Latest news with #LaborUnionAct
Korea Herald
7 days ago
- Business
- Korea Herald
AmCham, Labor Ministry to form joint task force for industry consultation
Labor Minister Kim Young-hoon pledged to set up a joint task force with the American Chamber of Commerce in Korea to maintain dialogue and reflect industry views in policymaking, during a closed-door roundtable Thursday. Held at AmCham's Seoul office, the meeting gathered senior executives from major US and global companies to discuss labor policy priorities and concerns over legislation that could tighten corporate liabilities in labor disputes. Talks centered on aligning Korea's labor rules with global standards by boosting market flexibility, reducing regulatory uncertainty, strengthening workplace safety and ensuring predictable enforcement, according to the US business group. One of topic dealt in the event was the 'Yellow Envelope' bill — an amendment to the Trade Union and Labor Relations Adjustment Act that would expand protections to all employment types and curb companies' ability to claim damages from unions over strike-related losses. The ruling party plans to put the bill to a plenary vote on Aug. 21, despite strong opposition from business groups. AmCham Chair and CEO James Kim warned the measure could erode flexibility, noting Korea hosts fewer than 100 regional headquarters, compared with Singapore's 5,000. 'Two key reforms, labor flexibility and CEO risk, are essential to improving competitiveness,' he said, urging lawmakers to 'take sufficient time to reflect industry input' ahead of Korea hosting the Asia-Pacific Economic Cooperation in the fall. The labor minister said he understood corporate concerns over the planned changes to Articles 2 and 3 of the Labor Union Act and vowed continued engagement before the law takes effect. "To help address these concerns and prevent misunderstandings, we will establish a dedicated task force with AmCham and other industry representatives to ensure continuous dialogue and incorporate industry input into policy discussions," he said. Over the next six months, the government will work with labor and management to reduce uncertainties, the minister said, adding it will issue detailed guidelines to help contractors and subcontractors strengthen partnerships, settle disputes and achieve 'sustainable growth through cooperation and mutual benefit.'
Korea Herald
03-08-2025
- Politics
- Korea Herald
Filibuster anticipated as DP floats 'Yellow Envelope Law'
Ruling party aims to table pro-labor bill in the plenary session Monday The ruling Democratic Party of Korea on Sunday reaffirmed its intention to unilaterally push forward a pro-labor bill — dubbed the 'Yellow Envelope Law' — through a plenary session scheduled for Monday, with the People Power Party vowing to launch a filibuster to block its passage. Labeling the bill — which would revise Articles 2 and 3 of the Labor Union Act — 'corporate-killing legislation,' the People Power Party has announced plans to delay its passage for 24 hours through an unlimited debate during Monday's plenary session. The opposition party also said that if they cannot negotiate as a minority party, they will filibuster. If a filibuster does take place, it will be the first one to take place in a plenary session in over a year. However, even if the party attempts to block the passage of the bill through a filibuster, the Democratic Party, which holds a majority of seats in the National Assembly, can end the debate 24 hours after it starts and begin voting on the bill. A senior People Power Party official, as quoted by Yonhap News Agency, acknowledged the limited impact of the tactics but stressed its importance in raising public awareness. 'We know filibusters may not change outcomes, but as a minority party, we must exhaust every measure to expose the problems presented by this bill,' the official was quoted. However, Rep. Huh Young of the Democratic Party said during a press briefing on Sunday that the party would make it a priority to pass the controversial bill. 'As members of the floor leadership, we are determined to see this bill passed during the plenary session,' said Huh. 'This legislation is aimed at breaking the vicious cycle of conflict and evasion of responsibility in labor relations by clearly defining the actual employer in subcontracting structures.' One key feature of this bill is that it broadens the legal definition of the term 'employer.' Under the amendments, any entity that 'substantially and specifically controls and determines working conditions' would be considered an employer and not just those who employ workers directly. 'The bill will help clarify the responsibility structure between original contractors and subcontractors and lead to more realistic and orderly negotiations,' Huh added. 'It's expected to reduce conflict and pave the way for more constructive labor relations.' Another important feature of the bill is that it also expands on the definition of what constitutes a 'legitimate labor dispute.' While labor disputes are legally limited to disagreements on 'working conditions,' the proposed revision would broaden this to include 'business management decisions that affect working conditions," meaning unions could legally strike not only over layoffs but also over choices made by management such as investment plans. Adding that the Yellow Envelope Law 'reflects international standards,' Huh reiterated the importance of the bill in being passed. 'This bill reflects international standards, including ILO recommendations, EU trade requirements and precedents from South Korea's own Supreme Court,' Huh said. 'Ensuring labor rights is now recognized globally as the foundation of a stable and sustainable investment environment.' Other than the Yellow Envelope Law, the Democratic Party also announced that it will work to push forward three broadcasting reform bills — which aim to make public broadcasters more independent from political influence — as well as an amendment to the Commercial Act that expands the fiduciary duty of board members to protect the interests of minority shareholders.
Korea Herald
30-07-2025
- Business
- Korea Herald
Lee vows to ease excessive penalties on corporate activities
President Lee Jae Myung pledged Wednesday to launch a government task force to explore ways to ease excessive penalties on corporate activities in a bid to help reduce regulatory hurdles and boost investment. Lee outlined a series of measures for what he described as a "pragmatic, market-oriented" government, including easing outdated regulations and limiting excessive penalties, while encouraging companies to enhance shareholder value. "It is time we should address concerns that breach of trust charges are being overly applied in ways that hinder business activity," he said. "To ensure that corporate management activities are not stifled by excessive economic punishments, the government will immediately launch a task force to rationalize such measures." Acknowledging growing concerns among business leaders over the risk of criminal punishment, Lee said the government will pursue legislative and regulatory reforms during the upcoming regular session of the National Assembly. To foster new engines of growth, he also called for the swift creation of a 100 trillion-won ($72.4 billion) public-private fund to invest in cutting-edge industries, including artificial intelligence and renewable energy. He also emphasized the importance of balanced regional growth, noting the negative effects of the concentration of investment and resources in the Seoul metropolitan area. His remarks came as South Korean companies are facing growing pressure to strengthen corporate governance following the recent enactment of the Commercial Act, which expands the fiduciary duties of corporate board members to all shareholders. The Lee administration is also pushing to pass the Labor Union Act, commonly known as the "yellow envelope law," aimed at broadening labor protections and restricting companies from seeking damages for legitimate union activities. The bill, previously vetoed by former President Yoon Suk Yeol, has reemerged as a key policy initiative under the Lee government. Adding to corporate concerns, the government plans to raise the top corporate tax rate back to 25 percent from 24 percent amid heightened trade uncertainty fueled by US President Donald Trump's aggressive tariff policy. (Yonhap)
Korea Herald
21-07-2025
- Business
- Korea Herald
[Editorial] Corporate anxiety
DP pushing 'Yellow Envelope Law'; Corporate tax rates to be raised back Korean companies are concerned that the Lee Jae Myung administration and the ruling Democratic Party of Korea are stepping up legislation that could add to their burdens, following the revision of the Commercial Act. The revised Commercial Act proposed by the party passed the National Assembly on July 3. The revision expands the fiduciary duty of corporate board members to serve the interests not only of their companies but of shareholders as well. Business circles worry that the change could make directors avoid long-term investments because of shareholder objections. Last Friday, Democratic Party lawmakers presented a bill to revise the Labor Union Act — a proposal known as the "Yellow Envelope Law" — to the National Assembly's Environment and Labor Committee, then proceeded to forward it to the subcommittee for deliberation. The party, which has a large majority in parliament, vowed to get the bill passed in an extraordinary session of the Assembly next month. Article 2 of the Labor Union Act revision would require primary contractors to bargain collectively with the employees of subcontractors. Article 3 makes it practically impossible for companies to claim damages from workers taking industrial action. If hundreds or thousands of subcontractor employees were to demand collective bargaining, subcontractors and the large companies that outsource work to them could be mired in incessant labor disputes. The article limiting damage claims against workers could encourage more industrial action. For these reasons, former President Yoon Suk Yeol vetoed the bill twice. The deepening anxiety of companies is understandable. Koo Yun-cheol, the nominee for deputy prime minister and minister of economy and finance, mentioned the decline in corporate tax revenue during his confirmation hearing at the National Assembly last Thursday. He said he would consider restoring the higher corporate tax rates that the Yoon administration lowered. The Moon Jae-in government raised corporate tax rates to a range of 10-25 percent, then the Yoon administration eased them by 1 percentage point to 9-24 percent. Koo blamed the tax cuts for a decrease in corporate tax revenue. He argued that the tax reductions failed to have the desired effects, such as increased investment and economic growth. Corporate tax revenue decreased from 103 trillion won ($74 billion) in 2022 to 80 trillion won in 2023 and 62 trillion won in 2024. Koo is mistaken. Corporate tax revenue did not shrink by 41 trillion won in two years because of tax rate reductions. The biggest factor was the deterioration of business performance, affected by an export slowdown and a semiconductor slump. Unless the economy improves, raising corporate tax rates will not guarantee an increase in tax revenue. Rather, it could reduce tax revenue by dampening corporate investment. If corporate tax revenue diminished because of a weaker economy, common sense says to help businesses attain better results by lowering tax rates. However, Koo says he would do the opposite. The US and European countries offer tax incentives to foster their strategic industries and attract foreign investments. It is questionable whether revising the tax code to increase tax collection can enhance companies' international competitiveness. In his meeting with Korean business leaders last month, President Lee promised to fully support their business activities. Last week, he had separate dinners with Hyundai Motor Group Executive Chairman Chung Eui-sun and LG Chairman Koo Kwang-mo to discuss trade issues. Lee emphasized cooperation between the government and their businesses. But the bill to amend the Labor Union Act is far from a show of support for companies. Lee's economic policy seems to be deviating from the pragmatism that he vowed to champion. If revising the Labor Union Act is inevitable, lawmakers may as well hold further discussions about whether to make it mandatory for primary contractors to bargain collectively with subcontractor employees.
Korea Herald
16-07-2025
- Politics
- Korea Herald
Umbrella labor group set to begin large-scale strike
The Korean Confederation of Trade Unions, one of the nation's largest umbrella labor groups, was set to launch a large-scale strike to demand the government adopt a pro-labor act. As part of the two-day strike, scheduled for Wednesday and Saturday, the 1.2 million-strong KCTU will hold a rally at 3 p.m. in Yeouido, western Seoul, and simultaneously stage rallies in 12 other regions. The KCTU estimated that around 10,000 members will take part in Seoul, with a total of 30,000 expected nationwide. Another large-scale rally and march is planned for Saturday in central Seoul. "This is our determined action to guarantee fundamental labor rights for all workers and resolve social inequality," the KCTU said, urging the Lee Jae Myung government to withdraw what it described as anti-labor policies of the previous Yoon Suk Yeol administration. The union is demanding revisions to Articles 2 and 3 of the Labor Union Act, also known as the "yellow envelope law," aimed at limiting companies from making claims for damages against legitimate labor union disputes. The legislation passed the National Assembly twice but was vetoed by Yoon amid opposition from business lobbies and the People Power Party. They argued that the bill would make it difficult for employers to file complaints against illegal strikes by their workers and exempt laborers from liability for participating in them. The KCTU also called for substantial labor reforms to protect the labor rights of platform and special-contract workers and to address deepening inequality. (Yonhap)
