First Day of the Yellow Envelope Act: Union Issues 'Declaration of War' to 97 Construction Companies

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On the first day of the enforcement of the so-called "Yellow Envelope Act," the Korean Construction Workers' Union, the largest construction labor union in the country, sent official documents to major general contractors, demanding collective bargaining. The union plans to proceed with negotiations with the general contractors in April, following procedures such as posting public notices regarding the bargaining request and verifying union membership after sending the official letters.

As the Korean Construction Workers' Union made its declaration from the very first day of the law's implementation, construction companies are on high alert. Industry insiders are especially concerned about the burden of negotiating with a specific union at the company level. They also point out that if the union demands wage increases through appropriate subcontracting fees and the application of paid holidays, this could lead to higher construction costs.

According to the Korean Construction Workers' Union on March 10, official documents demanding collective bargaining were sent simultaneously to 97 construction companies that include Hyundai Engineering & Construction, Daewoo Engineering & Construction, Lotte Engineering & Construction, and POSCO E&C, excluding Hanwha Engineering & Construction, GS Engineering & Construction, and Samsung C&T. A union official said, "The three companies with separate divisions for construction and plant sectors have applied to the Ministry of Employment and Labor for separate bargaining units, and for the rest of the companies, we are following procedures to request bargaining."

The Korean Construction Workers' Union is the largest construction labor union in Korea in terms of membership. The union consists of most personnel working at apartment construction sites, including carpenters, rebar workers, concrete workers, dump truck drivers, ready-mix concrete drivers, and tower crane operators, with a total membership of about 50,000.

With the implementation of the so-called "Yellow Envelope Act," which revised Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act, the stage is being set for subcontractor workers to formally demand negotiations with general contractors. According to the union, once negotiations with the general contractors begin, they plan to demand the payment of paid holiday allowances and the guarantee of appropriate subcontracting fees. In addition, the union will bring the right of construction workers to stop work for safety reasons at construction sites as a key agenda item.

The photo is unrelated to the article. Construction site.

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The construction industry, anticipating the law's enforcement, had already started preparing by signing advisory contracts with law firms and labor consulting firms and establishing response systems. However, companies remain cautious, as it is difficult to predict how the negotiations will unfold. Unlike manufacturing, construction sites are numerous and diverse, and each site differs greatly in terms of work, duration, costs, subcontractors, and contract conditions, making standardized bargaining difficult. An official at a major construction company stated, "We predict that if the union negotiations begin, it will lead to higher on-site costs. While we may consider increasing the scope of work done directly by the company instead of subcontracting, this is not realistically easy."

There is also growing speculation regarding the union's motives as the Korean Construction Workers' Union issued its declaration. Another official at a large construction company commented, "The biggest demand from the Korean Confederation of Trade Unions will likely be about how many union members can be deployed to sites. Since the construction market has weakened and the number of active sites has decreased, the issue will revolve around how many workers are hired. This will inevitably lead to further concerns about rising labor costs."

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