[Law Firm Now] Sejong Successfully Concludes Yellow Envelope Act Enforcement Decree and Guidelines Seminar

First Law Firm Seminar Interpreting Ministry Guidelines
Practical Strategies for Corporate Response Presented
"Careful Decision-Making Needed Over Speed"

The "Yellow Envelope Act Enforcement Decree and Guidelines Interpretation Seminar," hosted by Sejong Law Firm (Managing Partner Oh Jonghan) on the 6th, concluded successfully.

This seminar was organized just two months before the enforcement of the amended Trade Union and Labor Relations Adjustment Act, which expands the definitions of "employer" and "labor dispute." The event introduced the previously announced draft amendment to the enforcement decree of the Trade Union Act and the recently published draft interpretation guidelines from the Ministry of Employment and Labor, and examined practical response strategies for companies.

This was the first seminar held after the government announced its interpretation guidelines. More than 700 participants from the business, legal, and labor sectors, including corporate legal team members, registered to attend, reflecting the high level of interest in the significantly revised labor-management system. The hybrid seminar was conducted both offline and online, and offline registration closed early on the first day of applications.

On the afternoon of the 6th, attendees are seen attentively listening to the competition at the "Yellow Envelope Act Enforcement Decree and Guidelines Interpretation Seminar" held at the Sejong Law Firm in Jongno-gu, Seoul. Photo by Sejong Law Firm

The seminar was moderated by Kim Minseok, Advisor at Sejong Law Firm and former Vice Minister of Employment and Labor (37th Civil Service Exam). The event was divided into three sessions, each covering a distinct topic: ▲ Criteria for Determining Substantive Control ▲ Negotiation Procedures for Subcontractor Unions ▲ Subjects of Negotiation and Industrial Action.

Advisor Kim stated, "The biggest concern for companies is uncertainty," adding, "This year, in addition to economic instability and a sharp rise in exchange rates, the implementation of the Yellow Envelope Act from March 10 is expected to further increase uncertainty in overall corporate management, including HR and labor affairs."

He continued, "Especially for those of you working in legal affairs or on the ground, I believe you are particularly concerned about these challenges," and explained, "Our labor group organized today's seminar to help alleviate some of these concerns and difficulties."

The first session featured Partner Lawyer Jo Chanyoung, a former judge specializing in labor cases at the Seoul High Court (29th Judicial Research and Training Institute), who explained the concrete criteria for determining "employer status" under Article 2, Paragraph 2 of the amended Trade Union Act, using real-life examples, and analyzed practical issues that may arise after the law takes effect.

On the afternoon of the 6th, Partner Lawyer Jo Chanyang is seen giving a lecture at the "Yellow Envelope Act Enforcement Decree and Guidelines Interpretation Seminar" held at the law firm Sejong in Jongno-gu, Seoul. Law firm Sejong

Lawyer Jo stated, "After the three precedents involving courier, shipbuilding, and steel companies, the Seoul Administrative Court issued rulings on department stores and duty-free shops, which were even more innovative than those devised by the Central Labor Relations Commission," adding, "The issue of substantive control is a major topic of interest among judges because it expands the three basic labor rights of workers that were not previously recognized, and even if recognized, it seems that the courts believe it does not impose a significant burden on the principal contractor."

He further predicted, "After the amended law is enforced, we can expect precedents that broadly recognize the scope of collective bargaining."

Lawyer Jo noted, "The government guidelines present 'structural control' over working conditions as the criterion for determining employer status. In typical in-house manufacturing subcontracting, it is highly likely that decisions will be made based on this standard," adding, "Work location, subcontracting contracts, and work process systems can be key indicators."

He continued, "In other industries such as services, it is more likely that the existence of substantive control will be judged for each 'negotiation agenda item' rather than across the entire principal-subcontractor relationship," and explained, "Based on the case law, if the principal contractor can resolve an issue but the subcontractor cannot, the 'principal contractor's ability to resolve (dispose)' can serve as a criterion for broadly recognizing the principal contractor's employer status."

The second session was led by Partner Lawyer Kim Jongsu (37th Judicial Research and Training Institute), who explained the changes to the procedures for unifying bargaining channels and determining bargaining units after the amended law takes effect, focusing on "Negotiation Procedures for Subcontractor Unions."

Lawyer Kim explained, "The procedure for unifying bargaining channels consists of two stages: determining the unions eligible to demand bargaining (like selecting players for a match) and determining the representative bargaining union. While management can engage in individual negotiations, they cannot selectively negotiate with specific unions, as this would mean abandoning the bargaining channel unification procedure, which is designed for the convenience of employers."

He added, "When the amended law and enforcement decree come into effect, subcontractor unions will be included in these procedures, meaning that in addition to unions A, B, and C of the principal contractor, a subcontractor union can also participate as a bargaining party."

On the afternoon of the 6th, Partner Lawyer Kim Jongsu is seen giving a lecture at the "Yellow Envelope Act Enforcement Decree and Guidelines Interpretation Seminar" held at the law firm Sejong in Jongno-gu, Seoul. Law firm Sejong

Lawyer Kim stated, "Unlike principal contractor unions, which have a duty to bargain on all agenda items during the bargaining channel unification procedure, subcontractor unions have a duty to bargain only on specific agenda items. The current enforcement rules do not require unions to specify agenda items when demanding bargaining, so if a subcontractor union makes a bargaining demand without specifying agenda items, the union should be asked to confirm the agenda items in its response."

He continued, "If a union that has demanded bargaining finds that the public notice of its bargaining demand differs from the content it submitted, or if the notice is not posted, it can file an objection with the employer and subsequently request a correction from the Labor Relations Commission. Although the revised enforcement decree extends the decision period of the Labor Relations Commission from 10 to a maximum of 20 days, it is unlikely that decisions will actually be made within 20 days."

Lawyer Kim predicted, "The joint bargaining representative group is determined based on the number of members in each union, and the likelihood of forming a joint bargaining representative group among subcontractor unions has increased. For example, if there is one principal contractor union and three subcontractor unions, the three subcontractor unions could form a coalition to become the majority union."

He added, "However, if the principal contractor's bargaining obligations differ by agenda item, questions arise as to whether channel unification is possible, whether unification can proceed without regard to agenda items, and whether principal contractor unions that bargain on all issues should be treated the same as subcontractor unions that bargain only on certain issues. From the subcontractor union's perspective, the simplest approach is to apply for and be granted separation of the bargaining unit."

Lawyer Kim concluded, "As a result, what was previously an exception recognized by case law-the separation of bargaining units-has now become the rule," and emphasized, "When a subcontractor union is included, it is necessary to first determine whether there is a duty to bargain before recognizing separation."

He noted, "Although it is possible to seek a provisional injunction to allow collective bargaining, if there is a dispute over substantive control, the Labor Relations Commission is required to make a decision within 20 to 30 days. This is not enough time to fully understand the situation, and such tight deadlines are not only difficult for the Commission, but also for companies."

He warned, "The golden time is from late March to early April. If you do not prepare in advance, it will be difficult."

On the afternoon of the 6th, partner lawyer Yang Juyeol is seen giving a lecture at the "Yellow Envelope Act Enforcement Decree and Guidelines Interpretation Seminar" held at the law firm Sejong in Jongno-gu, Seoul. Photo by Sejong Law Firm

The final, third session featured Partner Lawyer Yang Juyeol, a former in-house counsel at Hyundai Motor Company (1st Bar Exam), who presented on "Subjects of Negotiation and Industrial Action."

Lawyer Yang explained, "The scope of labor disputes is significant because it relates both to the range of agenda items that trigger the duty to bargain and to the legitimacy (effectiveness) of industrial action, so it is important to examine these issues."

He stated, "Three new subjects of dispute have been added under Article 2, Paragraph 5 of the amended Trade Union Act. Items that were previously optional bargaining matters have become mandatory, meaning that the scope of subjects for both bargaining and industrial action has expanded."

Lawyer Yang pointed out, "One might wonder what changes will occur, but when combined with the amendment to employer status under Article 2, Paragraph 2, the law can, in effect, be applied without limit. In reality, any action by the employer that affects the working conditions of both principal and subcontractor employees can become a subject of bargaining."

He continued, "In particular, the explicit inclusion of clear violations of collective agreements by the employer means that such violations, which go beyond interest disputes and into rights disputes, can now be raised as bargaining agenda items and can justify industrial action. There remains a question as to whether it is appropriate to allow this, and whether the Ministry of Employment and Labor's interpretation guidelines can resolve these concerns."

Regarding the expanded subjects for collective bargaining, Lawyer Yang clarified, "Mergers, splits, transfers, and sales themselves are not subjects for collective bargaining, as these are managerial decisions. However, layoffs, job reassignments due to restructuring, and employment succession that occur during these processes are included as subjects for collective bargaining."

On the afternoon of the 6th, at the law firm Sejong in Jongno-gu, Seoul, Kim Minseok, Advisor, who presided over the "Yellow Envelope Act Enforcement Decree and Guidelines Interpretation Seminar." Law Firm Sejong

Lawyer Yang stated, "From the union's perspective, they will try to claim as broad a range of bargaining subjects as possible, since this is advantageous in labor disputes. Issues that were previously raised only for the sake of compromise can now become the actual goals of bargaining. Even individual employee rights disputes may be included in collective bargaining if they are collective in nature."

He added, "After making broad bargaining demands not only to the direct contractual employer but also to the principal contractor, it is highly likely that unions will proceed to industrial action. If both the principal and subcontractor unions belong to the same umbrella organization, there is a possibility of joint action on common issues and union solidarity."

At the end of his presentation, Lawyer Yang stated, "In my final opinion, I do not believe that the current guidelines from the Ministry of Employment and Labor provide concrete interpretive standards for the amended labor laws. This applies not only to the provisions on labor disputes but also to Article 2, Paragraph 2 on employer status and other areas. Ultimately, each issue will be definitively interpreted and clarified only when the courts issue rulings on specific disputes."

He emphasized, "Given the current situation, where the Ministry's guidelines can be interpreted in various ways depending on the positions of employers, unions, and other stakeholders, confusion is likely to continue. Therefore, rather than making hasty decisions, it will be relatively more important for each company to make careful decisions based on specific circumstances."

After the lectures, the presenters held a Q&A session to answer questions submitted in advance.

Sejong Law Firm, which formed a "Yellow Envelope Act Task Force" in June last year, has taken the lead on Yellow Envelope Act issues by holding a "Response Strategies for the Yellow Envelope Act" seminar on August 6, just before the Act passed the National Assembly, and publishing and distributing "50 Questions and 50 Answers on the Yellow Envelope Act" immediately after its passage.