In-depth Analysis of the Yellow Envelope Law: The Meaning of Expanded Employer Scope and Limited Damage Liability

                                     

       

[The Yellow Envelope Law: In-depth Analysis for the General Public]

       

The 'Yellow Envelope Law' has sparked deep debate in Korean society. Beyond the name of the bill itself, this name carries a complex meaning: the pain of the labor field and the empathy of citizens. We will explain in an easy-to-understand and clear manner why this bill was born, what its contents are, and what impact it will have on society, from the perspective of the general public.

   

   

The Yellow Envelope Law, the Meaning Behind Its Name and the Reality of Labor in Korean Society

    

1. What is the Yellow Envelope Law?

   

The name 'Yellow Envelope Law' feels much more familiar than its official name, the 'Amendment to the Labor Union and Labor Relations Adjustment Act.' This nickname contains not just the contents of the bill, but also the tragic history of Korean labor and the warm hearts of citizens who empathize with it. During the Ssangyong Motors layoff incident in 2009, after a 77-day strike, the company filed a lawsuit for 4.7 billion KRW in damages against union members. This caused unbearable suffering for many workers and their families.

   

A citizen, upon hearing of this tragedy, sent a yellow envelope containing 47,000 KRW to a laid-off Ssangyong Motors worker in 2014, which is the direct origin of the 'Yellow Envelope Law.' This was a national wish, reviving the meaning of a past paycheck envelope, hoping that workers suffering from damage suits and provisional seizures could return to their daily lives. This campaign led to a total fundraising of 1.5 billion KRW, which soon led to a social discussion about the need to solve the problem of excessive damage claims that threaten workers' right to live. As such, the Yellow Envelope Law is not just a legal amendment but a result of social empathy and reflection, holding great significance.

                 

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2. Three Key Provisions of the Yellow Envelope Law: What has Changed?

   

The Yellow Envelope Law contains three main provisions to improve long-standing practices and unreasonable aspects of the labor field.

   

1. Expanded Employer Scope: The Right to Negotiate with the 'Real Boss'

   

One of the biggest changes is the practical expansion of the scope of the 'employer' under the Labor Union Act. Previously, only the direct employer who signed the labor contract was considered an employer. However, the amendment defines an employer as including 'a person who exercises substantial control or influence over a worker's working conditions.' This provides a legal basis for subcontracted workers, special-category workers, and platform workers to negotiate directly with the primary company that substantially determines their working conditions. This change reflects the judicial trend where existing courts have partially recognized the employer status of primary contractors through lower court rulings.

   

2. Limited Excessive Damage Liability: Reasonable Restriction of 'Damage Bombs'

   

The Yellow Envelope Law includes a provision that limits excessive claims for damages resulting from labor disputes. This bill does not mean unconditional exemption for illegal labor disputes. Legal responsibility still applies to clear illegal acts such as violence or destruction. The purpose of this law is to prevent the right to claim damages from being abused as a means to threaten a worker's right to live. The 2023 Supreme Court ruling (on the Hyundai Motors irregular workers' union lawsuit) also ruled that the ratio of responsibility for individual union members should not be set uniformly but should be determined by each person's role and contribution, which is a judgment similar to the intent of the bill. This shows that the Yellow Envelope Law is not undermining the rule of law but is an attempt to codify the 'principle of self-responsibility' that the courts have already developed.

   

3. Expanded Scope of Labor Disputes: Restructuring is also a Subject of Labor Disputes

   

Finally, the scope of labor disputes has been expanded to include not only existing 'wages, working hours' but also 'management decisions that have a significant impact on working conditions, such as restructuring and layoffs.' This provision allows workers to demand prior consultation rights regarding major corporate decisions. The purpose is to resolve issues through consultation and negotiation rather than unilateral notification, and to expand workers' participation in corporate management activities.

   

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3. Points of Fierce Debate and Future Outlook

   

The Yellow Envelope Law is at the center of a sharp conflict between those who support it, arguing for 'guaranteed labor rights' and 'social justice,' and those who oppose it, raising concerns about the 'principle of the rule of law' and 'management stability.'

   

- Proponents: "Substantial Guarantee of the Three Rights of Labor"

   

Labor groups and civic organizations argue that the Yellow Envelope Law is the minimum necessary measure to substantially guarantee the three rights of labor (right to organize, right to collective bargaining, and right to collective action) protected by the Constitution. They criticize excessive damage claims by companies as 'Strategic Lawsuits Against Public Participation (SLAPP)' aimed at dissolving unions, and say that the bill complies with International Labor Organization (ILO) conventions and legislative precedents in developed countries.

   

- Opponents: "Threat to Industrial Ecosystem and Management Rights"

   

The business community warns that this bill will encourage excessive strikes and cause extreme chaos in the industrial field due to the endless negotiation demands of subcontract unions. They express concern that business activities could become impossible, especially in industries with complex primary-subcontractor cooperation systems. The government and ruling party also point out that the bill could encourage illegal strikes and that the procedural issue of being passed by the opposition party alone without sufficient social consensus.

   

However, some counterarguments have been raised that some of these opposing arguments are untrue. For example, the claim that 'subcontractors with unions will lose their work' is already an illegal unfair labor practice under the existing Labor Union Act, and the Supreme Court has recognized such acts as illegal for 15 years. Furthermore, regarding the claim that the bill encourages illegal strikes, the amendment does not provide an exemption for clear illegal acts of dispute, such as violence or destruction.

   

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4. Conclusion: The Arduous Legislative Process and Future Outlook

   

After discussions began in 2014, the Yellow Envelope Law went through an arduous process, failing to pass the threshold of the National Assembly multiple times. It passed the plenary session of the 21st National Assembly led by the opposition party but was later discarded due to the President's exercise of veto power. However, the bill was re-proposed in the 22nd National Assembly, passed the plenary session once again on August 24, 2025, and is scheduled to be promulgated on September 9, 2025, and take effect on March 10, 2026.

   

Now, the debate over the Yellow Envelope Law is shifting from 'whether it will pass' to its 'practical application and effects.' With the law taking effect, the bargaining power of labor will be strengthened as subcontract unions will be able to negotiate directly with primary contractors. Companies will also move towards solving problems through consultation with unions, moving away from unilateral decision-making. However, there is also the possibility of new conflicts arising from ambiguous provisions such as 'substantial control.' It is a time to pay close attention to whether this bill can fundamentally question the rights of workers and the responsibilities of companies in Korean society and serve as an opportunity to find a new balance in labor-management relations.

   

        Key Summary:
        The Yellow Envelope Law is a bill born to improve unreasonable aspects of the labor field and strengthen workers' rights. With its main provisions of expanding the scope of employers, limiting damage liability, and expanding the scope of labor disputes, it is expected to bring about significant changes in labor-management relations in Korean society.    

   

       

The content of this blog is for reference in investment judgments only, and investment decisions should be made at the individual's own discretion and responsibility. Under no circumstances can the information on this blog be used as evidence for legal liability regarding investment outcomes.