Passage of the Yellow Envelope Law: A New Era in Korean Labor Relations, What Changes Are Coming?

The Yellow Envelope Act That Changed the Landscape of Korean Labor Relations: The Beginning of a New Era

On August 24, 2025, the National Assembly's main chamber was filled with tension. The 'Yellow Envelope Act' was passed with an overwhelming 183 votes out of 186 members present. Why did this bill attract so much attention? What kind of transformative changes will it bring to Korea’s labor market?

The Yellow Envelope Act is more than just a law; it marks a revolutionary turning point that fundamentally restructures Korea’s labor-management relations. At its core lies the ‘expansion of the scope of employers.’ Now, all entities exerting real influence over working conditions are recognized as ‘employers.’ What does this mean?

1. Workers subcontracted through outsourcing can negotiate directly with the primary contracting company.
2. Specially employed and platform workers gain the right to collective bargaining.
3. Workers’ right to strike is genuinely guaranteed.

The Yellow Envelope Act also protects workers from excessive damage claims. It carries forward the spirit of the ‘Yellow Envelope Campaign’ that emerged from the 2014 Ssangyong Motor crisis.

The bill’s passage followed fierce political disputes—intense partisan clashes, filibuster attempts, and last-minute compromises, all unfolding in dramatic fashion.

Moving forward, the Yellow Envelope Act will have a profound impact on Korea’s economy and labor market. As a new paradigm in labor relations opens, we stand at the heart of this transformation. It is time to closely witness the future the Yellow Envelope Act will bring—its hopes and its challenges alike.

Expanding Employer Scope and Limiting Damages Claims: Unveiling the Core of the Yellow Envelope Act

Subcontractor unions gaining the ability to negotiate with or even strike against primary contractors’ management? What lies behind this shocking transformation? Let’s dive deep into the key provisions of the Yellow Envelope Act.

Revolutionary Expansion of the Employer Definition

The most significant change introduced by the Yellow Envelope Act is the broadening of the concept of ‘employer.’ Previously, only those directly bound by the employment contract were recognized as employers. Now, it includes anyone in a position to substantially and specifically control or decide working conditions.

What does this mean?

1. Strengthening the rights of subcontracted workers: securing negotiation and collective action rights against primary contractors
2. Clarifying responsibility within complex employment structures: holding those with actual influence accountable
3. A new paradigm in labor relations: adopting a comprehensive approach beyond direct employment ties

Limiting Claims for Damages: A Real Guarantee of Strike Rights

Another crucial reform in the Yellow Envelope Act is its restriction on damage claims arising from strikes. This provision is designed to effectively safeguard workers’ right to strike, carrying the following implications:

1. Reducing workers’ burdens caused by excessive damage claims
2. Enhancing protection of lawful collective actions
3. Balancing power between labor and management

Improving Rights for Specially Employed and Platform Workers

The Yellow Envelope Act also grants new rights to specially employed and platform workers, who previously lacked collective bargaining rights. This marks a vital step in responding to the evolving labor environment.

1. Amplifying the voices of non-regular workers
2. Strengthening legal protections for diverse forms of labor
3. Enabling flexible legal responses to labor market changes

These core provisions of the Yellow Envelope Act are poised to bring significant transformation to Korea’s labor relations. The future challenge will lie in striking the right balance between protecting workers’ rights and ensuring corporate flexibility.

The Yellow Envelope Act: The Hidden Story Behind the Name

A 4.7 billion won damages ruling. Workers left powerless before this astronomical sum. And 1.5 billion won raised in donations for them. This dramatic event has today reemerged before us as the 'Yellow Envelope Act.'

In 2014, the 4.7 billion won damages awarded against workers who participated in the Ssangyong Motor strike pierced many hearts. In response, a citizen, holding onto a small hope, placed donations into a 'yellow envelope' and delivered it. This small gesture soon blossomed into the 'Yellow Envelope Campaign.'

But why yellow envelopes? The choice was inspired by the fact that wage envelopes for workers used to be yellow. This was not a mere color selection but a meaningful symbol representing the value and dignity of labor.

The 1.5 billion won raised through this campaign went beyond monetary support—it became an expression of social solidarity with workers. This movement ultimately led to the birth of the 'Yellow Envelope Act,' designed to protect workers' rights and curb excessive damages claims.

The Yellow Envelope Act is more than just a law’s name. It carries the sweat and tears of workers and the warm hearts of citizens who stand by them. This law stands as a crucial milestone showing how our society values labor and the path we must follow moving forward.

Fierce Parliamentary Battles and the Political Clash Surrounding the Yellow Envelope Act

Why did the People Power Party go so far as to call the Yellow Envelope Act the “Illegal Strike Promotion Act” and launch a filibuster? We reveal the behind-the-scenes drama of this heated political battle.

The passage of the Yellow Envelope Act was a battlefield of intense conflict between ruling and opposition parties. The People Power Party strongly opposed the bill, arguing that it would encourage illegal strikes and pose a serious threat to corporate management. Their concerns were as follows:

1. Expansion of Employer Scope: Recognizing even primary contractors as employers could lead to widespread chaos across industries due to reckless strikes by subcontractor unions.

2. Limiting Damage Claims: Restricting companies’ rightful claims for damages might promote illegal activities by unions.

3. Enhancement of Rights for Special Employment and Platform Workers: This could undermine labor market flexibility and increase the burden on businesses.

For these reasons, the People Power Party even resorted to the extreme measure of a filibuster to block the bill. However, the Democratic Party declared an end to the debate after 24 hours and pushed through a vote.

Up until the last moment, the People Power Party proposed a compromise: to maintain the current definition of employers and extend the law’s implementation grace period to one year. Yet, the Democratic Party refused this offer, and ultimately, the Yellow Envelope Act passed with overwhelming support.

The fierce partisan conflict revealed the fundamental differences in perspective on labor relations between both sides. The fierce debate over where to strike a balance between strengthening labor rights and fostering economic development is expected to continue.

While the passage of the Yellow Envelope Act played out like a political drama, its impact will soon materialize in the real economy and labor landscape. As we watch the changes this law will bring, we hope our society can move toward a better labor-management relationship.

The Path After the Yellow Envelope Act: Corporate Governance Reform in Large Corporations and Legal Controversies

Immediately following the passage of the Yellow Envelope Act, South Korea’s political landscape was swept into another turbulent wave. A more stringent amendment to the Commercial Act, the Yoon Suk-yeol administration’s possible veto, and the ruling People Power Party’s consideration of a constitutional review… A titanic clash between powerful forces over the future of Korea’s labor market has begun.

The Stronger Commercial Act Amendment: A Signal for Reforming Corporate Governance in Large Corporations

Riding the momentum from the Yellow Envelope Act’s passage, the Democratic Party proposed a “Stronger Commercial Act” amendment to the plenary session. The core points of this bill are:

1. Mandatory cumulative voting for companies with assets exceeding 2 trillion won
2. Expansion of separately elected audit committee members

This marks a fundamental attempt to overhaul large corporations’ governance structures. Alongside the Yellow Envelope Act, it represents a crucial piece of legislation that could bring profound changes to Korea’s economic system.

Government and Parliament Conflicts: Yoon Suk-yeol Administration’s Potential Use of Veto Power

However, the path ahead for this bill looks far from smooth. The Yoon Suk-yeol administration has previously exercised its right to request a reconsideration (veto) on similar bills, making it highly likely that the same response will be shown this time. This signals the onset of a new conflict between the executive and legislative branches.

People Power Party’s Backlash: Considering a Constitutional Challenge

With both the Yellow Envelope Act and the stronger Commercial Act amendment under pursuit, the People Power Party is fiercely pushing back. Criticizing the legislation as “system-changing,” they are even contemplating filing a constitutional challenge, indicating that legal disputes may drag on for the long term.

Outlook After the Yellow Envelope Act: An Era of Uncertainty

The Yellow Envelope Act is expected to bring significant shifts to Korea’s labor relations. If the corporate governance reform for large corporations is added to the mix, South Korea’s economy and labor market will enter a period of fundamental transformation.

Yet, whether these changes will proceed smoothly remains uncertain. Various variables remain, including clashes between the government and ruling party and the possibility of constitutional challenges. It will be essential to closely monitor the actual implementation of the Yellow Envelope Act and the fate of the subsequent bills moving forward.