"Encouraging Strong Union Struggles"... Business Community Raises Voices Against the 'Noranbongtu Law'

Opposition Party Pushes Passage in Regular National Assembly as Party Policy
"If Law Passes, It Will Grant Unconditional Immunity to Labor Unions"

[Asia Economy Reporter Kiho Sung] The business community is on high alert over the possibility of the passage of the "Amendment to the Trade Union and Labor Relations Adjustment Act (Yellow Envelope Act)," which prevents companies from claiming damages for losses caused by illegal strikes by labor unions. Opposition parties are determined to pass this bill. Given the current distribution of seats in the National Assembly, it is expected to pass smoothly through the relevant standing committee, the Environment and Labor Committee. The business sector fears that if the Yellow Envelope Act passes the National Assembly, illegal occupations and property damage by unions will become more severe. Experts point out that the law infringes on constitutionally guaranteed property rights and contradicts global trends.

According to political and business circles on the 17th, the Democratic Party of Korea and the Justice Party have adopted the Yellow Envelope Act as their party policy and emphasized its passage during this regular session of the National Assembly. The Yellow Envelope Act is named after the yellow envelopes used to deliver donations to support union members who were ordered to pay 4.7 billion won in damages during the 2014 Ssangyong Motor strike. The issue has reignited recently due to the strike by the subcontractors' union at Daewoo Shipbuilding & Marine Engineering and the occupation of the headquarters by the Hite Jinro union. The bill was also proposed in the 19th and 20th National Assemblies but was discarded due to the expiration of the term.

The business community is concerned that if the bill passes, it could encourage illegal actions by unions, causing severe damage to companies. The core of the bill is that companies affected by labor disputes cannot exercise their right to claim damages against unions or individual union members. Six related bills have already been proposed in the 21st National Assembly, and it is known that Chairman Jeon Hae-cheol is also preparing related legislation.

Moreover, as labor disputes have recently led to union occupation strikes, this issue has resurfaced as a major point of contention. Daewoo Shipbuilding & Marine Engineering experienced a 51-day strike starting June 22, during which the union occupied the first dock at the Okpo shipyard, halting production processes for over a month. The company estimates the loss during this period at 808.5 billion won. The company filed a lawsuit seeking damages of 47 billion won, excluding unconfirmed losses.

Hite Jinro's subsidiary, Suyang Logistics, saw its truck drivers demand a 30% increase in freight charges and staged sit-in protests at factories in Gangwon, Icheon, Cheongju, and the headquarters. This caused disruptions in product production and shipment, resulting in damages amounting to 10 billion won. The company filed a damage claim lawsuit for 2.77 billion won but withdrew the lawsuit following an agreement on the 9th. This effectively means the company surrendered to the union's intense strike.

The business community explains that damage claims are intended more to prevent future illegal occupation incidents than to compensate for the company's losses. Therefore, there are concerns that if the Yellow Envelope Act passes and grants immunity, unions at Daewoo Shipbuilding & Marine Engineering and Hite Jinro may engage in even more aggressive struggles. Although the situations at both companies have been temporarily resolved, there remains the possibility of friction with the unions during the implementation of the agreements.

Additionally, the business community opposes the restriction of damage claims despite losses caused by illegal strikes, arguing that it excessively infringes on the constitutional right to property. Hwang Yong-yeon, head of the Labor Policy Department at the Korea Employers Federation, criticized, "Prohibiting damage claims for companies that have suffered huge losses due to illegal strike actions is an excessive restriction. This contradicts civil law and does not align with global standards."

In particular, the current composition of the National Assembly makes it more likely that the bill will pass the Environment and Labor Committee, further darkening the outlook for companies. Currently, 10 of the 16 members of the Environment and Labor Committee belong to the Democratic Party and the Justice Party. The committee chairman is also from the Democratic Party. The Employment and Labor Law Review Subcommittee, a preliminary stage before the standing committee, is chaired by a Democratic Party member, with five members from the Democratic and Justice Parties participating, while only three members are from the People Power Party.

There are also criticisms that the bill is unprecedented globally. France legislated a similar Yellow Envelope Act in 1982, but the Constitutional Council ruled it unconstitutional. The UK raised the cap on damages for illegal union strike actions from 250,000 pounds to 1 million pounds in July this year, a fourfold increase, and also recognized claims for damages against individual union members. An executive at a major corporation said, "If the bill passes, more militant struggles that disregard the company's situation to enforce their opinions may occur. It is a law that is hard to find a precedent for anywhere in the world."

This content was produced with the assistance of AI translation services.