How Far Do Prior-Consent Clauses and Special Hiring Clauses in Collective Agreements Bind the Employer? The Boundary Between Personnel Authority and the Freedom to Hire

Question

A collective agreement is an agreement concluded through bargaining between a trade union and an employer, and Article 33(1) of the Trade Union and Labor Relations Adjustment Act renders void any part of the rules of employment or of an employment contract that violates the standards concerning working conditions and other treatment of workers set out in the collective agreement. The question addressed in this report is how far a clause binds the employer where the agreement goes beyond standards for working conditions and directly constrains the employer's exercise of personnel authority, such as dismissal, or its decision on whom to hire.

The question has two strands. First, where an agreement required prior consent for personnel actions concerning trade union officers and the employer carried out a redundancy dismissal without that consent, is the dismissal void, and when may it exceptionally not be void? Second, where an agreement provided for the special hiring of the lineal family members, etc. of a union member who died from an occupational accident, is that clause void as contrary to good morals or other social order within the meaning of Article 103 of the Civil Act?

Both questions rest on the same structure. The employer has freedom with respect to hiring and personnel matters, based on, among other things, the freedom to choose an occupation under Article 15 and property rights under Article 23(1) of the Constitution, but it may restrict that freedom itself by concluding a collective agreement. The trade union concludes the agreement by exercising the right to collective bargaining under Article 33(1) of the Constitution. It is therefore necessary to distinguish between how the wording of the agreement is interpreted and whether the content so interpreted has effect in light of mandatory provisions and social order.

This brief does not assess the validity of any particular clause of an agreement or the justification of any particular dismissal. It sets out the materials to be checked and the diverging interpretations within the scope of what the summaries of holdings of two judgments, rendered in 2012 and 2020, state. It also notes that the provisions of the Labor Standards Act and the Trade Union and Labor Relations Adjustment Act referred to in the judgments may have been amended since, and should therefore be read on the basis of the statutes in force at the time of the dismissal or of the conclusion of the agreement.

Material to check

First, the provisions of the Labor Standards Act restricting dismissal can be checked. Article 23(1) prohibits an employer from dismissing, etc. a worker without just cause. Article 24 requires, for dismissal for managerial reasons, an urgent managerial necessity (Article 24(1)), efforts to avoid dismissal and the selection of those to be dismissed according to reasonable and fair criteria (Article 24(2)), and notice to the workers' representative at least 50 days before the intended date of dismissal together with consultation in good faith (Article 24(3)); a dismissal made upon satisfying these requirements is deemed to be a dismissal with just cause (Article 24(5)). Since what the statute requires is consultation, whether the agreement demanded something stronger, namely consent, is a separate issue.

Second, the provisions of the Trade Union and Labor Relations Adjustment Act on collective agreements can be checked. Article 29(1) gives the representative of a trade union the authority to bargain and to conclude collective agreements; Article 31 requires a collective agreement to be drawn up in writing and signed or sealed by both parties and to be reported to the administrative agency within 15 days of its conclusion, and allows the administrative agency to order the correction of unlawful content upon a resolution of the Labor Relations Commission. Article 33 sets out the effect of the standards in an agreement, and subparagraph 2 of Article 92 provides penalties for violations of certain matters in an agreement, such as the grounds for, and important procedures of, discipline and dismissal, safety and health, and accident relief.

Third, Article 103 of the Civil Act and the constitutional provisions can be checked. Article 103 of the Civil Act renders void any juristic act whose content is contrary to good morals or other social order. Article 15 of the Constitution provides for the freedom to choose an occupation, Article 23(1) for the guarantee of property rights, and Article 33(1) for workers' rights to association, collective bargaining and collective action. In 2016Da248998 the Court referred to these provisions together in weighing the autonomy of collective agreements against the freedom to hire and the fairness of hiring opportunities.

Fourth, the wording of the agreement itself. It can be checked whether the personnel clause distinguishes between consent and consultation, whether that distinction is drawn between trade union officers and ordinary union members, and whether the personnel actions subject to consent are specified, such as appointment and removal, transfer, and training. In the case of a special hiring clause, it can be checked how the scope and requirements of those eligible for hiring, the form of employment and the number of persons are stated.

Fifth, records showing the course of bargaining and performance. In the case of a redundancy dismissal, the following can be placed in chronological order: when and what the employer proposed in order to obtain consent, the number of consultations and the measures to avoid dismissal, the grounds and reasons the trade union gave for its opposition, and whether industrial action took place. In the case of a special hiring clause, the reasons for and circumstances of concluding the agreement, the period for which it has been maintained, and whether it has in fact been observed can be checked.

Sixth, materials showing the effect on hiring. The size of the workplace and the number of workers, the method and number of general hires, the number and proportion of workers hired through special hiring, and whether there are rules of employment to the same effect correspond to the factors enumerated by the majority opinion in 2016Da248998. Without these materials, it is difficult to determine from the wording of the clause alone whether it violates social order.

Possible readings

One line of interpretation gives weight to the wording of the prior-consent clause. On this reading, where an agreement deliberately distinguished between consent for personnel actions concerning trade union officers and consultation for those concerning union members, consent means a meeting of minds between labour and management, and it cannot be read down to consultation merely because a redundancy dismissal is a matter of high-level managerial judgment. The summary of holdings in 2010Da38007 adopted this reading.

Another line of interpretation looks to the exception. On this reading, a personnel action taken without consent is in principle void, but is valid where the trade union has abused its right of prior consent or has itself waived its exercise. Abuse is explained as including cases where a serious act of bad faith on the part of the trade union caused the procedural defect on the employer's side, or where the necessity and reasonableness of the personnel action were objectively evident and the employer made sincere and earnest efforts, yet the trade union opposed it outright without presenting any reasonable grounds or reasons. On this reading, both the employer's efforts and the trade union's response are subject to assessment.

As regards special hiring clauses, there is a reading that puts the autonomy of collective agreements first. On this reading, a collective agreement results from the exercise of the right to collective bargaining directly guaranteed by the Constitution and is the product of the autonomy of collective agreements, so courts should be cautious about paternalistic intervention; and since the employer has itself restricted its freedom to hire, the clause cannot be concluded to be void unless there are special circumstances, such as an excessive restriction or a significant impairment of the fairness of hiring opportunities. This is the reading of the majority opinion in 2016Da248998.

The opposing line puts a fair hiring order first. On this reading, measures to protect the bereaved families of victims of occupational accidents are to be encouraged, but such measures must not sacrifice job seekers who urgently need work or protect only the bereaved families of some of the deceased workers, and hiring criteria unrelated to the needs of the enterprise or to job competence may be assessed as contrary to social order if they discriminate against job seekers or other union members without reasonable grounds. This is the position of the dissenting opinion in 2016Da248998.

The two judgments are alike in that they respect in principle the authority the employer has itself restricted while locating the exception in special circumstances, but they differ as to where the exception comes from. In the prior-consent case, the issue is the manner in which the trade union exercised its right; in the special hiring case, it is the social reasonableness of the content of the agreement itself. The summaries of holdings do not state who must prove those special circumstances, so how the burden of proof should be viewed is a point to be checked against the original texts of the judgments and other judgments.

Which reading to adopt is for the reader to decide after matching the wording of the agreement and the circumstances of its conclusion with the bargaining records and the actual state of performance. This brief does not reach a conclusion on the validity of any particular clause or the justification of any particular dismissal.

What the decisions held

Supreme Court Judgment 2010Da38007 rendered on 28 June 2012 held that, where a collective agreement distinguished its terms so as to require prior consent for personnel actions concerning trade union officers and prior consultation for those concerning union members, as regards personnel actions concerning trade union officers "it is appropriate to interpret the provision as requiring prior 'consent' in the sense that personnel authority must be exercised after exchanging views with the trade union in good faith and reaching a 'meeting of minds' between labour and management." It also held that, even where there is a prior-consent clause, "where it is recognised that the trade union has abused its right of prior consent or has itself waived the exercise of its right of prior consent, a personnel action taken by the employer without such consent should also be regarded as valid."

The same judgment interpreted removal from office within "appointment and removal" in the collective agreement as meaning personnel actions that terminate the employment contract, such as ordinary dismissal, disciplinary dismissal and redundancy dismissal, and held that the redundancy dismissal of trade union officers without prior consent of the trade union could not be regarded as having satisfied a lawful dismissal procedure. Nevertheless, on the ground that the necessity and reasonableness of the redundancy dismissal were objectively evident and that, despite the company's sincere and earnest efforts to reach agreement, no agreement was reached because the trade union opposed the redundancy dismissal itself without presenting reasonable grounds or reasons and resorted to unlawful industrial action, it held that this constituted an abuse or waiver of the right of prior consent and that the redundancy dismissal could not be regarded as void. In its operative part, the Court dismissed all the appeals and ordered the plaintiffs to bear the costs of the appeal.

The majority opinion in Supreme Court en banc Judgment 2016Da248998 rendered on 27 August 2020 stated that "since collective agreements cannot be excluded from the application of Article 103 of the Civil Act, if the content of a collective agreement is contrary to good morals or other social order, its legal effect must be denied," and held that a collective agreement providing for the hiring of a union member's lineal family members, etc. upon the occurrence of certain events, such as death from an occupational accident, "cannot be concluded to be contrary to good morals or other social order unless there are special circumstances, such as its reaching the extent of excessively restricting the employer's freedom to hire or resulting in a significant impairment of the fairness of hiring opportunities." As factors for that assessment, it cited the reasons for and circumstances of concluding the agreement, the suitability of the means to the purpose, the requirements that those eligible for hiring must meet, whether there are rules of employment of the same kind, the period for which the agreement has been maintained and whether it has been observed, and the effect on general hiring and on job seekers as discernible from the form of hiring and the number of workers hired.

In the case at hand, the same judgment, taking together that the content of compensation for occupational accidents is itself an important working condition, that the clause shows consideration for the socially vulnerable and contributes to substantive fairness and is an effective and appropriate means for the purposes of compensation and protection, that labour and management had performed the clause over a long period, and that the actual disadvantage to job seekers could not be regarded as great, held that the lower court's determination that the clause was void as contrary to social order involved a misapprehension of the legal principles. The dissenting opinion took the view that hiring criteria unrelated to the needs of the enterprise or to job competence may be assessed as contrary to social order where they discriminate against job seekers or other union members without reasonable grounds. In its operative part, the Court reversed, within the part of the judgment below against Plaintiff 1, the part concerning the claim against the defendants for a declaration of intent of acceptance, remanded that part to the Seoul High Court, and dismissed Plaintiff 1's remaining appeal and Plaintiff 2's appeal.

Practical checklist

This section is not advice but a set of questions that may be asked when checking the records. First, questions may be asked about the wording of the agreement. Whether the personnel clause distinguishes between consent and consultation, whether that distinction varies according to the persons concerned (officers and union members) or the type of personnel action (appointment and removal, transfer, training), and whether there are signs that the terms were deliberately chosen during bargaining can be checked against the bargaining minutes and the amendment history of the agreement.

Second, questions may be asked about the efforts to reach consent. The following can be matched by date: when, and with what materials, the employer presented the necessity of the dismissal, the measures to avoid it and the criteria for selecting those to be dismissed; on what grounds and for what reasons the trade union opposed it; whether it put forward alternatives; and how bargaining came to break down.

Third, questions may be asked about circumstances indicating abuse or waiver. Whether there are circumstances that could be regarded as an act of bad faith on the part of the trade union, whether it refused to discuss the matter at all, and, if there was industrial action, what its course and nature were can be checked in the records. These circumstances should be read together with the records of the employer's efforts.

Fourth, questions may be asked about the effect of a special hiring clause. The reasons the clause was created and the period for which it has been maintained, the actual number of hires and their proportion relative to general hiring, the requirements imposed on those eligible for hiring, whether there are rules of employment to the same effect, and the degree of disadvantage caused to job seekers can be checked against the materials. This is strictly a list of materials to be checked; the conclusion is for the reader to reach.

Glossary

A prior-consent clause refers to a clause in an agreement providing that, when taking a personnel action, the employer must obtain the trade union's prior consent or approval, or discuss the matter with the trade union and reach a meeting of minds. It is distinguished from a prior-consultation clause, which merely requires a procedure for gathering views, and 2010Da38007 took this distinction as the starting point for interpreting the agreement.

Abuse and waiver of the right of prior consent refers to the exception under which a personnel action taken without consent may be regarded as valid despite the existence of a prior-consent clause. The summary of holdings gives, as examples of abuse, a serious act of bad faith on the part of the trade union and outright opposition without reasonable grounds.

The autonomy of collective agreements refers to the idea of respecting labour and management determining working conditions and other matters for themselves through bargaining; the majority opinion in 2016Da248998 regarded the collective agreement as the product of the autonomy of collective agreements between labour and management institutionally guaranteed by the Constitution, and relied on this as the basis for holding that courts should be cautious about paternalistic intervention.

The freedom to hire refers to the employer's freedom to decide which workers to hire and by what criteria and methods. In 2016Da248998 the Court found its basis in, among other provisions, Article 15 and Article 23(1) of the Constitution, and held that the employer may itself restrict it by a collective agreement.

Sources and limitations

The source of the provisions is the current text published by the National Law Information Center. Articles 23 and 24 of the Labor Standards Act are as in Act No. 21533 [effective 8 October 2026]; Articles 29, 31, 33 and 92 of the Trade Union and Labor Relations Adjustment Act are as in Act No. 21045 [effective 10 March 2026]; Article 103 of the Civil Act is as in Act No. 21454 [effective 17 March 2026]; and Articles 15, 23 and 33 of the Constitution of the Republic of Korea are as in the Constitution wholly amended on 29 October 1987. The date of checking is 16 October 2026.

The source of the judgments is the issues, summaries of holdings and operative parts of the two judgments published by the National Law Information Center. The quoted summaries of holdings render the original wording as it stands, and company names, the number of persons dismissed and the specific wording of the agreements have not been stated beyond what appears in the summaries of holdings.

The texts of the Labor Standards Act and the Trade Union and Labor Relations Adjustment Act in force at the time of the dismissal and of the conclusion of the agreements, the full reasoning of the judgments, and the lower-court judgments were not checked in this brief. Since the amendment notes in the current provisions do not show every difference from the text in force at the time of the cases, the wording at that time remains to be checked separately.

Points left open

Where consent breaks down at a workplace with a prior-consent clause, how much effort the employer must make for it to be assessed as sincere and earnest may be read differently from case to case. There is room to clarify further what weight is to be given to the number of bargaining sessions, changes in the proposals made, and records of the consideration of alternatives.

How prior consent under an agreement relates to the consultation procedure under Article 24(3) of the Labor Standards Act also remains an open question. Whether the fact that the statutory consultation took place affects the assessment of a breakdown of consent under the agreement, and conversely whether the process of seeking consent under the agreement substitutes for the statutory consultation, were not addressed in the summaries of holdings of the two judgments.

The point on which the majority and dissenting opinions diverged in assessing the validity of the special hiring clause, namely whether the autonomy of collective agreements or the fairness of hiring opportunities should come first, may arise again in clauses providing for the preferential hiring of particular persons on grounds other than being bereaved family of victims of occupational accidents. Whether such clauses are assessed by the same standard cannot be concluded from the summaries of holdings alone.

A further issue is what form of claim is available in an action seeking performance of a clause of an agreement where that clause is held not to be contrary to social order. The operative part of 2016Da248998 reversed and remanded the part concerning the claim for a declaration of intent of acceptance, but the requirements and scope of that claim do not appear in the summary of holdings.

When to reconsider

This report will be rewritten if the provisions of the Labor Standards Act restricting dismissal or the provisions of the Trade Union and Labor Relations Adjustment Act on collective agreements are amended, or if the Supreme Court issues a new ruling on the interpretation of prior-consent clauses or on the validity of hiring-related clauses in collective agreements.

In that event, the boundary between personnel authority and the freedom to hire will be set out again on the basis of the statutes in force at the time of the dismissal and of the conclusion of the agreement, within the scope of what the issues and summaries of holdings of the two judgments and the new judgment state.

Statutes referred to

• 근로기준법 제23조, 제24조
• 노동조합 및 노동관계조정법 제29조, 제31조, 제33조, 제92조
• 민법 제103조
• 대한민국헌법 제15조, 제23조, 제33조

Decisions referred to

• 대법원 2012. 6. 28. 선고 2010다38007 판결 · Decision ledger
• 대법원 2020. 8. 27. 선고 2016다248998 전원합의체 판결 · Decision ledger

Verification status

The cited provisions (Articles 23 and 24 of the Labor Standards Act; Articles 29, 31, 33 and 92 of the Trade Union and Labor Relations Adjustment Act; Article 103 of the Civil Act; and Articles 15, 23 and 33 of the Constitution of the Republic of Korea) were checked against the current text published by the National Law Information Center on 16 October 2026. The cited judgments (Supreme Court Judgment 2010Da38007 rendered on 28 June 2012 and Supreme Court en banc Judgment 2016Da248998 rendered on 27 August 2020) were checked against the issues, summaries of holdings and operative parts in the original texts published by the National Law Information Center. The text of the statutes in force at the time of the dismissal and of the conclusion of the agreements, and the full reasoning of the judgments, were not checked.