Yellow Envelope Law Risks Mutual Destruction Without Labor Restraint

The sudden implementation of the "Yellow Envelope Law" (amendments to Articles 2 and 3 of the Trade Union Act) on the 10th has brought labor-management relations to a critical turning point. Under the law, which expands the definition of "employer" and the scope of labor disputes, subcontractor unions can now directly demand negotiations with parent companies, and unions can strike over management decisions such as mergers and acquisitions. Meanwhile, companies' rights to claim damages for losses caused by strikes have been restricted.

Contrary to the government's explanation that this law "slightly levels an excessively tilted playing field between labor and management," there are significant concerns that the Yellow Envelope Law will act as "shackles" that constrain business activities by encouraging indiscriminate disputes and labor-management conflicts. Employment and Labor Minister Kim Young-hoon said, "Rather than excessively worrying about conflicts that have not occurred, problems should be resolved through dialogue and cooperation." However, the concerns of companies now facing unprecedented union risks—when even the scope of "employers" required to negotiate with unions remains ambiguous—cannot be dismissed as mere anxiety.

Industrial sites are already in significant turmoil. Even before the law took effect, Hanwha Ocean was designated by the Korean Metal Workers' Union as "parent company negotiation target No. 1" and is under pressure to engage in collective bargaining with subcontractor unions. SK Telecom, which had been pursuing the sale of its subsidiary SK Stoa, has encountered opposition strikes from unions. Whether the urgent restructuring of petrochemical and steel industries needed to restore competitiveness can overcome the union "wall" remains uncertain. The Korea Employers Federation on the 8th urged labor to refrain from excessive bargaining demands and strikes, but major unions have closed their ears to management's desperate appeals. The Korean Confederation of Trade Unions has announced plans to demand parent company negotiations for approximately 137,400 subcontractor union members, while the Federation of Korean Trade Unions plans to expand support for subcontractor union struggles to grow its organization following the law's implementation.

Economic uncertainty has already heightened due to the compound crisis originating from the Middle East. If a "tsunami" of indiscriminate bargaining demands and chain strikes by unions hits on top of this, not only will business activity contract, but corporate survival itself becomes uncertain. The possibility of industrial hollowing-out from companies relocating overseas and foreign-invested firms withdrawing cannot be ruled out. To prevent the worst-case scenario of job losses and mutual destruction of labor and management, unions must refrain from illegal strikes and excessive demands, while the government must prevent industrial chaos through impartial judgment that does not favor labor and implement supplementary measures.