Home > Business > Economy

8 major business groups urge parliament to reconsider 'Yellow Envelope Act'

Published: 29 Jul. 2025, 17:00 Updated: 29 Jul. 2025, 17:02

Democratic Party Rep. Kim Ju-young, chair of the National Assembly’s Environment and Labor Committee subcommittee, center, and lawmakers speak during a subcommittee meeting on the "Yellow Envelope Act" at the National Assembly in western Seoul on July 28. [JOONGANG ILBO]

Eight of Korea’s largest business associations on Tuesday urged the National Assembly to reconsider two major legislative proposals — the “Yellow Envelope Act” and amendments to the Commercial Act — warning that the bills could destabilize the country’s export-driven economy and hinder corporate restructuring efforts at a time of heightened global uncertainty.

The groups — including the Federation of Korean Industries, the Korea Chamber of Commerce and Industry, the Korea Enterprises Federation (KEF), and the Korea International Trade Association — issued a joint statement expressing “grave concern” over the rapid legislative push behind legislative moves.

The Yellow Envelope Act, which would amend the Trade Union Act, would limit companies’ ability to claim damages from unions or workers for losses stemming from strikes. The Commercial Act revisions intend to strengthen minority shareholder rights with such measures as cumulative voting for board members, multiderivative lawsuits and more stringent rules for board accountability.

“We cannot contain our deep concern and sense of despair over the accelerated push for amendments to the Commercial Act and Trade Union Act, even in the midst of a severe economic crisis,” the statement read.

The European Chamber of Commerce in Korea (ECCK), which on Monday issued its own statement opposing the Yellow Envelope Act — a rare move by the organization and the first time it has publicly intervened on a domestic legislative issue.

The ECCK criticized the proposed expansion of the legal definition of “employer” to include individuals who substantially influence working conditions, even if they are not formal parties to an employment contract. This, the chamber warned, could “treat business operators as potential criminals” and raise legal exposure for foreign-invested companies operating in Korea.

Such concerns follow the passing of a second Commercial Act amendment on Monday mandating a cumulative voting system that allows shareholders to cast all votes for a single board candidate, just six days after the first revision was promulgated, while the Yellow Envelope Act was also passed out of the subcommittee and full session of the Environment and Labor Committee that same day.

Export containers are stacked at Pyeongtaek Port in Pyeongtaek, Gyeonggi on July 28. [NEWS1]

The eight business associations also linked their opposition to the ongoing Korea–U.S. tariff negotiations, cautioning that heightened regulatory risks could compound the pressure facing Korean exporters.

“If the Korea-U.S. tariff negotiations fail, it could effectively block our access to our largest export market,” the joint statement by the eight associations said. “It is frustrating to see us tying our own hands at a time when the outcome remains uncertain.”

The group urged the National Assembly to “acknowledge the urgent challenges that Korean companies are facing” and “review the legislation carefully through the lens of the national interest, not unnecessary regulation.”

Tuesday’s announcement marked the second coordinated response from the eight business associations in less than a week. A similar appeal issued Thursday argued that the commercial law amendments could restrict companies’ ability to restructure core industries and pursue new growth initiatives.

As the bills move closer to a floor vote, the growing opposition from both Korean and foreign business groups signals rising anxiety over the future direction of the country's economic and regulatory environment.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM SU-MIN [[email protected]]