Concerns of 'Yellow Envelope Bill' undermining market momentum growing

 

Suh Kyoung-ho
 
The author is an editorial writer at the JoongAng Ilbo.
 
 
In a recent roundtable hosted by the Korea Employers Federation, one participant remarked, “The real power of the 'Yellow Envelope Bill' lies in its name.” The comment alludes to the popular nickname for the proposed amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act — better known as the “Yellow Envelope Bill.”
 
The bill’s name can be traced back to a 2014 fund-raising campaign. Supporters sent donations in yellow envelopes to laid-off SsangYong Motor workers, who were struggling under court-ordered compensation and wage garnishments after a protracted legal battle. The envelopes symbolized solidarity and a hope that the workers could return to their regular lives. The bill's intent, in that sense, evokes compassion.
 

Members of the Korean Confederation of Trade Unions, one of South Korea's largest umbrella labor groups, hold a press conference in central Seoul on July 2. The first demand listed in the slogan in the background is the passage of what is commonly known as the "Yellow Envelope Bill." [YONHAP]

 
Still, good intentions do not always lead to sound policy. The concerns of Korean businesses regarding the "Yellow Envelope Bill" are well known. These concerns fall into three major categories.
 
First, the bill expands the definition of an “employer” to include those in a position to substantially and concretely influence working conditions. Critics argue that this definition is vague and overly broad. In practice, it could require large corporations to negotiate with hundreds, even thousands, of subcontractor unions. This, some warn, may incentivize firms to avoid subcontracting altogether, which could undermine existing industrial structures.
 
Second, the bill broadens the scope of permissible industrial action. Under current law, strikes are limited to disputes directly tied to the determination of working conditions. By removing the word “determination,” the proposed changes would allow strikes over a much wider range of issues — disciplinary action, layoffs and even corporate investment decisions or restructuring. Businesses warn that this could erode management rights and prolong labor negotiations.
 
Third, the bill seeks to individualize the burden of liability for illegal strikes, requiring damage compensation claims to reflect each participant’s degree of fault. While this seems fair in principle, it may prove impractical in reality. During strikes, masked workers may obscure security cameras or occupy facilities, making it difficult for employers to prove who did what. If companies cannot clearly attribute fault, courts may reject their claims altogether.
 
These concerns are not merely corporate posturing. At the roundtable, what stood out most were the voices of labor relations officers at large firms pleading, “Just give us time.” One executive explained, “We are already struggling to navigate global supply chains and trade negotiations. The last thing we need is added legal uncertainty from changes to labor law.” Another urged, “Let’s not rush. We need time for genuine dialogue.”
 

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Unlike tariff negotiations, which require compromise with foreign counterparts, the "Yellow Envelope Bill" is entirely within Korea’s control.
 
President Lee Jae Myung pledged the bill during his campaign, and Minister of Employment and Labor nominee Kim Young-hoon has reaffirmed plans to push it forward. But the government would do well to reflect on the caution of the previous Democratic administration. The bill was part of Moon Jae-in’s policy platform and also a Democratic Party pledge during past elections. Yet despite holding a legislative majority after the 2020 general election, the Moon administration did little to advance the bill. It came up only once in the National Assembly’s environment and labor committee.
 
In December 2020, then-Vice Minister of Employment and Labor Park Hwa-jin told lawmakers that the bill contained too many exceptions that “shake the foundation of the law,” adding that any change would require careful deliberation. Critics suggest the Democratic Party’s renewed push under the former Yoon administration is more about political posturing than principle.
 

Justice Party leader Lee Jeong-mi celebrates the passage of the "Yellow Envelope Bill" in front of the National Assembly in Yeouido, western Seoul, on Feb. 21, 2023. The bill was passed by the National Assembly in Nov. 2023, but then-President Yoon Suk Yeol exercised his veto. [YONHAP]

 
While the current government has proposed alternatives, including clearer definitions of employer responsibility, many in the business community remain unconvinced that these revisions will effectively prevent unlawful strikes. Even former President Moon, who once openly criticized the business lobby for contributing to job polarization, took a cautious stance when it came to labor reform, aware of its potential impact on the economy.
 
As optimism grows around the possibility of Korea’s benchmark Kospi index reaching 5,000, the ruling party has launched a task force to support market expansion. But it should not ignore the risk that the "Yellow Envelope Bill" could dampen investor sentiment and destabilize labor relations.
 
Rather than pushing ahead in haste, a tripartite consultation among labor, management and government is essential. The last thing Korea needs is for a bill rooted in solidarity to become what some are already calling the “Kospi 3000 Bill” — a well-intentioned reform that unintentionally hinders economic progress.


Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.