Management Task Force: "Yellow Envelope Act Needs Clear Criteria for Scope and Application"

Inquiry Reflecting Voices from the Industrial Field Submitted to the Ministry of Employment and Labor on November 6

The Management Sector's Task Force on Responding to the Amendment of Articles 2 and 3 of the Trade Union Act stated, "With the current amended law, the criteria for defining the scope of employers and the subjects of labor disputes are ambiguous," and argued that supplementary legislation is needed to minimize confusion in the industrial field.

On November 6, the Management Sector's Task Force on Responding to the Amendment of the Trade Union Act announced that it had selected over 500 questions from various industrial sites-including economic organizations, major companies by sector, foreign-invested companies, and small and medium-sized enterprises-and submitted them to the Ministry of Employment and Labor.

The "Management Sector's Task Force on Responding to the Amendment of the Trade Union Act" is composed of major domestic and international economic organizations and key companies by sector, including the Korea Employers Federation, the Korea Chamber of Commerce and Industry, the Federation of Korean Industries, the Korea Federation of SMEs, the Korea Federation of Mid-sized Enterprises, and the American Chamber of Commerce in Korea. Since its establishment in September to reduce confusion caused by the amendment of the Trade Union Act, the task force has been collecting diverse opinions from the industrial field.

Companies expressed concerns that, under the current amended law, they do not know by what standards and to what extent employer status will be recognized, and they focused their inquiries on the criteria for determining employer status in various forms of inter-company cooperation.

In particular, the management sector raised concerns that "the legal obligations of the principal contractor for safety and health, based on the Occupational Safety and Health Act and the Serious Accidents Punishment Act, should not serve as grounds for expanding employer status in a way that disadvantages companies."

Additionally, companies warned that the scope of "business management decisions affecting working conditions," which can be the subject of labor disputes, is too broad and could allow unions to directly infringe on management rights. They expressed the opinion that "when contractual relationships are formed between principal and subcontractor parties through mutual agreement, and the contract is completed through its fulfillment, this is not a matter of a unilateral 'decision' by the principal contractor and therefore should not be subject to labor disputes."

Concerns were also raised that restricting claims for damages against employers' illegal industrial actions would make it virtually impossible for companies to recover damages. The management sector noted, "Although it is stipulated that there is no liability for damages when a labor union or worker causes harm to a company to protect their interests in response to an employer's illegal act, it is unclear when and by whom the employer's illegal act is determined."

Ryu Gijeong, Executive Vice President of the Korea Employers Federation and head of the task force, pointed out, "To minimize confusion in the industrial field, clear criteria for the scope of employers and subjects of labor disputes are essential. If companies cannot accept these criteria, it will inevitably lead to prolonged legal disputes."

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