Possibility of Passing the Yellow Envelope Act by Late July or Early August... Labor Unions Predict Strong Summer Strikes

[Financial News] The Yellow Envelope Act (amendment of Articles 2 and 3 of the Labor Union Act), which directly tightens restrictions on companies, is expected to be processed within the July extraordinary session of the National Assembly. This is due to the strong will of the Democratic Party of Korea, which holds a majority of seats.
The Yellow Envelope Act initially faced calls for moderation even within the Democratic Party. With the ruling and opposition parties having agreed to process the amendment to the Commercial Act and the common pledge legislation negotiations becoming more active, there was a suggestion not to push through the Yellow Envelope Act, which is vehemently opposed by the opposition and the business community. However, the recent push to process it within the July National Assembly is attributed to President Lee Jae-myung and the labor community.
President Lee discussed the bills to be prioritized with the Democratic Party's floor leadership and the chairpersons and secretaries of the National Assembly's standing committees at a dinner on the 7th, and the Yellow Envelope Act was reportedly mentioned as one of them. As it is a presidential pledge of President Lee, it is said that he repeatedly urged its swift processing.
The influence of the labor community also seems to have played a role. The Korean Confederation of Trade Unions has announced an unprecedented 'summer struggle' and is demanding the swift processing of the Yellow Envelope Act not only from the Democratic Party but also from the National Planning Committee, which is akin to the Presidential Transition Committee of the Lee Jae-myung administration. For the Democratic Party and the Lee Jae-myung administration, it is difficult to reject the pressure from the labor community, which is a major support base.
The Democratic Party emphasizes that the core of the Yellow Envelope Act, such as limiting damage claims against striking workers and granting negotiation rights to subcontractor unions against primary contractors, are issues that the Supreme Court has already ruled on. Since it is already being applied to labor-management relations, implementing the Yellow Envelope Act will not cause immediate significant changes.
As political discussions accelerate, the labor community's 'summer struggle' is also becoming more active. Companies are unable to hide their anxiety about potential production disruptions amid unstable external conditions.
The Korea Shipbuilding Workers' Union, a coalition of major shipbuilding company unions, has announced a general strike for next week. If management does not present a negotiation proposal by the 17th, they plan to start a general strike from the 18th. According to the Korea Shipbuilding Workers' Union, five workplaces (Hanwha Ocean, Hyundai Heavy Industries, Hyundai Mipo Dockyard, Hyundai Samho Heavy Industries, and K Shipbuilding) have already secured the right to strike with a high approval rate of 94.7% in the strike vote.
Tensions are also rising in the automotive industry, which has been hit directly by U.S. tariffs. The Korea GM union failed to narrow differences with management even after the 12th negotiation on the 9th, and launched a partial strike for two hours on the 10th and 11th. In addition, they plan to refuse overtime until the conclusion of this year's wage and collective bargaining agreement and hold a four-hour strike and resolution meeting on the 14th to urge management to negotiate.
For Korea GM, in addition to the burden of deteriorating profitability due to high U.S. tariffs, it now faces the burden of labor-management conflict. Korea GM sold a total of 249,355 units in the first half of this year, of which 241,234 units, or 96.7%, were for overseas sales. Nearly 90% of these overseas sales were destined for the U.S., putting them directly in the impact zone of U.S. import car tariffs.
The Renault Korea union also recently conducted a strike vote, securing 80.3% approval from all union members, and is now on the verge of securing the legal right to strike. The Hyundai Motor and Kia unions are demanding the largest wage increase ever, along with the extension of the retirement age and the introduction of a 4.5-day workweek, at the negotiation table. 
An industry official said, "As the Lee Jae-myung administration is empowering the labor community, there is growing anxiety that this year's negotiations could be prolonged." 
uknow@fnnews.com Kim Yun-ho, Jeong Won-il Reporter