Ahead of Yellow Envelope Act Implementation... Government to Hold Closed-Door Meeting with Business Leaders

Kim Jeong-gwan and Kim Young-hoon to Hold Closed-Door Meeting with Economic Organizations on January 21
Labor Groups Warn Against Any "Rollback Attempts"

The government is entering final negotiations as it plans to hold a closed-door meeting with business circles ahead of the enforcement of the so-called "Yellow Envelope Act" (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) scheduled for March. The industrial sector is expected to demand revisions or supplements to the guidelines before the law takes effect, expressing concerns that the expansion of the definition of principal employer will increase the scope of responsibility and costs.

According to government and business sources on January 16, Minister of Trade, Industry and Energy Kim Jeonggwan and Minister of Employment and Labor Kim Younghoon are scheduled to hold a closed-door meeting on January 21 with representatives from major economic organizations and large corporations. The meeting was reportedly proposed by Minister Kim Jeonggwan. Economic organizations such as the Korea Employers Federation and the Korea Chamber of Commerce and Industry, as well as key corporate figures, are expected to attend. The location and detailed schedule of the meeting are still being coordinated.

The core of the Yellow Envelope Act is the expansion of bargaining counterparts for subcontracted workers to include principal employers, with the criteria for determining "employer status" and the requirement of "economic dependence" emerging as key issues. There is strong opposition from the business community, as the burden on management could increase significantly depending on how the principal employer's actual control or involvement is assessed.

The government has stated its intention to minimize disruption by gathering opinions from all sides during the enforcement decree and guideline stages. Minister Kim Younghoon recently said, "We will collect opinions from both labor and business circles and accept them in a reasonable direction." The government appears to have chosen a practical, closed-door approach to collecting opinions instead of a tripartite public hearing involving labor, management, and government.

The business community is expected to focus on raising concerns about the ambiguity of the scope of principal employer responsibility and the potential increase in costs during the meeting. The impact is considered to be particularly significant in industries with entrenched subcontracting structures, such as manufacturing, shipbuilding and plant construction, and IT and platform sectors. Business leaders have stated, "If the criteria for determining employer status are applied too broadly, negotiation costs, litigation risks, and management responsibilities for employers could surge," and are calling for the establishment of clear standards.

On the other hand, labor groups argue that recognizing principal employer responsibility is essential, given the intent of the law. The Justice Party and the Korean Confederation of Trade Unions have warned against any moves to weaken the guidelines, cautioning against a retreat in labor rights protections. There are also concerns that additional clashes between labor and business circles may occur before and after the law takes effect.

The government plans to review whether to supplement the guidelines based on the outcome of the closed-door meeting and intends to hold separate discussions with labor groups in the future.