The enforcement decree amendment and interpretive guidelines for the 'Yellow Envelope Act (Revised Trade Union Act),' set to take effect on the 10th of next month, have been finalized. The enforcement decree amendment passed at the Cabinet meeting on the 24th maintains the framework of unified bargaining channels when prime contractors and subcontractor unions negotiate, but allows for individual bargaining when interests differ between unions. According to the guidelines, unlike existing Supreme Court precedents, restructuring and layoffs resulting from companies' overseas investments, mergers, and sales are now subject to strikes.
The government prepared an initial amendment in December of last year but faced criticism for being hasty. There are concerns that the new amendment, released just two weeks before the law takes effect, amounts to nothing more than patchwork fixes that could cause chaos at industrial sites.
Among major countries, it is difficult to find cases where subcontractor unions are granted bargaining rights with prime contractors. The government's position is that the Labor Relations Commission will determine whether something qualifies as a bargaining matter, thereby preventing indiscriminate bargaining demands from subcontractor unions. However, the government has recognized prime contractors as bargaining counterparts even if they only pay attention to industrial safety. The scope of employer status has become so excessively broad that it opens the door for hundreds of subcontractor unions to demand "bring out the real boss."
There are also significant concerns that legal disputes will be endless and conflicts between prime contractor and subcontractor unions with different interests will become frequent. The government claims that business management decisions are not subject to labor disputes as under current law, but this shows ignorance of reality. Mergers and sales inevitably involve restructuring or reassignment. The petrochemical industry, which urgently needs restructuring, could immediately suffer from strikes.
With the Yellow Envelope Act's implementation approaching, industrial sites are in the calm before the storm. The Korean Confederation of Trade Unions' Metal Workers' Union alone already has 143 subcontractors demanding direct negotiations with prime contractors. Survey results also show that 35% of foreign-invested companies in Korea are considering reducing or withdrawing their investments once the Yellow Envelope Act takes effect.
The government must work to minimize the aftermath through mediation between prime contractors and subcontractors and rational judgment by the Labor Relations Commission. To level the "tilted playing field," measures guaranteeing employers' defensive rights are also needed, such as prohibiting workplace occupation and allowing replacement workers during strikes, as in other advanced countries. If things continue this way, domestic investment and jobs will increasingly flee overseas, potentially leading to mutual destruction for both labor and management.