🚨 Yellow Envelope Law

Today Korean Social News for Beginners | 2025.08.03

0️⃣ Expanding Employer Definition and Limiting Damage Claims, A New Turning Point for Worker Rights Protection

📌 An Era Where Real Bosses Take Responsibility Too... Yellow Envelope Law Close to Passing Parliament

💬 The 'Yellow Envelope Law' that has been stuck for over 10 years has passed the National Assembly Environment and Labor Committee and is now waiting for full assembly processing. The main content includes expanding the definition of employers and limiting damage claims for labor union activities. This creates institutional measures to clarify primary contractor responsibility and prevent excessive damage claims against striking workers. Unlike the previous government that rejected the bill twice, the current government shows strong commitment to quick legislation and industrial accident response. When the law takes effect, large company subcontract workers will also be able to negotiate directly with primary contractors, marking a new turning point in worker rights protection.

💡 Summary

• The Yellow Envelope Law is an amendment to Labor Union Act Articles 2 and 3 that expands the employer concept.
• It makes primary contractors take responsibility as actual employers so subcontract workers can negotiate directly.
• The key point is limiting companies' unlimited damage claims for union activities.

1️⃣ Definition

The Yellow Envelope Law refers to a bill that amends Labor Union Act Articles 2 and 3 to expand the employer concept and limit damage claims for union activities. The name 'Yellow Envelope' comes from a campaign in 2009 during the Ssangyong Motors layoff crisis when citizens voluntarily collected donations in yellow envelopes to show solidarity with striking workers.

This bill's main content is to recognize primary contractors with real authority as employers in complex employment structures and prevent damage claims for legitimate union activities.

💡 Why is this important?

• Subcontract workers can negotiate directly with primary contractors who have real authority.
• It protects workers' right to strike that was weakened by excessive damage claim risks.
• It enables dialogue with responsible parties even in complex corporate structures.
• It supports the actual exercise of the three labor rights guaranteed by the Constitution.

2️⃣ Key Content and Background of the Yellow Envelope Law

📕 Expanding the Employer Concept

• Primary contractors with real control are also recognized as employers. Key changes include:

  • Previously, only parties who directly signed employment contracts with workers were considered employers.
  • The amendment includes primary contractors who substantially affect working conditions as employers.
  • It recognizes actual employers in various employment types like dispatching, contracting, and subcontracting.
  • This creates legal grounds for primary contractors to negotiate directly with subcontract workers.
  • This enables negotiations with responsible parties even in complex corporate structures.

• Subcontract workers' bargaining power is greatly strengthened. Key effects include:

  • Large company in-house subcontract workers can negotiate directly with primary contractors.
  • Real dialogue channels for improving working conditions are established.
  • It prevents primary contractors from avoiding responsibility and clarifies actual employer duties.
  • It creates institutional foundations for protecting indirect employment workers' rights.

📕 Damage Claim Limitation Clauses

• Unlimited damage claims for union activities are restricted. Key content includes:

  • The phrase 'damages from labor union activities cannot be claimed' is added to Labor Union Act Article 3.
  • Damages from legitimate dispute actions like strikes, rallies, and protests are excluded from compensation.
  • It sets comprehensive protection scope including 'other union activities'.
  • The practice of companies considering dispute actions 'illegal' and demanding damage compensation is expected to decrease.

• The Ssangyong Motors crisis became the direct trigger for the bill. Key background includes:

  • Courts ordered 4.7 billion won in damage compensation to Ssangyong Motors workers who opposed 2008 layoffs.
  • The astronomical compensation amount led workers to face economic ruin.
  • This triggered citizens to voluntarily collect money in yellow envelopes as a solidarity campaign.
  • Social consensus formed that excessive damage compensation weakens workers' right to strike.

💡 Key Issues of the Yellow Envelope Law

1. Application Scope: Specific standards for when damage compensation exemption applies
2. Management Rights Interference: Concerns about business difficulties from excessive dispute actions
3. Individual Responsibility: Damage claims against individuals (not unions) are still possible
4. Effectiveness Issues: Can workplace practices change just with law amendments?
5. Finding Balance: Ways to harmonize worker rights and business activities

3️⃣ Bill Passage Process and Future Outlook

✅ National Assembly Passage Process and Political Significance

• It passed the National Assembly Environment and Labor Committee after over 10 years. Key developments include:

  • The bill has failed to pass several times since first being proposed in 2012.
  • The previous government used veto power twice to block the bill.
  • The current government shows active commitment to passing the bill with pro-labor policies.
  • It now awaits full assembly processing after committee passage.

• Reactions from politics and society are mixed. Key positions include:

  • The ruling party and labor groups welcome it as solving a long-cherished goal.
  • Opposition parties and business groups worry about management rights interference and increased economic burden.
  • Civil society raises the need for preventing abuse while guaranteeing basic labor rights.
  • Legal circles emphasize the importance of specific application standards and building case law.

✅ Expected Changes After Implementation

• Significant changes in labor-management relations are expected. Key forecasts include:

  • Large company in-house subcontract workers' bargaining power will be greatly strengthened.
  • Primary contractors will pay more attention to subcontractor working conditions.
  • Labor union activities may become more active with increased bargaining demands.
  • Companies will need to completely review their labor-management relations management methods.

• Tasks remain for workplace implementation. Key challenges include:

  • Detailed guidelines are needed to minimize confusion in early implementation.
  • Strengthening labor committee mediation functions for dispute prevention is important.
  • Clear standards are required to distinguish between illegal acts and legitimate dispute actions.
  • Labor groups demand additional supplementary legislation like limiting damage claims against individuals.
  • Business groups urge safety measures to prevent excessive dispute actions.

4️⃣ Related Terms

🔎 Three Labor Rights

• The three labor rights are basic worker rights guaranteed by the Constitution.
  • The three labor rights refer to the right to organize, collective bargaining rights, and collective action rights guaranteed to workers by Constitution Article 33. These are core rights that enable workers to determine working conditions on equal footing with employers.
  • The right to organize is workers' right to form and join labor unions. Collective bargaining rights allow labor unions to negotiate working conditions with employers. Collective action rights enable dispute actions like strikes when negotiations break down.
  • The Yellow Envelope Law creates institutional foundations for these three labor rights to be actually exercised in complex employment structures. Especially by enabling subcontract workers to negotiate with primary contractors who have real authority, it increases the effectiveness of collective bargaining rights.

🔎 Indirect Employment

• Indirect employment represents complex employment structures.
  • Indirect employment refers to employment where workers sign contracts with companies other than the actual workplace owner. Representative types include dispatched work, service contracts, and subcontracts, which are increasing in modern economies.
  • Problems with indirect employment include primary contractors substantially controlling working conditions while not taking legal responsibility. Workers cannot negotiate with actual employers, making working condition improvements difficult and causing employment instability and low wage problems.
  • The Yellow Envelope Law expands the employer concept to solve these problems, allowing subcontract workers to negotiate directly with primary contractors. This aims to strengthen protection for indirect employment workers' rights.

🔎 Damage Compensation

• Damage compensation is an important issue in legal disputes.
  • Damage compensation means those who cause damage to others compensate that damage with money. In labor-management relations, companies sometimes demand compensation from workers or labor unions for damages from strikes or dispute actions.
  • Previously, workers often faced huge damage compensation responsibility for production stops and sales decreases from strikes. This caused problems where workers gave up dispute actions or faced economic ruin.
  • The Yellow Envelope Law tries to solve these problems by preventing damage claims for legitimate union activities. However, damages from intentional or gross negligence and illegal acts can still be subject to compensation.

5️⃣ Frequently Asked Questions (FAQ)

Q: Will companies face more difficulties when the Yellow Envelope Law is implemented?

A: There may be short-term burdens, but it's expected to help build healthy labor-management relations in the long term.

• With Yellow Envelope Law implementation, companies must negotiate directly with subcontract workers and find it harder to claim strike damages. This may create short-term burdens for companies. However, several positive effects are expected long-term. First, real dialogue can build trust between labor and management and reduce unnecessary conflicts. Second, improved working conditions for subcontract workers can increase work motivation and productivity. Third, transparent and fair labor-management relations can improve companies' social image and sustainability.
• Looking at overseas cases, countries with such systems also achieve healthy economic development. The important thing is for labor and management to work together during law implementation to find mutually beneficial solutions.

Q: Will damage claims be impossible for all strikes?

A: Damage compensation is only limited for legitimate union activities, and compensation responsibility still exists for illegal acts.

• The Yellow Envelope Law doesn't unconditionally protect all strikes. It only limits damage claims for 'legitimate labor union activities'. Requirements for legitimate dispute actions are judged by existing legal principles. First, legitimacy of subject (labor union), second, legitimacy of purpose (working condition improvements, etc.), third, legitimacy of procedure (mediation prerequisite, etc.), fourth, legitimacy of method (peaceful means) must all be met. Using illegal means like violence, workplace occupation, or destroying important facilities still makes one subject to damage compensation.
• Also, damages from intentional or gross negligence are not exempt from compensation responsibility. Therefore, the law amendment won't encourage unlimited dispute actions and is expected to guide peaceful and legal labor-management relations.

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