29-07-2025
European chamber raises alarm over Korea's 'Yellow Envelope' bill
The European Chamber of Commerce in Korea is urging a revision of the proposed 'Yellow Envelope Law,' warning that its implementation could prompt foreign companies to withdraw from the Korean market.
According to the National Assembly on Tuesday, the bill, which would revise Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act, passed the Environment and Labor Committee's plenary session Monday.
The Democratic Party-led proposal was twice vetoed under former President Yoon Suk Yeol, but is being revived under the new DP-led administration.
A key provision in the amendment expands the definition of 'employer' to include any entity that 'substantially and specifically controls and determines working conditions,' even if it is not a signatory to an employment contract. The intention is to cover subcontracted laborers on a company's worksite.
The ECCK stated that this expanded definition of 'employer' broadens the scope of legal liability, thereby undermining the principle of legal certainty.
'Given the numerous criminal sanctions imposed on employers under the Trade Union Act, this vague and expanded definition may treat business operators as potential criminals and significantly discourage business activity,' the chamber said in a statement Monday. 'The impact is particularly severe for foreign-invested companies, which are highly sensitive to legal risks stemming from labor regulations.'
The ECCK also warned of increased conflicts between primary contractors and subcontractors, a rise in strikes by subcontracted workers, and destabilization of the subcontracting ecosystem. It added that the law could shift labor culture from dialogue to confrontation.
Citing these potential risks, the ECCK, which represents around 400 European companies with Korean subsidiaries, is calling for a revision of the amended law.
