🚨 Yellow Envelope Law

Today Korean Social News for Beginners | 2025.07.30

0️⃣ Expanding Labor Disputes and Limiting Damage Compensation - Key Changes in Labor Relations

📌 Minister Kim Young-hoon: "Yellow Envelope Law promotes labor-management dialogue... will settle in the workplace"

💬 Minister Kim Young-hoon of the Ministry of Employment and Labor said about the Trade Union Act Articles 2 and 3 amendment, known as the Yellow Envelope Law, "This is a law that promotes labor-management dialogue and strengthens the responsibility of employers with real authority." The amendment expands the scope of labor disputes and limits employers' damage compensation claims for legitimate strike actions. Major countries like the United States and France operate similar systems, but they also protect management's defense rights through prohibiting workplace occupation and allowing replacement workers. The government announced that it expects the system to settle in the workplace without problems.

💡 Summary

• The Yellow Envelope Law is an amendment to Articles 2 and 3 of the Trade Union Act that expands the scope of labor disputes.
• The key point is limiting employers' damage compensation claims for legitimate strike actions.
• It expands the concept of employer so subcontractor workers can negotiate directly with main contractors.

1️⃣ Definition

Yellow Envelope Law means a bill that amends Articles 2 and 3 of the Trade Union Act to expand the scope of labor disputes and limit employers' damage compensation claims for legitimate strike actions. The name "Yellow Envelope" comes from the "Yellow Envelope Campaign" where people collected and delivered damage compensation money to striking workers.

The main content of this bill is to expand the concept of employer so subcontractor workers can negotiate directly with main contractors, and to exempt compensation liability for damages caused by legitimate strike actions.

💡 Why is it important?

• It expands negotiation rights for improving subcontractor workers' working conditions.
• It reduces excessive damage compensation burdens for legitimate labor disputes.
• It provides an institutional foundation to promote real dialogue and negotiation between labor and management.
• It clarifies the responsibility of actual employers in complex employment structures.

2️⃣ Main Content and Background of the Yellow Envelope Law

📕 Key Amendment Points of the Bill

• The scope of labor disputes is greatly expanded. Main changes include:

  • The subject of disputes, previously limited to economic conditions like wages and working hours, is expanded.
  • Wide-ranging matters like job security, personnel measures, and union activities are included as dispute subjects.
  • Management decisions like restructuring or workplace relocation can also become negotiation subjects.
  • This has the effect of substantially strengthening labor unions' negotiation rights.

• The concept of employer is expanded to address indirect employment issues. Main content includes:

  • Subcontractor workers can now negotiate with main contractors who have real control.
  • Actual employers are recognized in various employment forms like dispatched work, service contracts, and subcontracting.
  • When main contractors exercise real influence over working conditions, negotiation obligations arise.
  • Negotiation with responsible parties becomes possible even in complex corporate structures.

📕 Meaning and Effects of Damage Compensation Limits

• Damage compensation for legitimate strike actions is basically exempted. Main changes include:

  • Previously, there was unlimited compensation liability for production stops and sales decreases due to strikes.
  • The amendment specifies that damages from legitimate strike actions do not require compensation.
  • However, damages from intentional or gross negligence still have compensation liability.
  • This is expected to greatly reduce workers' burden of participating in strike actions.

• The goal is to restore balance in negotiation power between labor and management. Main effects include:

  • The practice of giving up strikes due to astronomical damage compensation risks will improve.
  • An environment where labor unions can more actively engage in negotiations is created.
  • Employers also have greater incentive to come to the negotiation table for real dialogue.
  • In the long term, cooperative relationships based on trust between labor and management become possible.

💡 Main Issues of the Yellow Envelope Law

1. Scope of disputes: Controversy over interpretation of what constitutes legitimate strike actions
2. Damage standards: Criteria for distinguishing between exempt damages and compensable damages
3. Management rights infringement: Concerns about management difficulties due to excessive negotiation demands
4. Effectiveness issues: Whether workplace practices can change just through legal amendments
5. Preventing side effects: Measures to prevent illegal strike actions or violent protests

3️⃣ International Cases and Workplace Application Prospects

✅ Similar System Operations in Major Countries

• The United States and major European countries also operate similar systems. Main examples include:

  • The United States basically exempts damage compensation for legitimate strikes.
  • France also has no compensation obligation for damages from lawful strikes.
  • Germany limits damage compensation for strikes according to proportionality principles.
  • All these countries recognize strike rights as basic rights while setting certain limits.

• International approaches balance worker rights and management protection. Main characteristics include:

  • While guaranteeing strike rights, workplace occupation or violent acts are strictly prohibited.
  • Essential services or public utilities are required to maintain minimum service levels.
  • Replacement workers are allowed to minimize management damage.
  • Peaceful resolution procedures like mediation or arbitration are prioritized.

✅ Domestic Workplace Application and Future Prospects

• The government is working for stable settlement of the system. Main directions include:

  • Plans to minimize confusion through sufficient explanation and education for both labor and management.
  • Detailed guidelines will be provided for each case in the early implementation period.
  • The mediation function of labor relations commissions will be strengthened to promote peaceful dispute resolution.
  • Strict law enforcement will be maintained for illegal activities.

• Various reactions and concerns are appearing in the workplace. Main current situations include:

  • Labor groups evaluate this as solving a long-standing goal and announce active utilization.
  • Management groups worry about management rights infringement and increased labor-management conflicts, requesting careful approaches.
  • Legal circles point out the need for specific application standards and case law accumulation.
  • Civil society believes we need to find a balance between guaranteeing basic labor rights and protecting public interests.

4️⃣ Related Term Explanations

🔎 Labor Disputes

• Labor disputes refer to conflicts of interest between labor and management over working conditions.
  • Labor disputes mean conflicts between workers and employers over working conditions like wages, working hours, vacation, welfare benefits, or labor unions' collective action rights. The target is collective disputes between labor unions and employers, not individual workers.
  • Types of labor disputes include: First, rights disputes over interpretation of existing rights or obligations. Second, interest disputes over conflicts in the process of setting new working conditions. Third, union activity disputes over conflicts regarding freedom of labor union activities.
  • Labor disputes should be resolved through peaceful methods like collective bargaining, mediation, and arbitration, with strikes or lockouts used as last resorts. The Yellow Envelope Law aims to strengthen workers' negotiation rights by expanding the scope of such disputes.

🔎 Indirect Employment

• Indirect employment is a method of utilizing labor through third parties without direct employment contracts.
  • Indirect employment refers to employment forms where workers sign employment contracts with companies other than the actual workplace employer. Representative forms include dispatched work, service contracts, and subcontracting, which are increasingly common in modern economies.
  • Problems with indirect employment include: First, main contractors substantially control working conditions but don't take legal responsibility. Second, workers cannot negotiate with actual employers, making it difficult to improve working conditions. Third, employment instability and low wage problems easily occur.
  • The Yellow Envelope Law expands the concept of employer to solve these problems, allowing subcontractor workers to negotiate directly with main contractors. This aims to strengthen protection of indirect employment workers' rights.

🔎 Collective Bargaining

• Collective bargaining is the process where labor unions and employers discuss and decide working conditions.
  • Collective bargaining means the process where labor unions represent union members to discuss and agree on working conditions and labor relations management matters like wages, working hours, and welfare with employers. This is a core basic labor right along with the right to organize and collective action among the three labor rights.
  • Characteristics of collective bargaining include: First, labor unions negotiate collectively, not individual workers. Second, employers have an obligation not to refuse negotiations without justifiable reasons. Third, negotiation results are concluded as collective agreements with legal binding force.
  • For successful collective bargaining, trust and mutual respect between labor and management are necessary, and rational, constructive discussions are important. The Yellow Envelope Law provides an institutional foundation for such collective bargaining to become more active and achieve substantial effects.

5️⃣ Frequently Asked Questions (FAQ)

Q: Will there be more strikes when the Yellow Envelope Law is implemented?

A: The effect of activating substantial negotiations is expected to be greater than increasing strikes.

• The core of the Yellow Envelope Law is not to increase strikes but to promote substantial dialogue between labor and management. Previously, labor unions often couldn't negotiate properly at the negotiation table due to astronomical damage compensation risks. When this burden is reduced through legal amendments, peaceful negotiations are more likely to increase. Also, as subcontractor workers can negotiate directly with main contractors, unnecessary conflicts may decrease. Looking at international cases, countries with such systems haven't seen strikes increase indiscriminately.
• However, in the early implementation period, negotiation demands that were previously suppressed may temporarily increase, so the government and labor-management need to respond wisely together.

Q: Are small and medium enterprises also affected by the Yellow Envelope Law?

A: Small and medium enterprises are also affected, but the burden is expected to be relatively less compared to large companies.

• The Yellow Envelope Law applies to all workplaces regardless of company size. However, small and medium enterprises have fewer complex subcontracting structures compared to large companies, and direct communication between labor and management is often more active, so relatively big changes are not expected. Rather, workers at small and medium enterprises working as subcontractors for large companies may have more opportunities to improve working conditions by being able to negotiate with main contractors. However, small and medium enterprise managers need to accurately understand and prepare for the scope of damage compensation exemption and standards for legitimate strike actions.
• The government also announced plans to support small and medium enterprises through consultation, guideline provision, and educational programs to reduce their burden. Above all, building trust relationships and communication between labor and management in advance will be the most important preparatory measure.