“Yellow Envelope Act passes National Assembly…what does it include in detail”, 24 August 2025

The “Yellow Envelope Act” (amendments to Articles 2 and 3 of the Trade Union and Labour Relations Adjustment Act) passed the National Assembly’s plenary session on the 24th, led by the ruling Democratic Party of Korea.

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The Yellow Envelope Act was introduced to the plenary session on the previous day, the 23rd, but a filibuster (unlimited debate) began at the request of the People Power Party, which opposed the bill.

…At around 9:12 a.m. that day, the debate was concluded with a vote in favour by Democratic Party and allied lawmakers, and the bill was immediately put to a vote.

…The Yellow Envelope Act is one of the bills that had previously been scrapped after President Yoon Suk-yeol exercised his veto power. The core of the bill is to expand the scope of “employer” and the subject of labour disputes, and to limit companies’ claims for damages against striking workers.

…First, the amendment adds a new provision to the existing Article 2 defining “employer,” stating that “even if the person is not a party to the employment contract, a person who is in a position to substantially and specifically control or determine the working conditions of the worker shall be deemed an employer within that scope.”

The aim is to expand the existing definition of employer to guarantee labour rights by allowing indirectly employed workers, such as those in subcontracting arrangements, to engage in collective bargaining with the principal employers who “substantially exercise control over working conditions.”

…Also, the clause in the definition of “trade union” stating that “an organisation that allows non-workers to join shall not be recognised as a trade union” was deleted. This is intended to address the legal instability of trade unions composed of platform workers and others who are not currently classified as workers under the law. While maintaining the premise that the principal subjects of a trade union must be workers, the change seeks to ensure that “the autonomy and identity of a union are not denied solely because some non-workers are included.”

The definition of “labour dispute” was also partially revised (…) Accordingly, it is expected that restructuring, mass redundancies, and business mergers or closures will be included within the scope of labour disputes.

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…In relation to damage claims, several new provisions have been added to Article 3.

First, a clause has been newly inserted stating that “in cases where a trade union or worker has unavoidably caused damage to an employer in order to defend the interests of the trade union or worker against the employer’s unlawful acts, the trade union or worker shall not be liable for compensation.”

Another new clause states that “an employer shall not exercise the right to claim damages with the intent to threaten the existence of a trade union, obstruct its operation, or interfere with the union activities of its members and cause damage.”

A provision was also added concerning exemption from liability, stating that “an employer may exempt a trade union or worker from liability for compensation arising from collective bargaining, industrial action, or other union activities.” This aims to facilitate the smooth resolution of labour-management disputes. However, this clause is interpreted to mean that exemption from liability shall only apply in cases where it was unavoidable and there were no other means of response available in an emergency situation.

In cases where liability for damages caused by union activities is recognised for individual workers, a new provision has been added allowing for the allocation of responsibility according to specific conditions applicable to the workers concerned…

Meanwhile, the existing Article 3 had stated that “an employer shall not claim compensation for damage arising from collective bargaining or industrial action conducted in accordance with the law.” To this, “other activities of the trade union” has been added.

…The amended law will come into effect six months after its promulgation.