'Separation of Bargaining Units' in Yellow Envelope Act May Lead to 'Flood of Lawsuits,' Legal Community Warns

[Financial News] As the government has announced a draft enforcement decree for the Yellow Envelope Act, which centers on the separation of bargaining channels, concerns are being raised not only by the business community and the labor sector but also by the legal community. There are predictions that if negotiations stall during the bargaining process, a flood of lawsuits could ensue, potentially harming both companies and workers.
According to the government and the legal community on the 26th, the main point of the enforcement decree for the Yellow Envelope Act, which the Ministry of Employment and Labor (MOEL) has announced for public comment until January 5 next year, is the separation of bargaining units.
The revision allows for the separation of bargaining units not only in exceptional cases but also based on specific reasons such as the nature and content of work, working methods, and the intentions of the parties involved. This opens the possibility that a primary contractor may have to negotiate separately with each of its first- to third-tier subcontractors.
Immediately after the draft was announced, both the business community and the labor sector expressed their opposition. The business community voiced concerns that there could be an excessive proliferation of bargaining channels, while the labor sector worried that if it becomes difficult to unify the channels, the voices of minority unions may not be reflected.
The legal community pointed out that if the demands of companies and each union become scattered, legal disputes and conflicts could escalate. They noted that this would result in companies wasting significant time and resources, while unions could face stalled negotiations, making it increasingly difficult to reach agreements.
One labor law attorney explained, "When a bargaining unit applies for separation and the Labor Relations Commission approves it, the outcome will depend on how the company responds. If the company maintains that it does not have substantial control and waits for a final court ruling, negotiations themselves could be significantly prolonged."
Another labor law attorney predicted, "Ultimately, the parties will have no choice but to seek judgments from the Labor Relations Commission and the courts," adding, "A flood of lawsuits, as feared by the business community, will be inevitable in the early stages of implementation."
theknight@fnnews.com Jung Kyung-soo Reporter