[The Police File] The Yellow Envelope Act: Granting "Illegal Strike Licenses" to Unions

On August 18, the third day of the protest by the Cargo Solidarity of the Public Transport Union under the Korean Confederation of Trade Unions (KCTU), a large banner with their demands was hung on the exterior wall of the Hite Jinro headquarters in Gangnam-gu, Seoul. Photo by Moon Honam munonam@

Starting from Ssangyong Motor, Recently Reemerging with Daewoo Shipbuilding

Opposition Party Insists "No Compensation Claims for Illegal Strikes"

Even Union Paradise France Abolished It...Granting Licenses for Illegal Strikes

In May 2009, Ssangyong Motor union members protested against the unilateral restructuring carried out by the management, Shanghai Automotive Industry Corporation, by illegally occupying the Ssangyong Motor Pyeongtaek plant and continuing their sit-in for over two months. Eventually, the police intervened with public authority to forcibly suppress the protest, during which many union members and police officers sustained various injuries. About 60 union members were arrested on charges including illegal striking. Afterwards, the management filed large compensation claims against the striking workers, and in 2014, the court ruled that the union must pay the company 4.7 billion won in damages.

A citizen, moved by their plight, donated 47,000 won in a yellow envelope to help the Ssangyong Motor union, asking that it be used toward the compensation amount. This news sparked the "Yellow Envelope Campaign," which saw participation from over 47,000 people over about 100 days, raising donations amounting to 1.5 billion won. The strong public response was conveyed to the political sphere, leading to a legislative movement in 2015 for the so-called "Yellow Envelope Act." The core of the act was to limit the management's indiscriminate claims for damages arising from union strikes. The original bill, titled "Amendment to the Labor Union and Labor Relations Adjustment Act," was introduced in the 19th and 20th National Assemblies but was discarded without proper review.

Recently, the Yellow Envelope Act has become a hot issue again. In July, Daewoo Shipbuilding & Marine Engineering filed a 47 billion won damage claim against the subcontractor union strike. The opposition parties, arguing that the union members were being charged an unmanageable amount, have revived the amendment bill. The major opposition party, the Democratic Party of Korea, has identified this as a key livelihood legislative task and is preparing to pass it during the current regular session of the National Assembly. While the intent to prevent indiscriminate damage lawsuits by companies is widely supported, the amendment includes provisions that prohibit holding unions accountable for any strike unless accompanied by "violence or destruction," which has sparked controversy. Even if the union conducts an "illegal strike" causing operational losses to the company, unless it results in "direct damage from violence or destruction," the management cannot claim damages. In essence, it calls for overlooking illegal strikes.

This excessively infringes on the employer's constitutional property rights and risks encouraging strikes. It is rare to find countries that exempt unions from liability even for illegal disputes. The UK, cited by the Democratic Party as a precedent, only sets a cap on damage claims for illegal union acts but does not prohibit damage claims altogether. Even France, known as a union paradise, had a similar law in the 1980s but abolished it following a constitutional court ruling. The Korea Employers Federation’s opposition to the Yellow Envelope Act as potentially the world's only law promoting strikes is understandable.

If the amendment passes, it is obvious that militant union strikes will become commonplace. The Hyundai Steel union occupied the president’s office for about five months starting in May, demanding higher encouragement payments. The HiteJinro union occupied the Seoul headquarters two months ago, demanding increased transportation fees, and continues their sit-in while under police investigation. Such lawlessness led by unions is frequent enough to be called rampant. According to the Ministry of Employment and Labor’s "National Labor Union Status Analysis," as of the end of 2020, there were about 6,500 unions formed within companies in Korea, with 2.8 million union members. If the amendment passes, all of these will effectively hold a "license for illegal strikes." The mere thought is terrifying. It naturally raises the concern, "Who will raise the cattle?"