[Yellow Envelope Act Implementation ②] Rising Anxiety Among Labor and Management: "Uncertainty" vs "Diminished Rights"

The Non-Regular Workers Protection Act, implemented in 2007, was enacted without sufficient deliberation, leading to opposition from both labor and management. The business community objected, claiming it was excessive protection for non-regular workers, while labor groups denounced it as a law that would only increase the number of non-regular workers. The so-called “Yellow Envelope Act” is following a similar path. Management is most concerned not about the expansion of bargaining itself, but about the heightened uncertainty and unpredictability it brings. They argue that it is difficult to anticipate when and on what issues subcontractor unions might bring matters to the bargaining table. Labor groups, on the other hand, questioned whether the bargaining rights of subcontracted workers would actually be adequately guaranteed as intended by the law. They also expressed concern that procedural hurdles could accumulate, resulting in only a superficial improvement.

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The business community cites the inability to predict when subcontractor unions will make bargaining demands and the scope of negotiations as their biggest concerns. While the government has issued guidelines, many point out that these cannot cover the wide variety of situations and detailed procedures that may arise at actual worksites.

An official from an economic organization, speaking on condition of anonymity, said, "It is difficult for companies to determine which subcontractor union might make bargaining demands, and it is also burdensome that such demands could be made without sufficient information about the counterpart company." In industries like automotive and shipbuilding, where partner companies are intricately interconnected, there are particular concerns that bargaining at one workplace could trigger a chain reaction, spreading to unions at other partner companies.

The possibility of conflicting interests among subcontractor unions is also a variable. The amended Labor Union Act, in principle, applies a single bargaining channel, but the Labor Relations Commission can separate bargaining units due to differences in working conditions, employment types, or established bargaining practices. In such cases, multiple subcontractor unions at the same workplace may each sign separate collective agreements. The problem is that if the contents of these agreements differ, there is no clear standard for determining which agreement should take precedence. This could lead to so-called “agreement conflicts,” with divergent standards for wages, welfare, and other working conditions at the same workplace, even when negotiations involve the same principal employer.

Company personnel also expressed dissatisfaction with unclear detailed standards. One business community representative said, "When a bargaining demand is made, it must be posted at the workplace, but it is unclear whether this means only on bulletin boards, or also in workers' work areas, break rooms, entrances, cafeterias, or whether it must be posted at every entrance. Even such seemingly trivial aspects are likely to cause problems during the early stages of implementation, so we are approaching this cautiously."

The actions of principal employer unions are also seen as a potential concern. If these unions raise employment issues such as the introduction of automation or expanded use of artificial intelligence (AI) as negotiation topics, it could affect bargaining by subcontractor unions as well. Choi Youngki, former president of the Korea Labor Institute, said, "Companies are likely to respond to subcontractor union bargaining while monitoring the reactions of regular worker unions. However, it is unlikely that a structure where regular worker unions and subcontractor unions jointly pressure the principal employer will become the norm."

Kim Younghun, Minister of Employment and Labor, is adjusting his glasses before speaking at the meeting of related ministers on the implementation of the amended Labor Union Act held at the Government Seoul Building in Jongno-gu, Seoul on March 4, 2026. Photo by Cho Yongjun.

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Labor groups criticize that the enforcement decree and interpretive guidelines risk undermining the legislative intent of expanding subcontracted workers' bargaining rights. In particular, they argue that the bargaining procedures and criteria for determining employers may act as new obstacles at the worksite.

Above all, there are major concerns that the bargaining rights of subcontracted workers could be procedurally restricted. According to the amended Labor Union Act, when a subcontractor union negotiates with the principal employer and there are multiple subcontractor unions at a workplace, they must undergo a single bargaining channel procedure. The Ministry of Employment and Labor has clarified in its manual that if there is more than one bargaining unit-such as when there are multiple subcontractor unions recognized as employers or where higher-level unions differ-the bargaining channel must be unified.

When the need for separate bargaining units arises, the Labor Relations Commission decides whether to allow separation. Labor groups argue that this added procedure acts as an additional barrier, making timely bargaining more difficult. If individual separations become widespread, the unions' collective power may be dispersed, making it harder to achieve substantial bargaining outcomes. They claim this could lead to so-called “shell bargaining,” where bargaining is technically possible but real results are limited. Jeon Hoil, spokesperson for the Korean Confederation of Trade Unions, stated, "Because the single bargaining channel is still being enforced for all subcontractor unions, the bargaining procedure remains complicated and the bargaining rights of subcontracted workers are restricted."

There are also concerns about potential delays in decisions by the Labor Relations Commission. Since the commission is responsible for determining employer status and whether to separate bargaining units, a surge of cases could delay deliberations. This, in turn, could postpone bargaining itself and result in prolonged delays in remedying subcontracted workers' rights.

Lee Jihyun, spokesperson for the Federation of Korean Trade Unions, acknowledged that there have been some improvements in bargaining accessibility but added, "Because the internal single bargaining channel structure among subcontractor unions remains, it is difficult to say that bargaining rights are fully guaranteed for all subcontractor unions. The government should not stop at presenting a manual, but must also implement additional institutional measures to ensure that the expanded scope of employers and effectiveness of bargaining, as intended by the amendments, are fully realized at worksites."

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