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Business groups urge lawmakers to reconsider DP's labor bill

Published: 20 Aug. 2025, 00:02

Six major business associations in Korea visited the National Assembly on August 19 and held a resolution meeting urging lawmakers to “keep the definition of employers unchanged and exclude ‘business decisions’ from the scope of labor disputes.” [NEWS1]

The business community’s plea for the “Yellow Envelope Act” — a revision to Articles 2 and 3 of the Labor Union Act that would dramatically expand the scope of employers and the targets of labor disputes — is growing desperate. Six major business associations visited the National Assembly on Tuesday and held a resolution meeting urging lawmakers to “keep the definition of employers unchanged and exclude ‘business decisions’ from the scope of labor disputes.” The American Chamber of Commerce in Korea also appealed to the Democratic Party (DP), relaying the anxiety of foreign investors in Korea. However, the ruling DP remains firm in its plan to railroad the bill through the Assembly’s plenary session on Saturday.

What corporate leaders fear most is the shock the workplace must endure. If Article 2, Paragraph 2 of the act broadens the definition of employers to include parent companies, the number of labor disputes could surge. In a nationwide opinion poll by the Korea Chamber of Commerce and Industry, 76.4 percent of respondents said labor-management conflicts would intensify. In fact, nine of the top 10 conglomerates — all but GS — are already facing direct bargaining demands and protests from subcontractor unions.

Concerns also mount over the expansion of the scope of disputes under Article 2, Paragraph 5. Currently, only working conditions such as wages and hours are included. But if “business decisions” are added, large-scale investments, facility expansions and mergers and acquisitions could all become subject to labor disputes. It could even affect investments promised to the United States under bilateral tariff negotiations. That sense of urgency led business groups to concede to limiting unions’ liability for damages, but they pleaded to stop the expansion of the employer definition — or at least delay the enforcement of the law for one year if the bill must be passed. While the DP justifies the revision in the name of “strengthening labor rights,” any reform must come with safeguards to minimize the shock to industrial sites.

The greater risk lies with small- and medium-sized enterprises. More than half of labor disputes occur in workplaces with fewer than 1,000 employees. Unlike large corporations with dedicated labor relations teams, smaller firms can be thrown into chaos the moment a dispute breaks out. Investment and hiring would inevitably shrink. The external environment is deteriorating as well. The United States has decided to impose a 50 percent tariff on 407 steel and aluminum derivative products, ranging from kitchen knives to transformers — items largely produced by small- and medium-sized enterprises. Related exports to the United States amount to 16 trillion won ($11.5 billion) annually. In this climate, pushing ahead with the Yellow Envelope Act would be akin to snatching away the umbrella of struggling smaller firms in the pouring rain.

In his inaugural address, President Lee Jae Myung stressed “pragmatic market principles.” Yet the Yellow Envelope Act being pushed by the DP moves in the opposite direction. The party must return to the principle of neutrality in labor-corporate relations and listen to the reasonable demands of business. Maintaining the current definition of employers, excluding “business decisions” from labor disputes, and deferring enforcement for at least a year are proposals that deserve serious consideration. With the economic impact all but certain, there is no justification for railroading such a reckless bill.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.