[Why&Next] Yellow Envelope Act Sparks Violent Clashes at CU ... Convenience Stores on High Alert

The indefinite general strike by the CU branch of the Cargo Solidarity under the Korean Confederation of Trade Unions (KCTU), which is demanding improved working conditions for cargo workers, is escalating to an extreme. This escalation is due to a fatality and two injuries among the Cargo Solidarity union members during a rally calling for direct negotiations with the operator, BGF Retail, and its logistics subsidiary, BGF Logistics. As Cargo Solidarity union members blocked access to some CU logistics centers and production plants during the strike, franchise owners are now reporting a decline in sales and resulting damages due to the halt in product shipments.

Due to the strike by the Cargo Solidarity under the Korean Confederation of Trade Unions, some CU logistics centers and production facilities have been shut down, causing disruptions in the supply of products including ready-to-eat meals. A notice regarding the situation is posted at a CU store. Reader tip

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According to the Gyeongnam Provincial Police Agency and fire authorities on April 20, at around 10:32 a.m., a 2.5-ton cargo truck collided with rally participants in front of the CU Jinju Logistics Center in Yeha-ri, Jeongchon-myeon, Jinju, Gyeongnam. As a result, one union member in his 50s was transported to the hospital in cardiac arrest but ultimately passed away. Two other union members sustained injuries-one serious and one minor-but their lives are not in danger.

The police suspect that the accident occurred as a union member tried to block a departing logistics vehicle. At the same site, a vehicle from the union side also rammed into a police barricade, injuring a police officer in his 20s on the head, after which the vehicle rushed toward the main gate of the center. This rally, organized by the Gyeongnam branch of Cargo Solidarity to urge joint negotiations with BGF Retail, began on April 16 and was scheduled to continue until May 11. A police official stated, "We are currently working to clarify the exact circumstances."

On the afternoon of the 20th, members of the Cargo Solidarity Union gathered at the BGF Logistics Jinju Center in Jeongchon-myeon, Jinju-si, Gyeongnam, and sang the "March for the Beloved" to commemorate their colleague who passed away earlier that morning at the rally calling for the protection of the rights of CU logistics workers. Photo by Yonhap News.

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This strike is part of the indefinite general strike launched by Cargo Solidarity since April 7 to demand improved treatment for delivery drivers. The CU branch of Cargo Solidarity is also urging the principal employer, BGF Retail, to come to the negotiation table. This demand is based on the revised Trade Union Act, known as the "Yellow Envelope Act" (the amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act), which took effect on March 10. The revised Yellow Envelope Act expands bargaining rights to include subcontracted and specially employed workers and alleviates legal burdens related to strikes, thereby strengthening overall labor rights.

Logistics work for CU is handled by BGF Logistics, a subsidiary of BGF Retail. BGF Logistics operates 25 logistics centers nationwide, and each center directly employs individual cargo drivers. However, the striking cargo workers of the CU branch are not directly affiliated with BGF Logistics; instead, they are specially employed workers belonging to transportation companies individually contracted by the logistics centers.

Taking the implementation of the Yellow Envelope Act as an opportunity, these workers are demanding that BGF Retail and BGF Logistics engage in talks to address longstanding issues such as stagnant transportation fees and working conditions. They have blocked the main entrances of key logistics centers-Hwaseong and Anseong in Gyeonggi, Naju in Jeollanam-do, and Jinju in Gyeongnam-preventing vehicle departures. Since April 17, they have also blocked access to the BGF Food factory in Jincheon, Chungbuk.

Park Jonggon, Head of the Gwangju Regional Headquarters of Cargo Solidarity, stated, "While the cost of living rises by 2-3% each year, freight rates increase by only 0.5-0.7%, making it effectively a negative," and added, "For the first time in 20 to 30 years, our union members are requesting dialogue with CU's management. Over the past 90 days, we have sent six official letters, but the responses have only been order reductions and claims for damages, which amount to union suppression."

Another issue raised by cargo workers concerns "substitute driver fees" (daechabi). This refers to the cost workers have to personally pay to find someone to deliver goods on their behalf if they are ill or otherwise unable to work. Yoon Jungwook, Head of the CU branch of the Seoul-Gyeonggi Regional Headquarters of Cargo Solidarity, explained, "The substitute driver fee ranges from a minimum of KRW 140,000 to a maximum of KRW 450,000 per day. Because convenience store deliveries typically require two rounds per day (morning and afternoon), substitute fees can total up to KRW 900,000, all of which is borne by the worker," he noted. He further appealed, "If we take sick leave, there is no income, but we still have to pay substitute fees. This reality forces workers to keep driving even if it destroys their health. We need a system to make substitute driver fees more reasonable and to require BGF Retail to sincerely participate in negotiations. We call on lawmakers to make this happen."

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BGF Retail maintains that BGF Logistics is responsible for logistics work and that each logistics center sets transportation fees and contract terms through entrusted contracts with individually operated transportation companies. Therefore, BGF Retail claims it does not have direct employer status over cargo workers. In this context of starkly differing positions, the blockade of some logistics centers and production facilities is causing damages to franchise owners operating CU stores.

On online communities run by franchise owners, there is a flood of posts and photos lamenting empty shelves due to the lack of supply of ready-to-eat meals such as lunchboxes, kimbap, and sandwiches. The blockage of production factories is also disrupting the supply of CU's private brand (PB) products. One CU franchise owner said, "Fresh food accounts for a very large proportion of our sales, but with goods not arriving as they should, daily sales have plunged by as much as 50% compared to last week. The situation is already dire due to falling sales, and if the issue is not resolved this month, I plan to request permission from the Fair Trade Commission to close my business without penalty."

Franchise owners are divided-some blame lawmakers and the government for passing the Yellow Envelope Act, while others criticize the company's response. Park, the regional head, said, "CU management knew that if we stopped driving, there would be supply disruptions to convenience stores, yet they did nothing for 90 days and are now shifting the blame onto cargo workers. If this situation continues, we will have no choice but to escalate our actions further."

The retail industry, including related sectors, is paying close attention to the unfolding situation. An industry insider commented, "While each company has slight differences in how they operate logistics centers and hire cargo workers, similar conflicts can arise at any time with the implementation of the revised law. Since it also directly affects small business owners who are franchisees, they cannot help but be deeply concerned."

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