The Korean business community has been strongly opposing the Yellow Envelope Bill (an amendment to Article 2-3 of the Trade Union Act), saying it will disrupt Korea’s labor relations and industrial ecosystems. But the majority Democratic Party passed the bill in a plenary session of the National Assembly without the ruling party’s participation. In response, the business community requested that President Yoon Suk-yeol veto the bill to prevent it from coming into effect.
On Nov. 9, the Korea Chamber of Commerce and Industry (KCCI), the Federation of Korean Industries (FKI), and the Korea Enterprises Federation (KEF) issued statements criticizing the passage of the Yellow Envelope Bill by the National Assembly. The Yellow Envelope Bill aims to guarantee the bargaining rights of indirectly employed workers and prohibit damages and seizures for the purpose of suppressing labor struggles.
“The Yellow Envelope Bill will shake the foundation and order of Korean industrial sites and seriously undermine the Korean legal system that has been in place for a long time, negatively affecting Korean industrial ecosystems and job creation in Korea,” the KCCI said in the statement.
“Korea’s labor competitiveness, the most vulnerable point of Corporate Korea, will further decrease due to the passage of the Yellow Envelope Bill, which will in turn diminish the nation’s growth potential,” the KCCI added. “The Yellow Envelope Act should be suspended now, and the Korean business community is urgently calling for the abortion of the bill.”
“The Yellow Envelope Bill expands the concept of an employer and allows subcontractor unions to stage strikes against prime contractors,” the FKI also said in the statement. “The bill is likely to disrupt Korea’s industrial ecosystems comprised of numerous subcontracting relationships. What’s more, labor strikes will occur frequently as the scope of labor disputes expands.”
“The individualization of liabilities for damages makes it difficult for employers to claim damages even if unions engage in illegal strikes,” an FKI official said. “An infringement of a company’s property rights is bound to take place. Damage caused by this will eventually be passed on to shareholders, workers, and partners, among others. Under high inflation, high interest rates, and high exchange rates which are making it very difficult for Korean companies to manage their businesses, we request a comprehensive review of the Yellow Envelope Bill which could encourage laborers to start conflicts and strikes and significantly hold back Korean companies boosting their competitiveness.”
“The opposition party that forcefully passed the bill will hardly be able to avoid bearing historical responsibility,” a KEF official said. “The opposition party passed an amendment to the Trade Union Act, which expands the scope of employers and the concept of labor disputes and limits employers’ right to claim damages for illegal labor disputes, despite the ruling party’s strong opposition, including its abandonment of voting.”
“The Korean business community has repeatedly asserted that the passage of the bill will shake the foundations of the Korean legal system that have been built up over many decades and bring down the country’s businesses and economy,” the KEF official said. “Korea’s automobile, shipbuilding, and construction industries are based on numerous collaborative systems with partners. The proposed amendment will recklessly expand the scope of users, disrupting Korea’s industrial ecosystems between subcontractors and prime contractors, causing workers to lose their jobs.”
Most in the Korean business community say that the Yellow Envelope Bill will unnerve them. Concerns were also raised that the bill will make Korean businesspeople potential criminals. “First of all, despite the existence of a number of criminal penalties under the Trade Union Act, the Yellow Envelope Bill is expanding its scope with an abstract concept,” the KEF official added. “It will make Korean businesspeople potential criminals and have a big negative impact on their business activities and dampen their business spirit.”
“By expanding the concept of labor disputes and limiting liabilities for damages, industrial sites will be disrupted by labor disputes and illegal activities throughout the year. This will cause a major blow to not only domestic companies’ investment but direct investment by foreign companies.”
“Hyundai Motor has 4,000 to 5,000 partners. Considering that hundreds of partners are simultaneously demanding collective bargaining with the president of Hyundai Motor, the automaker’s business activities will be paralyzed,” said a Korean business community insider. “Criteria about responding to collective bargaining are very vague and if the president of a company blindly refuses to do that, he or she can be criminally punished,” the official said. “If partners go on strike against Hyundai Motor to demand that Hyundai Motor accept collective bargaining, it will put a halt to its car production line. In short, it’s nonsense.”
“The only way to stop the industrial snafu and economic catastrophe that this bill will cause is a presidential veto, and we urge the President to do that so that Korean companies can continue to do business as usual in this country,” the economic organizations said in unison.