A Historic Milestone for Labor Rights in South Korea
“Every worker has the right to unionize and negotiate with their employer. That simple, undeniable truth has finally been written into law after two decades.”
— From the press conference by the Committee for the Revision of Articles 2 and 3 of the Trade Union Act, August 24, 2025
After more than 20 years of tireless advocacy, the South Korean National Assembly has passed the long-awaited Yellow Envelope Act—a sweeping amendment to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act (TULRAA). The law, which has become a symbol of labor reform in the country, finally passed the National Assembly on August 24, 2025, marking a pivotal moment for workers’ rights.
The journey began back in 2004, when the first version of the bill was submitted. Since then, it has faced repeated setbacks, most notably two presidential vetoes during the Yoon Suk-yeol administration. But this time, with the current administration expressing support, the law is expected to be promulgated without resistance and go into effect after a six-month preparation period.
The amendment to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act—commonly known as the "Yellow Envelope Act"—was passed with an overwhelming majority: 183 votes in favor and just 3 against.
The conservative People Power Party (PPP) refused to participate in the vote, staging a walkout. Meanwhile, lawmakers from the Reform Party cast opposing votes. |
What the Yellow Envelope Law Changes
When enacted, the law will bring major changes for precarious workers, especially subcontracted or dispatched workers:
Subcontracted workers will be able to negotiate directly with the original (primary) employer, often referred to as the “real boss.”
It limits excessive damage claims made by corporations in retaliation against labor union activities.
It aims to close the legal loopholes that excluded many vulnerable workers from basic labor rights such as collective bargaining and union protection.
This law directly targets the long-standing reality where subcontractors are not recognized as employees of the companies that actually control their working conditions. By amending the legal definitions of “employee” and “employer,” the law grants long-denied rights to thousands of workers.
A Day of Victory—and Drama in Parliament
The final vote took place at 9:10 a.m. on August 24. Out of 186 lawmakers present, 183 voted in favor, with only 3 opposing the bill. In protest, Members of the conservative People Power Party, who had launched a filibuster the day before, walked out before the vote. Meanwhile, lawmakers from the Reform Party voted against the legislation.
As the bill passed, over 40 workers in the Assembly gallery stood up in applause, visibly moved by the historic moment they had long fought for. Among them were union activists, subcontracted workers, and labor advocates who had been on the front lines of this struggle for decades.
Speaker Woo’s Emotional Reflection
National Assembly Speaker Woo Won-shik, who himself co-sponsored the Yellow Envelope Act during the 19th Assembly back in 2015, shared a heartfelt statement shortly after the vote:
“This bill was born from the reality of our labor market—where we can’t call workers ‘employees’ and can’t call bosses ‘employers.’ That’s why I used to call it the ‘Hong Gil-dong Law.’
Though there were compromises along the way, this amendment represents a step forward. It narrows the blind spots in labor rights and brings us closer to a society where work is safer, healthier, and more just.”
His reference to “Hong Gil-dong” (a Korean folk hero who couldn’t call his father ‘father’) symbolized the absurdity faced by countless subcontracted workers, denied their right to name their employer and exercise their rights.
A Law Written in Sacrifice
For workers, the Yellow Envelope Act is more than policy—it’s a hard-earned victory built on years of struggle, court battles, strikes, and even personal ruin. Many workers faced astronomical lawsuits for engaging in collective action. The law takes its name from the small yellow envelopes used in a grassroots donation campaign to help pay these damage claims.
Now, those yellow envelopes have become a symbol of hope fulfilled.
What’s Inside the “Yellow Envelope Law”?
The official title of the newly passed bill is the Partial Amendment to the Trade Union and Labor Relations Adjustment Act (TULRAA)—but it is widely known to the public as the “Yellow Envelope Law.” At its core, the law amends Articles 2 and 3 of the act, aiming to better guarantee the rights of workers to organize and negotiate, especially for those in subcontracted or non-standard labor arrangements.
The law contains two key reforms:
1. Redefining “Employer” — Making Real Bosses Accountable
One of the most groundbreaking changes is found in Article 2, which expands the legal definition of “employer.” Under the old law, only direct contractors or business owners were recognized as employers. Now, the amended definition includes:
“Any person who, regardless of whether they are a party to the labor contract, has substantial and specific control over the worker’s employment conditions.”
This means that subcontracted workers will now be able to negotiate directly with the real decision-makers—often large parent companies who previously avoided union talks by hiding behind legal formalities.
Still, not every parent company will be forced to negotiate. If a contractor does not have substantial influence over the working conditions of subcontracted workers, they will not be obligated to engage in collective bargaining.
This directly counters previous objections from business lobbies who claimed that the law would force corporations to negotiate endlessly with hundreds of small union groups. In reality, the new rule is more nuanced and only applies when real power is involved.
2. Expanding the Scope of Legal Strikes
The second major revision concerns Article 3, which broadens the definition of what constitutes a legitimate labor dispute (or “industrial action”). Previously, strikes were only protected under law when they related to “decisions over working conditions,” such as wages, hours, or benefits.
Now, under the Yellow Envelope Law, workers can also strike over “managerial decisions that are closely tied to working conditions,” such as mass layoffs or company shutdowns.
This is a major shift. In the past, when corporations carried out drastic decisions like closures or restructuring, they often claimed these were purely managerial rights and not subject to negotiation. Workers who went on strike against such actions were labeled “illegal strikers” and hit with massive damage suits.
Yang Kyung-soo, President of the Korean Confederation of Trade Unions (KCTU), praised the law, saying:
“Even when workers lost their jobs to mass layoffs or restructuring—when their very survival was denied—they weren’t legally protected. This law finally shines a light on that dark reality.”
3. What’s Missing: The “Presumption of Worker Status” Clause
Despite these advances, the law fell short of fully meeting labor advocates’ demands. One critical clause that was excluded in the final version is the so-called “presumption of worker status.”
This clause would have protected non-salaried and platform workers—including freelancers, gig workers, and the self-employed—by allowing them to be presumed as workers in disputes, even if they don’t formally qualify under existing labor law.
As of 2023, an estimated 8.6 million people in Korea fall into this category, often left out of key protections. Their exclusion from the Yellow Envelope Law remains a major limitation and a target for future reform.
Ending the “Lawsuit Bombs”: Damage Claims Against Strikers Now Restricted
On August 24, a press conference was held on the steps of the National Assembly building in Yeouido, Seoul, to welcome the passage of the amendment to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act. Under the slogan “Guarantee All Workers the Right to Unionize and Bargain,” participants raised their voices in solidarity, chanting slogans to mark this historic moment.
One of the most tragic and urgent reasons behind the push for the Yellow Envelope Law was the unchecked abuse of damage claims and asset seizures against striking workers. Often referred to as “손배·가압류” in Korean legal shorthand, these lawsuits have historically pushed workers to the brink—even to death.
Article 3 Reform: Curbing Abusive Lawsuits Against Unions
At the heart of the revised Article 3 is a clear goal: to stop companies from weaponizing lawsuits to financially ruin labor unions and their members for engaging in lawful strikes.
To be clear, the previous law already stated:
“Employers shall not claim compensation for damages against unions or workers for losses incurred due to lawful collective bargaining or industrial action under this Act.”
However, in reality, employers and unions often interpreted what counted as a “lawful” action very differently. This legal gray area allowed companies to repeatedly file lawsuits demanding massive sums against striking workers, claiming their actions were “illegal” and thus liable.
The results were devastating. Countless workers were sued for billions of won, had their assets frozen, or saw their wages garnished. Some workers, crushed under this pressure, took their own lives.
What’s New: Clearer Protections for Workers
To prevent this kind of tragedy, the revised Yellow Envelope Law adds specific conditions and restrictions on when damage claims can be filed:
No liability can be imposed on workers or unions if a strike was carried out in defense against illegal actions by the employer.
Companies cannot file lawsuits with the purpose of obstructing or damaging the union, its activities, or its members.
A new clause allows employers to waive damage claims voluntarily—something they previously claimed was impossible due to “fiduciary duty.”
Before this reform, many corporations argued that dropping a damage claim—no matter how unjust—could be considered “breach of duty” under Korean commercial law. Now, with the new legal indemnity clause, such arguments lose their weight, empowering employers to step away from lawsuits without legal risk.
A Legal System That No Longer Pushes Workers to Suicide
By making it harder for companies to sue workers into silence, this reform seeks to end an era of fear. Striking should never be a death sentence. The Yellow Envelope Law draws a firm line against this abuse and restores the right to organize as a matter of dignity—not danger.
As Yang Kyung-soo, president of the Korean Confederation of Trade Unions, stated:
“Even when workers lost their jobs, even when their very survival was denied, they weren’t guaranteed the legal right to fight. I believe this law shines a small light on that long-standing darkness.”
No comments:
Post a Comment