Home > National > Social Affairs

Three key questions emerge as National Assembly pushes pro-labor bill forward

Published: 24 Aug. 2025, 17:11

Yang Kyung-soo, head of the Korean Confederation of Trade Unions, speaks during a press conference held by five opposition parties, labor groups and civil society organizations on March 6 on the steps of the National Assembly building in Yeouido, western Seoul, calling for the passage of the "Yellow Envelope Bill." [NEWS1]

The National Assembly passed the pro-labor “Yellow Envelope Bill” on Sunday, pushing through amendments to Articles 2 and 3 of the Labor Union and Labor Relations Adjustment Act. The move by the Democratic Party left major questions regarding how the law will work in practice.

Three main issues have emerged in the debate. The first is how clearly the bill’s expanded definition of “substantial control” will operate. The second is whether collective bargaining procedures can realistically accommodate both contractors and subcontractors at the same table. The third concerns the six-month grace period before enforcement and whether it provides enough time for adjustment.

Defining “substantial control”

Under the new language, a carmaker could be held responsible for subcontracted workers if it exerts authority over personnel or work orders. Business groups warn that the ambiguity will push disputes into the courts, intensifying what they call the “judicialization” of labor relations.

Finance Minister Koo Yun-cheol attempted to assuage those concerns on Tuesday, explaining that the legislation codifies criteria already applied in labor commission decisions and court rulings. He stressed that the government would establish clearer standards through consultations with experts and stakeholders.

The Ministry of Employment and Labor also promised to add specificity through enforcement decrees and guidelines. Even so, legal scholars point out that the concept of “substantial control” remains vague.

Park Eun-jung, a lawyer at Bae, Kim & Lee and former researcher in the Supreme Court’s labor division, noted that unlike rulings on ordinary wages, which are guided by the fixed principle of “regularity,” there is no Supreme Court precedent on subcontractor bargaining rights.

Park added that the amendment does not even contain a delegated clause authorizing presidential decrees, meaning that any attempt to narrow its scope through regulation may lack binding force and remain at the level of administrative guidance.

The "Yellow Envelope Bill" passes in a National Assembly plenary session in western Seoul on Aug. 24. [JOONGANG ILBO]

Who represents labor?

Representation at the bargaining table is another thorny issue. Current law requires multiple unions in a workplace to unify their bargaining channels and designate a representative union.

With the amendment recognizing both contractors and subcontractors as bargaining counterparts, experts question how representation could be organized in practice. The wage and working condition gaps between contractors and subcontractors are often too wide to allow for meaningful joint bargaining, and even among subcontractors, multilayered outsourcing structures complicate the question of who can legitimately claim to speak for whom.

Speaking at a Korean Society of Labor Law seminar on Tuesday, Kwon Oh-seong, a professor at Yonsei Law School, said, “Forcing bargaining units to encompass both contractors and subcontractors would effectively bar subcontractor unions from leading negotiations.

“Allowing each subcontractor to bargain separately would defeat the bill’s stated aim of bridging the contractor-subcontractor gap,” said Kwon.

Cho In-sun, a lawyer at YK Law, echoed that concern, pointing out that when a prime contractor’s union counts 20,000 members while a subcontractor’s may have only 20, the smaller union’s representative power becomes almost meaningless. This, she warned, could spark conflicts between the unions themselves and give rise to constitutional challenges, petitions for constitutional review of the law and disputes before the National Labor Relations Commission.

The Korea Enterprises Federation (KEF) chairman, Sohn Kyung-shik, holds a press conference to express his concerns over the proposed revisions to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act, also known as the Yellow Envelope Bill, at the KEF office in Mapo District, western Seoul, on July 31. [NEWS1]

Is six months enough?

The six-month grace period before enforcement has also drawn criticism. The government insists that implementation within half a year of promulgation is reasonable, but business groups counter that at least a year is required to avoid workplace confusion.

They often cite the example of the five-day workweek, which took eight years to fully implement. That reform began with large corporations and public institutions in 2004 and was only extended to smaller firms by 2011, with transition measures such as temporarily expanded overtime caps, subsidies for companies adjusting to shorter hours and employment permit policies to address labor shortages.

By contrast, they point to the sharp 16.4 percent increase in the minimum wage in 2018, introduced without comparable buffers, as a cautionary tale of disruption for small businesses and self-employed individuals.

“This bill fundamentally reshapes labor relations,” said one business group official. “Forcing enforcement within six months, without broad social consensus or sufficient preparation, is far too hasty. Without time to secure even minimal defensive measures for companies, the law’s legislative intent cannot be realized in the workplace.”

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.
BY KIM SU-MIN [[email protected]]