KEF Chairman Sohn Kyung-shik Urges Review of Yellow Envelope Act, Citing Threats to Future Jobs

First Solo Press Conference in Seven Years as Chairman
Shipbuilding, Semiconductor, and Automotive Industries Also Express Concerns

As the passage of the so-called "Yellow Envelope Act" (the amendment to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act), which expands corporate responsibility to subcontracted workers, is imminent in the National Assembly, Sohn Kyung-shik, Chairman of the Korea Employers Federation (KEF) and Chairman of CJ Group, made a direct appeal for reconsideration. As discussions on the Yellow Envelope Act have gained rapid momentum, he held an unusual press conference to urge a review of the bill.

Korea Employers Federation

On July 31, at the KEF Hall in Mapo-gu, Seoul, Chairman Sohn held an emergency press conference and stated, "The Yellow Envelope Act could destabilize labor-management relations due to frequent and radical industrial actions, shake the industrial ecosystem to its roots, and even threaten jobs for future generations." He argued, "Even now, the National Assembly should halt the amendment of the Yellow Envelope Act and ensure that sufficient consultation between labor and management takes place through social dialogue."

This was the first time Chairman Sohn has held a solo press conference since taking office in February 2018. He began by saying, "Please understand that this emergency press conference reflects just how desperate the business community feels about the Yellow Envelope Act."

He predicted that industries with multi-tiered collaboration systems, such as shipbuilding, would be hit especially hard. Chairman Sohn said, "Looking at the contractual relationships of shipbuilders, some companies have more than 3,500 partner firms," and added, "If a significant portion of those many subcontracted workers make demands as parties to industrial disputes, how can the main contractor possibly handle it all? If so, can Korea's shipbuilding industry even operate properly?"

Korea Employers Federation

The semiconductor and automotive industries, which participated in the press conference, also voiced concerns. Kim Tae-jung, Executive Director at Samsung Electronics, said, "The semiconductor market is currently extremely competitive, so flexible decision-making is crucial. If additional internal uncertainties are introduced into labor-management relations, we are concerned about how we will overcome an already uncertain business environment in the future." Jung Sang-bin, Vice President of Hyundai Motor Company, also commented, "If the Yellow Envelope Act passes, there will likely be many procedural and cost-related difficulties for managers when advancing business projects."

In response, Chairman Sohn stated, "The Yellow Envelope Act is a significant change that could bring enormous confusion to our labor-management relations, so sufficient consultation through social dialogue is necessary." Lee Dong-geun, Executive Vice Chairman of the KEF, also said, "There has been almost no dialogue between labor and management so far, nor have there been any public hearings. We are not saying the amendment should not happen, but if it is agreed upon through intense dialogue and debate between labor and management, then it is right for the government or the ruling party to legislate it."