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Business group chiefs raise 'Yellow Envelope Bill' alarm with DP lawmakers

Published: 14 Jul. 2025, 18:49 Updated: 14 Jul. 2025, 19:58

Sohn Kyung-shik, chairman of the Korea Enterprises Federation, speaks on the business community’s position regarding the proposed revision to the Trade Union Act during a labor policy meeting with the Democratic Party members of the National Assembly's Environment and Labor Committee and six major business groups at the federation’s headquarters in western Seoul on July 14. [KOREA ENTERPRISES FEDERATION]

Korea’s business leaders are raising alarms over the "Yellow Envelope Bill," warning that it could destabilize industrial operations and accelerate the exodus of companies overseas — just as the ruling Democratic Party (DP) doubles down on efforts to push the controversial labor reform through the National Assembly this month.

“This is not just a legal revision — it’s a fundamental transformation that could cause serious disruption in labor-management relations,” said Sohn Kyung-shik, chairman of the Korea Enterprises Federation (KEF), at a policy meeting with DP lawmakers on the National Assembly's Environment and Labor Committee at the KEF headquarters in western Seoul on Monday. “Extensive dialogue and consensus between labor and management are essential.”

Attendees from the DP included committee chair An Ho-young and Deputy National Assembly Deputy Speaker Kim Hak-young, along with four other DP lawmakers.

Representatives from six major business groups — the KEF, Korea Chamber of Commerce and Industry, Federation of Korean Industries, Korea International Trade Association, Korea Federation of Small and Medium Business and Federation of Middle Market Enterprises of Korea — also participated.

The Yellow Envelope Bill, a key campaign pledge of President Lee Jae Myung, seeks to revise Korea’s Trade Union Act by expanding the definition of “employer,” allowing subcontracted workers to negotiate directly with parent companies. It also aims to limit a company’s ability to seek damages from labor unions over losses caused by strikes or industrial action.

Last year, the DP-dominated legislature passed the bill, only for then-President Yoon Suk Yeol to veto it. The party now appears set to revive the legislation in the July session of the Assembly.

Business leaders argue that the bill could unleash a wave of industrial disputes and cripple the already fragile subcontracting ecosystem. Sohn criticized the proposed language around employer responsibility as “vague and abstract,” noting that under the new rules, companies with “substantial and concrete influence over working conditions” could be forced to negotiate with potentially hundreds of unions.

Democratic Party lawmakers on the National Assembly's Environment and Labor Committee listen to Korea Enterprises Federation Chairman Sohn Kyung-shik present the business community’s stance on the proposed revision to the Trade Union Act during a labor policy meeting with six major business groups at the federation’s headquarters in western Seoul on July 14. [YONHAP]

“If dozens or hundreds of subcontractor unions demand negotiations, the parent company cannot respond to each, which would throw industrial operations into chaos," he said.

He also warned of broader economic consequences.

“If subcontractor unions frequently go on strike against parent companies, those companies may sever ties with domestic partners or relocate their operations abroad," he said. "The damage will eventually fall on small businesses and future generations.”

On the proposed restrictions on damage claims, Sohn argued that companies would have little legal recourse in the face of illegal actions.

“During strikes, union members occupy workplaces, cover CCTV or wear masks to evade identification," he said. "In such a situation, proving individual wrongdoing is nearly impossible. Most court rulings that recognized union liability involved illegal and extreme actions like workplace occupation. If companies are even denied the right to seek damages, illegal activity could spread across workplaces.”

Labor groups, however, continue to press for swift passage of the bill.

The Korean Confederation of Trade Unions (KCTU), which has long backed the bill, plans to launch a general strike on Wednesday to demand its swift enactment. Labor minister nominee Kim Young-hoon — a former KCTU chairman — has also voiced his support.

“Amending Articles 2 and 3 of the Trade Union Act is urgently needed to narrow labor market disparities,” Kim said.

Despite the sharp divide, some in the business community expressed cautious optimism that Monday’s meeting could pave the way for compromise. In his opening remarks, DP Rep. An said, “It is the responsibility of our committee to present a prompt and reasonable solution acceptable to both labor and management. We will continue communication and collaboration to broaden public consensus and create win-win solutions.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY NA SANG-HYEON [[email protected]]