The President Lee Jae-myung government has intensified its labor-friendly policies, as it has indicated its intent to follow through with the “five-year national administration plan.”
State policy tasks released by the Presidential Committee on Policy Planning on Aug. 13 include intensive pro-labor policies, such as the expanded application of labor-related acts to worksites with less than five employees, and a stipulation of equal remuneration for work of equal value.
The plan draft also includes a proposed revision of Article 2 and 3 of the Trade Union Act, dubbed as “Yellow Envelope Act.” Protecting unionists’ rights and easing of their unequal treatment are apparently important, but such moves are feared to send a shockwave through the industry ecosystem.
The ruling Democratic Party of Korea has been railroading the enactment of the Yellow Envelope Act through parliament.
A policy to expand the application of labor-related acts to worksites with fewer than five employees and reduced working hours is expected to come with a heavy cost for corporate manpower operation and expenses.
The proposed Yellow Envelope Act could pave the way for trade unions of subcontracted companies to hold collective bargaining sessions with counterparts of contract companies, and it has stipulations limiting claims for compensation caused by illegal strikes. Concerns are growing about an increasing frequency of labor unrest.
The reason is that Chairman Sohn Kyung-shik of Korea Enterprises Federation (KEF) sent a letter containing management’s misgivings to all 298 lawmakers of the National Assembly over the enactment of the Yellow Envelope Act.
Chairman Sohn warned that if the bill is approved by parliament, the frequent occurrence of trade disputes could disrupt the industrial ecosystem between subcontracted and contract companies.
Companies would find it hard to conduct businesses as usual amid a global competition since they have no protective means, such as the use of replacement workers and ban of worksite occupation and this is not a simply worry, but an urgent warning for the future of the Korean economy, he said.
The American Chamber of Commerce in Korea (AmCham Korea) and the European Chamber of Commerce in Korea (ECCK) have also expressed their opposition to the matter.
Despite the hard situation, the ruling party has indicated the parliamentary approval of the Yellow Envelope Act will proceed. Even when companies are under intensive pressures over the United States’ imposing of reciprocal tariffs, the enactment of the proposed bill could push the industry off a cliff.
The government and the National Assembly should not take inside and outside warnings lightly, some experts say, adding that they have to listen to Chmn. Sohn’s earnest appeal and should find a balance acceptable to labor and management.
KEF Chmn. Sohn Gives Speech at 113th ILO Conference
Chairman Sohn Kyung-shik of Korea Enterprises Federation (KEF), representing Korean employers and business, delivered a speech at the 113th International Labor Conference in Geneva, Switzerland, on June 19.
In his speech, Chairman Sohn pointed out that “growing global economic uncertainties and geopolitical tensions pose serious threats to sustainable growth and social integration,” while “rapid technological transformation and climate change are also challenges that we need to work together to solve as social partners.”
He added that “in order to build virtuous cycle from ‘growth’ to ‘job creation’, it is crucial to establish more flexible labor market and more cooperative relationship among social partners in line with industrial transformation and labor market changes.”
Chairman Sohn also emphasized, “the future of successful labor market depends on promoting diversity and autonomy. I therefore hope the ILO to respect each Member State’s national circumstances and diverse positions of all social partners in a balanced manner.”
Following his speech, Chairman Sohn met with ILO Director-General Gilbert Houngbo to exchange views on Korea’s labor market.
He also met with Roberto Suarez Santos, Secretary-General of the International Organization of Employers (IOE); Matthias Thorns, IOE Vice President to the ILO; and Tan Hee Teck, President of the Singapore National Employers Federation, during which they agreed to strengthen cooperation on global employment and labor issues.
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