The Government Also Declared the 'Yellow Envelope Act' as 'Impossible'... Business Community Strongly Opposes, Calling It an Infringement on Management Rights

Government "Active Response" Labor-Management Commission "Civil Law Violation"
Business Circles Intensify Criticism of "Management Rights Infringement"
Major Opposition and Labor Claim "Right to Strike"... Full-Scale Confrontation Escalates

Lee Eun-joo, Emergency Response Committee Chair of the Justice Party, and candidates for party office held a rally on the steps in front of the National Assembly main building on the 6th, urging the enactment of the so-called 'Yellow Envelope Act' (Amendments to Articles 2 and 3 of the Labor Union Act) within the year. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Moon Chaeseok] As the government has expressed opposition to the so-called 'Yellow Envelope Act' (Amendment to the Labor Union and Labor Relations Adjustment Act) being promoted by the opposition party, the business community has once again pointed out the absurdities of the law. They strongly oppose the passage of the law, presenting arguments that it is highly likely to be unconstitutional and could lead to infringements on management rights such as facility investment and personnel matters for executives and employees.

On the 17th, the Federation of Korean Industries (FKI) released an analysis titled "Amendment to the Labor Union Act: Many Side Effects Including Unconstitutionality and Encouragement of Strikes," making these claims. They presented five arguments: the law is likely unconstitutional, contradicts existing legal order, restricts management rights, is greatly disconnected from industrial realities, and will increase labor-management conflicts and damages. Among these, the claim regarding restrictions on management rights is notable as a strong expression of opposition from the business community following the government's active stance to block the amendment.

"Intervening in Disagreements, Infringing on Management Rights Such as Technology Investment and Personnel"

The core of FKI's criticism is that the Yellow Envelope Act allows intervention in disagreements between labor and management, thereby infringing on management's inherent rights such as automation facilities, introduction of new technologies, and personnel decisions.

According to the FKI, the proposed amendment adds to the concept of labor disputes not only issues related to working conditions but also "disputes arising from disagreements between parties to labor relations" (Article 2, Clause 5). This means that if there is any disagreement between labor and management, strikes are permitted under the pretext that management actions such as technology introduction, personnel decisions, or factory relocation are unfair.

The same clause (Article 2, Clause 5) also includes "dismissal for business reasons" within the scope of labor disputes, allowing unions to legally strike over restructuring or mergers. This contradicts existing Supreme Court precedents stating that "matters involving high-level business decisions such as layoffs or organizational consolidation cannot be subjects of labor disputes."

99% of Strike Protection Measures Target the Korean Confederation of Trade Unions... Criticism as a "'Protection Law'"

In late 2020 under the Moon Jae-in administration, regarded as pro-labor, the Supreme Court ruled that the notification of "illegal union" status to the Korean Teachers and Education Workers Union (KTU) was unlawful, effectively allowing strike actions by non-active union members (dismissed union members), thereby expanding the "right to strike" in the labor sector.

Subsequently, citing the need to ratify core International Labour Organization (ILO) conventions, the three labor laws (Labor Union Act, Public Officials Union Act, Teachers Union Act) were passed at the end of 2020 and implemented from July last year, resolving long-standing labor demands. Because of this, voices from both business and labor circles have pointed out that after the Supreme Court ruling on the KTU, the government's system of notifying "illegal union" status was abolished, weakening restrictions on union strikes and acting as a catalyst for expanding the scope of industrial actions within workplaces.

The Yellow Envelope Act, regarded as a "pro-Korean Confederation of Trade Unions (KCTU) protection law," includes provisions limiting companies' ability to file damages lawsuits against strikes. Regardless of potential illegality, government investigations highlight that over 99% of corporate strike damage claims are filed against the KCTU, which is identified as a problem.

Despite Opposition from the Ruling Party, Government, and Business Community... Opposition Party's Determination to Pass During the "Golden Time"

Following the Daewoo Shipbuilding & Marine Engineering strike incident in June, the Yellow Envelope Act amendment agenda has emerged in the political sphere, with the opposition party emphasizing that this year is the right time for the law's passage. A representative example is the call for legislation within the year by Lee Eun-ju, Emergency Committee Chairperson of the Justice Party, and party leadership candidates at the National Assembly on the 6th. Lee stated, "We will tackle this with determination to resolve the 47 billion won damage claim bomb dropped on Daewoo Shipbuilding subcontracted workers before it explodes," adding, "I will make the Yellow Envelope Act the raison d'?tre of the 21st National Assembly."

Employment Minister Lee Jeong-sik, the head of the relevant ministry, expressed a willingness to "actively respond," and Kim Moon-soo, chairman of the Economic, Social and Labor Council, a social dialogue body, described the bill as "undermining the basics of civil law." Meanwhile, the business community is advancing the argument of "infringement on management rights," creating an atmosphere where the "right to strike" is escalating into an all-out confrontation between labor and management. Expectations are growing that fierce battles over the law's passage will continue for some time, as both sides regard it as an "agenda that must never be surrendered."

Chu Kwang-ho, head of the Economic Department at the FKI, said, "If the amendment to the Labor Union Act is implemented, strikes are likely to become more frequent, and the damages will ultimately be passed on to shareholders, workers, and local small business owners," emphasizing, "Now is the time not to grant impunity for illegal acts but to improve labor laws that are 'tilted' toward unions and to strictly respond to illegal activities."

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