Company on the Brink of Collapse...Union Provoking a Crisis on the Edge (Comprehensive)

Simultaneous Pressure from Labor Unions on the Yellow Envelope Act and Serious Accident Punishment Act
Companies Say "'3 High Crisis'..."...Concerns Over Union Risks

The Korean Confederation of Trade Unions held a rally near the National Assembly building in Yeouido, Seoul, on the 6th, urging the revision of Articles 2 and 3 of the Trade Union Act and the guarantee of the Basic Labor Act. / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kiho Sung] The two major labor unions are exerting all-around pressure on the government, political circles, and companies, spearheading the so-called Yellow Envelope Act (amendments to Articles 2 and 3 of the Labor Union Act) and the Serious Accident Punishment Act. Amid an expected critical period marked by a clear contraction in consumption due to the economic downturn and the simultaneous impact of the ‘three highs (high inflation, high interest rates, and high exchange rates) crisis,’ there are concerns that the unions' pressure could instead trigger an economic crisis. The business community is attempting to defend itself by holding related forums, but the situation appears challenging.

According to political and labor sources on the 19th, the Korean Confederation of Trade Unions (KCTU) held a press conference in front of the National Assembly demanding the amendment of Articles 2 and 3 of the Labor Union Act. The day before, the KCTU and People’s Solidarity for Participatory Democracy held a press conference announcing the bill of the Task Force for the Amendment of Articles 2 and 3 of the Labor Union Act, which was finalized. The Task Force plans to hold two forums at the National Assembly on the 25th of this month and November 2nd regarding the bill introduced that day. Starting next month, they intend to push for legislative proposals through lawmakers who share the same will for amending Articles 2 and 3 of the Labor Union Act, alongside a national consent petition.

At the same time, the Korea Employers Federation held a forum titled ‘Problems with Limiting Compensation and Provisional Seizure for Illegal Disputes.’ Professor Lee Jung of Hankuk University of Foreign Studies emphasized, "The right to strike, a constitutional fundamental right, is not exercisable without limits; only legitimate strikes are exempted from liability considering the balance with property rights." He added, "Moreover, from a comparative law perspective, there is no legislative precedent that limits liability for damages caused by illegal strikes."

He continued, "Expanding the concept of employers and labor disputes contradicts Supreme Court precedents and could undermine legal stability, making it difficult to accept both legally and practically."

However, the KCTU is preparing to intensify its pressure. They plan to continue a sit-in in front of the National Assembly until December 8, conduct promotional campaigns during commuting and lunch hours, meet with lawmakers, and participate in the Task Force’s Wednesday candlelight cultural rallies.

The business community is responding with discomfort. Given the unpredictable economic conditions, union struggles can only exacerbate difficulties. A representative from a major corporation lamented, "With economic uncertainties escalating, it is difficult to establish next year’s management plans. Amid this, we worry about having to bear severe union risks."

In fact, major companies have entered a quasi-war-time management system, postponing or withdrawing investment plans. SK Hynix decided to suspend the construction of the M17 plant in Cheongju due to uncertainties in the semiconductor market. Hyundai Oilbank halted the expansion of crude oil refining and vacuum distillation facilities at its Seosan plant after investing 360 billion won.

The Serious Accident Punishment Act is also a factor adding pressure. The two major unions held a press conference at the National Assembly the day before, urging the Ministry of Employment and Labor to improve its industrial safety and health supervision administration for workers’ lives and safety. They referenced a recent fatal industrial accident involving a worker caught in machinery at an SPC-affiliated bakery and demanded immediate special inspections of workplaces where serious accidents have occurred.

The business community has continuously requested amendments to the Serious Accident Punishment Act. The Korea Employers Federation proposed improving the excessive penalty provisions of the related law at the ‘Industrial Safety for Serious Accident Prevention’ forum held last month. Lee Dong-geun, Vice Chairman of the Korea Employers Federation, stated, "It has been eight months since the Serious Accident Punishment Act was enacted, but there has been no clear effect in reducing accidents." He emphasized, "The new government is currently working on revising enforcement decrees to reduce uncertainties of the Act and establishing a ‘Serious Accident Reduction Roadmap’ aimed at building a corporate autonomous safety management system. We hope policies reflecting the voices from industrial sites will be established."

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