Pushed by the opposition party, the National Assembly has passed the Yellow Envelope Bill. The spotlight is now on whether the president will exercise his veto right.


On September 9th, the National Assembly passed the “Yellow Envelope Bill,” which is designed to limit companies from abusing their right to claim damages for strikes. Pushed by the opposition party, the bill was welcomed by labor circles when it was passed, but President Yoon has preannounced his intention to veto, casting uncertainty on the final enactment of the bill into law.

The Yellow Envelope Bill can be traced back to the yellow donation envelopes used by citizens to collect donations and give to the trade union of SsangYong Motors. In 2014, the court ruled that the trade union of SsangYong Motors, which had staged strikes after the company’s large-scale layoffs in 2009, needed to compensate the company with KRW 4.7 billion. In response, civil organizations collected donations and presented them in yellow envelopes to support the trade union. Discussions on the legislation of the Yellow Envelope Bill were sparked last year when Daewoo Shipbuilding & Marine Engineering filed a compensation lawsuit against five workers, including the union leaders who led the subcontracted workers’ strikes. The lawsuit sought approximately KRW 47 billion.

The primary focus of the bill is to broaden the scope of employers engaged in bargaining with trade unions. Previously, trade unions were limited to bargaining with the direct parties to the employment contract. This bill allows subcontracted trade unions to bargain directly with the contractor by expanding the definition of an employer to include “individuals who are capable of exercising substantial control or influence over working conditions.”

This bill also broadens the scope of what is considered a strike. Previously, unfair labor practices by employers or non-compliance with collective agreements were not recognized as legitimate reasons for strikes. However, the Yellow Envelope Bill expands the scope of strikes to encompass disputes over rights, such as working conditions.

Moreover, the Bill prescribes that even in cases where the court recognizes the trade union’s liability for damages caused by the strike, the court shall individually determine the scope of responsibility depending on the attributed reasons and the extent of contribution. Unlike the current practice, where all individuals who participated in the strike bore collective responsibility, after the enactment of this Bill, these responsibilities will be calculated individually depending on how much they were involved in the strike. The Bill also relieves guarantors from compensation liabilities. 

Labor circles welcomed the passage of the Yellow Envelope Bill. The Federation of Korean Trade Unions announced, “The long-awaited amendment bill to the trade union law has finally passed the Assembly’s plenary session.” The federation added, “We expect that the bill will reduce unnecessary direct actions and conflicts between workers and companies, as actual employers are now brought to the negotiation table.” The Korean Confederation of Trade Unions also commented, “The current trade union law has been misused as a mean to impede the three rights of workers, contrary to its original purpose. Today’s passage of the amendment marks a significant step forward rectifying this situation.” They concluded, “We will fight to the end to protect the trade union law.”

On the other hand, six economic organizations, including the Korea Enterprise Federation, the Korea Chamber of Commerce and Industry, the Korea International Trade Association, the Federation of Korean industries, Korea Federation of SMEs, and the Federation of Middle Market Enterprises of Korea, have voiced criticism, asserting that “the amendment bill is an unjust law that justifies indiscriminate direct actions against contractors and excessively protects trade union engaged in illegal activities.” They issued a warning, stating, “If this bill is enacted, many companies may relocate their business to other countries, and the resulting damage will ultimately be borne by the workers.”

The approval in the plenary session of the National Assembly does not guarantee the enactment of the bill, as there remains the presidential veto of President Yoon. According to Article 53 of the Constitution, the president has the authority to return a bill to the National Assembly, the legislative body, with an explanation of the objections. The Office of the President has expressed objection to the bill’s legislation, emphasizing the need for deeper contemplation.

Labor Minister Jung Sik LEE also subtly expressed a wish to have the bill vetoed in a briefing shortly after the passage of the bill, stating, “It is hard not to have heavy heart as the minister in charge of labor policy.” He added, “If the bill is transferred to the government, I will fulfill my responsibilities as stipulated in the Constitution.”

As the first-ever Korean law firm to issue specialized legislative journals, DR & AJU LLC has been publishing the monthly Policy & Business Report since August 2019. The November 2023 issue of the P&B Report conducted a full inspection of legislation proposed to the National Assembly Subcommittee, Standing Committee, and Plenary Session from October 15, 2023, to November 14, 2023, and selected and analyzed legislation with a significant impact on corporate activities. In the case of major legislation, key mentions of legislators, members of the Standing Committee, and government officials are included.