Will the Yellow Envelope Act Be Passed in the July Extraordinary Session? Legislative Momentum Grows Amid Ruling-Opposition Clash and Business Opposition

The "Yellow Envelope Act" (Amendment to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) passed the National Assembly's Environment and Labor Committee (Environ-Labor Committee) on July 28, drawing attention to whether it will be processed during the July extraordinary session of the National Assembly. The Democratic Party of Korea reaffirmed its legislative commitment by signaling its intention to pass the bill, and the government also showed a flexible attitude. However, the opposition parties and business circles are strongly opposing the bill, expressing concerns about legal uncertainty and the expansion of employer liability.

Jin Sungjoon, Policy Committee Chair of the Democratic Party of Korea, stated at a party countermeasures meeting on the morning of July 29 regarding the Yellow Envelope Act, "We will ensure that the Yellow Envelope Act is processed during the July extraordinary session of the National Assembly." Jin emphasized, "We will make sure that workers no longer suffer from excessive damages lawsuits or are driven to take their own lives because their constitutional rights are not properly protected."

Opposition to the rollback of Articles 2 and 3 of the Labor Union Act, immediate revision urged. Yonhap News.

He further explained, "This bill aims to guarantee the bargaining rights of subcontracted workers, limit excessive claims for damages by employers, realize fundamental labor rights, and promote labor-management negotiations." He criticized, "Once again, the People Power Party has consistently opposed the bill. This is truly a deeply anti-labor attitude."

Previously, on July 28, the Environ-Labor Committee held consecutive meetings of the bill review subcommittee and the full committee, passing the amendment to the Yellow Envelope Act. Lawmakers from the People Power Party made their opposition clear by leaving before the vote. Both the Democratic Party and the government have stated their intention to process the bill during the July extraordinary session of the National Assembly.

The Yellow Envelope Act strengthens the responsibility of primary contractors for subcontracted workers, expands the scope of legitimacy for industrial actions, and restricts the conditions under which companies can claim damages against workers participating in strikes. Notably, this amendment introduces a new provision allowing employers to be exempt from liability for damages caused by union or worker actions such as strikes. While the law is to take effect six months after promulgation, an additional provision stipulates that the exemption clause may also apply to damages that occurred before the law's implementation.

The Democratic Party is hopeful about the bill's prospects, emphasizing that the wording and liability requirements have become clearer than when the veto was exercised last year. Kim Jooyoung, ruling party secretary of the Environ-Labor Committee, predicted, "Compared to the bill that passed last year, there are many clearer aspects, so I expect conflicts will be somewhat reduced."

The Presidential Office also supported the policy of processing the bill during the July extraordinary session. Spokesperson Kang Yujeong stated, "There is room to gather labor and management opinions and to develop concrete and reasonable measures even after the law is passed," adding, "There is a preparation period before implementation."

On the other hand, business circles and foreign companies are strongly opposing the bill. The Korea Employers Federation criticized, "We cannot hide our dismay that the bill passed by reflecting only the demands of the labor sector." The European Chamber of Commerce in Korea (ECCK) stated in a press release, "The expanded definition of employer undermines the principle of legal clarity, and a vague and expanded definition could turn businesspeople into potential criminals and shrink business activities," even mentioning the possibility of withdrawing from the Korean market.

Kim Hyeongdong, opposition secretary of the Environ-Labor Committee from the People Power Party, also said, "I will recommend to the leadership that we should filibuster."

Meanwhile, the Yellow Envelope Act was passed by the 21st and 22nd National Assembly in December 2023 and August last year, respectively, but was discarded due to President Yoon Suk-yeol's exercise of the veto.

Kim Jihyun, Law Times Reporter

※This article is based on content supplied by Law Times.