Economic Five Organizations Oppose Passage of Yellow Envelope Act... "President Should Exercise Veto" (Comprehensive)

[Asia Economy Reporter Park Sun-mi] Economic organizations have collectively expressed their 'regret' and opposition after the amendment to the Labor Union and Labor Relations Adjustment Act (hereinafter 'Labor Union Act'), known as the 'Yellow Envelope Act,' passed the National Assembly's Environment and Labor Committee plenary session on the 21st.

On the 21st, Im I-ja, a member of the People Power Party, requested a procedural speech from Chairman Jeon Hae-cheol before the submission of the amendment to Articles 2 and 3 of the Labor Union Act, known as the "Yellow Envelope Act," at the Environment and Labor Committee plenary meeting held at the National Assembly in Yeouido, Seoul. Photo by Kim Hyun-min kimhyun81@

The Korea International Trade Association stated in a position paper, "The amendment to the Labor Union Act risks encouraging illegal actions by labor unions, further escalating conflicts at workplaces," adding, "Such legislation is clearly wrong and unprecedented worldwide."

They assessed that over the past few years, excessive legislation and regulatory expansion?such as the introduction of the 52-hour workweek and the enforcement of the Serious Accident Punishment Act?have restricted corporate investment and activities, leading to the collapse of our export industry base. Due to excessive corporate regulations causing companies to relocate overseas, our global export market share fell from 3.2% in 2017 to 2.85% in 2019, and further down to 2.83% last year, resulting in the loss of approximately 500,000 quality jobs.

The KITA explained, "Although this legislation is promoted under the pretext of protecting workers, by exempting illegal labor disputes in industrial sites, it will encourage the overseas relocation of our companies, ultimately reducing workers' jobs and lowering their quality of life." They emphasized, "If this bill passes the National Assembly plenary session, the President should immediately exercise the veto power."

The Federation of Korean Industries also expressed regret in a statement issued under the name of Economic Headquarters Director Choo Kwang-ho, voicing concerns that illegal strikes may increase in the future. The Federation stated, "Expanding the concept of employers to allow subcontracted labor unions to engage in disputes against primary contractors and broadening the scope of labor disputes will deepen conflicts and confrontations between labor and management and lead to widespread strikes." On the other hand, they pointed out that corporate defense measures are insufficient. They noted that limiting claims for damages due to illegal acts contradicts the existing illegal act framework and may infringe on corporate property rights.

They also pointed out the possibility of investment and employment contraction. The Federation emphasized, "Countries worldwide are fiercely competing to create a business-friendly environment to attract investment," and added, "Discussions on amending the Labor Union Act that suppress investment and employment and dampen corporate motivation must be halted."

The Korea Chamber of Commerce and Industry predicted that the widespread use of subcontracting in the current industrial structure would face significant obstacles and that claims for damages due to illegal strikes would become virtually impossible.

Yoo Il-ho, head of the Employment and Labor Policy Team at the Korea Chamber of Commerce and Industry, pointed out, "This legislation differs from the existing negotiation and dispute action system, and even with sufficient consideration and meticulous design to minimize conflicts with the existing order, it is legislation that cannot avoid causing confusion on the ground and economic shocks." He added, "Legislation that simply changes a few provisions without such discussions should be avoided as it treats companies and the economy as experimental subjects." Kang Seok-gu, head of the Research Headquarters at the Korea Chamber of Commerce and Industry, also raised his voice, calling it "an anti-economic legislative act that weakens cooperative relationships between companies and destroys the industrial ecosystem, making it impossible to respond."

The Korea Employers Federation (KEF) expressed regret immediately after the bill's passage in a statement, saying, "The amendment indiscriminately expands the concepts of employers and labor disputes, dragging companies that are not parties to employment contracts into disputes, ultimately severely undermining corporate and national competitiveness." They also pointed out, "The provision limiting claims for damages for illegal labor disputes is inconsistent with the legal system as it recognizes exceptions to joint tort liability under civil law and grants special privileges to labor unions and union members."

The Korea Federation of Small and Medium Business also conveyed in a written commentary, "We hope that the upcoming National Assembly Legislation and Judiciary Committee and plenary session will reflect the voices of small and medium-sized enterprises in the field and halt the legislation."