Labor Unions Demand Direct Talks With Parent Firms as Yellow Envelope Law Takes Effect

Labor unions have launched a massive show of force immediately after the implementation of the "Yellow Envelope Law" (amendments to Articles 2 and 3 of the Trade Union Act), which threatens to shake the foundations of labor-management relations.

The Korean Confederation of Trade Unions (KCTU) held a large-scale rally in downtown Seoul on the 10th, declaring a campaign to "win collective bargaining rights with parent companies." Unions under the KCTU umbrella, including the Korean Public Service and Transport Workers' Union, delivery workers' union, and non-regular workers' unions, held separate press conferences shouting "Bring out the real boss."

Bargaining demands from subcontractor unions, which had been a major concern even before the law's implementation, have now begun in earnest. On the day the law took effect, the construction workers' union sent bargaining request letters to 97 parent construction companies. Subcontractor unions at Hyundai Motor, HD Hyundai Heavy Industries, POSCO, and Coupang also submitted collective bargaining demands. Approximately 750 public sector subcontractor workplaces are expected to follow suit soon.

The Federation of Korean Trade Unions (FKTU) announced at its 80th anniversary ceremony that it would leverage the Yellow Envelope Law to expand membership from 1.2 million to 2 million, pledging to support the establishment of subcontractor unions.

The labor movement appears intent on using the Yellow Envelope Law as a springboard to expand subcontractors' bargaining rights and as leverage for "spring labor offensives." However, the amendments significantly expand the scope of employers and labor disputes while leaving boundaries ambiguous, raising concerns about chaos in the field.

Companies now face a situation where even minor management decisions could become targets of lawsuits and strikes, while it remains unclear who their bargaining counterparts even are. Given the volatility in oil prices and financial markets amid Middle East conflicts, this represents a double blow for the business community. Cries of distress are already emerging across industries. Not only is the retail sector seeing M&A deals blocked by union opposition, but the petrochemical and steel industries urgently needing restructuring are also on high alert.

On the first day of the Yellow Envelope Law's implementation, President Lee Jae-myung delivered a video message at the FKTU anniversary ceremony, expressing hope that it would "mark a starting point for resolving common problems through dialogue and compromise instead of confrontation and conflict." However, it is doubtful whether smooth dialogue and compromise are possible when the playing field is tilted to one side.

Industrial uncertainty cannot be resolved while labor-management relations remain imbalanced. The government must swiftly prepare supplementary legislation and enforcement decrees to address toxic provisions and interpretive ambiguities in the law's application.