With the launch of the new administration in Korea, there is growing attention on whether the Yellow Envelope Act, which includes amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act (the “TULRAA”), will be reintroduced and advanced in the legislative process.
The Yellow Envelope Act is a legislative proposal that aims to: (i) expand the scope of “employee” and “worker eligible for union membership under the TULRAA,” (ii) expand the scope of “employer under the TULRAA,” (iii) widen the concept of “industrial disputes,” and (iv) limit or exempt unions from liability for damages resulting from industrial action. Although several versions of the bill have been introduced, it has not yet been enacted into law. Since this legislation could significantly reshape labor-management relations in Korea, it is important to closely monitor the legislative process and prepare for potential changes. In this two-part newsletter series, we will begin by discussing points (i) and (ii) above.
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1.
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The Yellow Envelope Act: Introduction and Key Issues
While it is difficult at this time to predict precisely which contents will ultimately be included in the Yellow Envelope Act, we can anticipate its likely direction by reviewing the bills currently proposed before the 22nd National Assembly. The main features of each bill are summarized in the table below:
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Issues
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The Expansion of the Scope of “Employee” Eligible for Union Membership
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The Expansion of the Scope of “Employer” Required to Engage in Collective Bargaining with Trade Unions
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Current Provisions
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A person who lives on wages, salary, or any other income equivalent thereto
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A business owner, a person responsible for the management of a business, or a person who acts on behalf of a business owner with regard to matters concerning workers in the business
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Proposed Bills (National Assembly members)
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Kim Tae-sun: Anyone who exercises substantial control over a worker’s duties, or who has significant influence over the worker’s working conditions and employment matters such as wages, benefits, or termination
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Park Hong-bae: Anyone who can substantially and specifically control or determine a worker’s working conditions
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Lee Yong-woo: Anyone who actually exercises or holds de facto influence or control over a worker’s working conditions, assigned tasks, or union activities; or a principal who assigns work to another business but has the work performed at the principal’s workplace
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Expansion of the Scope of “Employee” under the TULRAA
The Supreme Court has ruled that whether a person qualifies as an employee under the TULRAA should be determined based on the need to guarantee the three fundamental labor rights, rather than being limited by the definition of “employee” in the Labor Standards Act. As a result, many courts have allowed special-type workers and platform workers to form unions, engage in collective bargaining, and participate in industrial action, recognizing them as employees under the TULRAA.
In this context, if the proposed bills are enacted to presume employees either as “a person who personally provides labor for another’s business” or “a person who organizes or joins a trade union,” it will become even clearer that labor providers, such as special-type workers and platform workers, will be recognized as employees under the TULRAA, regardless of how the Supreme Court rules in pending cases.
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3.
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Expansion of the Scope of “Employer” under the TULRAA
Recently, the Seoul High Court ruled that subcontractor workers may negotiate directly with the contracting entity, specifying that the contracting entity qualifies as an employer under the TULRAA if it exercises “substantial control” over specific collective bargaining issues. The court held that, in such cases, the contracting entity is obligated to respond to collective bargaining requests from the subcontractor’s union. However, the Busan High Court reached a different conclusion in a similar case. As both cases are now pending before the Supreme Court, whether a contracting entity can be considered an employer under the TULRAA in relation to subcontractor workers will ultimately depend on the Supreme Court’s forthcoming decisions.
Against this backdrop, if the definition of an “employer” under the TULRAA is expanded to include “a person who can substantially and specifically control and determine working conditions,” a subcontractor’s union could request that a contracting entity participate in collective bargaining, regardless of how the Supreme Court rules on the current cases. This expansion could also give rise to new legal questions - for example, whether a contracting entity may replace striking subcontractor workers with its own employees or those of other subcontractors, or whether the contracting entity could hold the subcontractor liable for non-performance if a strike by subcontractor workers causes damage to the contracting entity.
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[Korean Version]
