which the decision describes as the heaviest statutory penalty among the penal provisions of that Act; Article 325 of the Criminal Procedure Act requires an acquittal where the offence charged is not a crime or the facts are not proved. As the decision states, Article 37(2) of the Constitution provides principles of minimal restriction and proportionality for legislation limiting fundamental rights. Article 1(1) of the Criminal Act, which the decision lists among its referenced provisions but does not set out in its reasons, provides that the existence and punishment of a crime follow the law at the time of the act.

The decision is Decision 2016Do3185 (18 July 2017), which dismissed the prosecutor's appeal. The court below is the Ulsan District Court judgment of 5 February 2016 (2015No970), which held that Article 41(2) did not apply to the defendant's industrial action and acquitted him. The judgment of the Supreme Court was unanimous, the reporting Justice being Justice Kim Jae-hyung.

Possible readings

The decision reads Article 41(2) against the constitutional reservation in Article 33(3). As it states, Article 33(1) proclaims the principle of maximal guarantee of the three labour rights and Article 33(3) reserves to statute the restriction or denial of collective action by workers engaged in major defence contractors, to prevent harm to national security from their industrial action in the special situation of confrontation between North and South. Because the Act abolishes the right to strike itself, the core of collective action, for certain workers, and because smooth operation of major defence contractors is indispensable to national security, the class of workers whose fundamental rights are seriously restricted must, the decision holds, be construed strictly and restrictively, in the light of Article 37(2) of the Constitution and the principle of strict construction of penal provisions derived from the principle of legality.

Applying that method to the words, content, system and purpose of the provision, the decision holds that where a company designated as a major defence contractor has part of its business produce defence materiel through in-house subcontracting, workers belonging to the subcontractor are not 'workers engaged in a major defence contractor' within Article 41(2). Two limits in the provision's own structure support this: the Minister of Commerce, Industry and Energy designates major defence contractors individually under the Defence Industry Act and related rules, and Article 41(2) reaches, among the workers engaged in the designated company, only those engaged in electricity and water supply and the work specified by Presidential Decree. The decision adds that the fact alone that a worker works at the same site as the designated company's workplace and supplies labour producing major defence materiel does not make that worker 'engaged in' the designated company, where the worker belongs to the subcontractor, an independent business operator not designated as a major defence contractor; to hold otherwise would expand a penal provision against the defendant impermissibly.

The decision confines its holding to the question of whose workers are covered; it does not decide whether the defendant's painting of special ships fell within the work listed in Article 20 of the Enforcement Decree. That article, on its own words, includes painting among the tasks needed to complete defence materiel, so a task of that kind is capable of being within the enumerated work; but whether a given worker performs such work, and whether that worker is one 'engaged in' the designated company, remain separate questions, and the decision answered only the second.

What the decisions held

Decision 2016Do3185 dismissed the prosecutor's appeal and affirmed the judgment of the Ulsan District Court of 5 February 2016. The court below had held that, because the defendant was a worker of a subcontractor of Non-party 1, the designated major defence contractor, Article 41(2) did not apply to his industrial action, so the facts charged did not constitute a crime and an acquittal was required; the Supreme Court held that this accorded with the law it had stated and that the court below had not misunderstood the scope of Article 41(2).

The indictment, as the decision summarises it, charged that the defendant worked from 12 July 2013 to 20 March 2015 as a painter of special ships, defence materiel, at Non-party 2, an in-house partner company within the special ship division of Non-party 1, and although forbidden to take industrial action under the Trade Union and Labour Relations Adjustment Act, struck from about 08:00 to 09:00 on 6 November 2014 and on 32 occasions in all up to 23 January 2015. The Supreme Court held that Article 41(2) did not apply to the industrial action of this subcontractor's worker, and that the acquittal below was proper.

Points left open

The decision rests on the arrangement it describes: production of defence materiel carried out by an independent subcontractor not designated as a major defence contractor, at the designated company's site. It states that the ban reaches the workers engaged in the designated company who perform the enumerated work, but it does not decide whether the same answer holds for other arrangements, such as workers dispatched to the designated company or temporary workers, and it does not identify what factual markers, other than the identity of the employer and the site of the work, would place a worker within the ban.

The decision also leaves undecided what follows where the subcontractor is itself designated as a major defence contractor, and whether the outcome could differ on facts showing closer subordination to the designated company than the in-house partner relationship it found. It gives no view on the validity of Article 41(2) itself or on any consequence of the strikes other than the criminal liability under Article 88, and it does not decide whether the defendant's painting work fell within the work listed in Article 20 of the Enforcement Decree.

When to reconsider

We revisit this brief if Article 41(2) of the Trade Union and Labour Relations Adjustment Act or Article 20 of its Enforcement Decree is amended, if the rules on designating major defence contractors change, or if a later Supreme Court decision extends or narrows the holding to workers dispatched to, or otherwise performing work at, a designated major defence contractor.

Statutes referred to

• 헌법 제12조, 제33조, 제37조
• 형법 제1조
• 노동조합 및 노동관계조정법 제41조, 제88조
• 노동조합 및 노동관계조정법 시행령 제20조
• 형사소송법 제325조

Decisions referred to

• 대법원 2017. 7. 18. 선고 2016도3185 판결 · Decision ledger

Verification status

The texts read for this brief were read at the National Law Information Center on 24 October 2026: the decision in its published holdings, summary and reasons, and the current texts of Article 1 of the Criminal Act, Articles 41 and 88 of the Trade Union and Labour Relations Adjustment Act, Article 20 of its Enforcement Decree, and Article 325 of the Criminal Procedure Act. The decision quotes the words of Article 41(2) of the Trade Union and Labour Relations Adjustment Act, and states in its own words the penalty fixed by Article 88; the current texts use the same words and the same penalty.