This article explains the passage of South Korea's labor union law amendment through the National Assembly and the challenges toward its implementation.
Passage of Amendment and Its Significance
The Korean government announced on August 24 that the Partial Amendment to the Trade Union and Labor Relations Adjustment Act (Labor Union Law Amendment) was passed at the National Assembly plenary session. The Ministry of Employment and Labor cited the significance of this amendment as "responding to the changed labor environment and industrial structure, and resolving institutional gaps where there is a mismatch between authority and responsibility" and "establishing a legal foundation to solve problems such as guaranteeing substantial negotiation rights in multi-layered labor-management structures like prime contractors and subcontractors, and the shrinking of labor rights exercise due to excessive damage compensation claims."
This amendment, also called the "Yellow Envelope Act," was previously proposed by the then-opposition Democratic Party during the Yoon Suk-yeol administration but was scrapped due to former President Yoon's veto.
Specific Amendment Content
Expansion of Employer Status (Article 2, Paragraph 2): Prime contractors and others in positions to substantially and specifically control and determine specific working conditions become employers under the Trade Union Act within that scope and bear negotiation obligations.
Removal of Restrictions on Union Membership for Non-workers (Article 2, Paragraph 4): The autonomy and independence of unions are not denied solely because some non-workers are included in the labor union.
Expansion of Labor Dispute Scope (Article 2, Paragraph 5): Includes as subjects of labor disputes: ①business management decisions that are closely related to working conditions and involve changes in working conditions, such as restructuring layoffs, and ②cases where employers violate collective agreements regarding some working conditions (wages, working hours, occupational health and safety, disaster prevention, etc.).
Limitation of Damage Compensation Claims (Article 3): Establishes a mechanism to rationally limit the scope of responsibility according to the degree of wrongdoing, rather than unconditionally recognizing illegal acts, balancing legitimate legal responsibility and rights protection.
Exemption from Damage Compensation Liability (Article 3-2): Establishes new provisions allowing employers to exempt damage compensation liability arising from dispute actions, aiming for amicable resolution of labor-management disputes.
Government Preparation for Implementation
The Ministry of Employment and Labor announced plans to establish a window for constantly collecting operational opinions from both management and workers toward implementation in 6 months, providing continuous and systematic feedback.
Concerns from Industry and Foreign Companies
Industry Opposition: The industry is concerned that the Labor Union Law amendment is excessively biased toward protecting workers' rights and may adversely affect sound labor-management relations and business environment.
Foreign Companies' Investment Intention Survey: According to a survey conducted by the Korea Foreign Companies Association (KOFA) targeting 100 foreign companies, 36% of responding companies answered they are "considering reducing investment in Korea or withdrawing Korean operations."
Economic Community Warnings: The Maeil Business Newspaper introduced concerns from the economic community stating that "if the ripple effects from the 'Yellow Envelope Act' grow larger, there is a risk of accelerating the phenomenon where not only foreign companies but also Korean companies will try to escape overseas" and "the government should urgently pursue complementary legislation that also considers the economic community's position."
The article demonstrates that the amended law aimed at strengthening workers' rights presents serious challenges regarding the importance of adjustment work to balance the interests of both labor and management before implementation, particularly concerning its impact on the investment environment for foreign companies.