"Yellow Envelope" Bill Passes National Assembly Under Ruling Party Leadership.

On August 24th, the "Yellow Envelope" bill (amendments to Articles 2 and 3 of the Labor Union Act) passed the National Assembly's plenary session. While the bill was promoted under the pretext of protecting the rights of subcontracted workers, it immediately sparked fierce controversy. 

The amended articles contain four significant issues: △ a provision expanding employer liability to include prime contractors, △ provisions that effectively limit damage claims arising from strikes, △ concerns about conflicts with constitutional principles of property rights and the rule of law, and △ a disconnect with ILO and OECD norms. 

While the labor sector welcomed the protection of rights, the business community, academia, and foreign business organizations protested, stating that "the investment environment could collapse."

The amended Article 2, subparagraph 2 of the Labor Union Act stipulates, "The term 'employer' includes not only those who direct or order workers regarding wages and other working conditions, but also those who can factually control or decide concerning them." This now extends employer status to prime contractors.

The business community protested, stating, "Imposing negotiation obligations and legal responsibilities on prime contractors, who have no direct contractual relationship with the union, is excessive regulation." In a media interview, Professor Park Ji-soon of Korea University pointed out, "Legislation that broadly expands the scope of employers in this manner is difficult to find anywhere else in the world," criticizing the unreasonable expansion of employer liability.

The amendment to Article 3 of the Labor Union Act states, "No claim for damages due to workers' dispute activities shall be made within a justifiable scope." This makes it virtually impossible to claim damages even if a company suffers losses due to illegal strikes or occupations. 

The business community argues, "If unions are exempted from liability for illegal acts, the damages will be entirely shifted to companies, shareholders, and consumers." Professor Kim Hee-seong of Kangwon National University stated in a media interview that "provisions exempting liability for illegal acts undermine the foundation of the rule of law." 

The Constitution guarantees the freedom of occupation (Article 15), the right to property (Article 23), and the basic order of a free market economy (Article 119). However, it is argued that the "Yellow Envelope" bill could conflict with the Constitution as it restricts the free business activities of prime contractors and limits the judiciary's authority to determine damages.

Some legal circles have even mentioned the possibility of constitutional litigation. One constitutional scholar pointed out, "Preventing the judiciary from recognizing liability for damages for illegal acts also goes against the principle of separation of powers."

Major OECD countries and ILO conventions guarantee union rights while clearly defining responsibility for illegal acts. 

However, the amended bill in Korea is assessed as having lost balance by strengthening union powers while weakening sanctions. 

The American Chamber of Commerce in Korea warned that it "could damage the business environment and investment attractiveness," and the European Chamber of Commerce in Korea also stated that "if uncertainty persists, we will have no choice but to consider withdrawing from the Korean market." Foreign experts are even discussing the "possibility of capital outflow and the encroachment of Chinese capital."

The controversy extended to the Presidential Office's reaction. 

Immediately after the bill's passage, a Presidential Office official stated a principled stance, saying, "We respect the legislative outcome by the parliamentary majority." Beyond stating that "remedial measures will be considered in the enforcement decree," no specific response was provided.

As the business and academic communities raise the possibility of constitutional litigation, the Presidential Office's stance, which appears to shift responsibility to the National Assembly, has drawn criticism from within and outside the political sphere for being "overly lukewarm on a critical issue directly related to the economy and the rule of law."

Despite the rationale of protecting labor rights, the "Yellow Envelope" bill is generating intense controversy surrounding legal stability and international trust. Experts predict that the Constitutional Court's decision and the government's process of preparing the enforcement decree will serve as a test case for gauging the law's actual effects and social impact.

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