[Editorial] Announcement of Yellow Envelope Act Interpretation Guidelines, Remaining Uncertainties Must Be Addressed

Interpretation guidelines for the Yellow Envelope Act (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act), which expand the rights of subcontracted workers against Main Contractors, were recently announced. The business community, which had previously expressed concerns about the potential side effects of the Yellow Envelope Act, noted that the issuance of concrete guidelines has somewhat reduced uncertainty. However, they argued that ambiguities remain regarding the 'structural control' exercised by Main Contractors over subcontracted workers, which is now specified as the standard for defining the scope of users.
In its guidelines, the Ministry of Employment and Labor (MOEL) presented specific concepts regarding the actual employer of subcontracted workers and the scope of collective bargaining. Examples recognized in recent court rulings were cited, including workforce management, working hours, work methods, occupational safety, and wages or allowances. The scope of collective bargaining on business management decisions was limited to cases involving layoffs or restructuring. Decisions such as factory expansion or relocation, overseas investment, mergers, acquisitions, or corporate splits do not require collective bargaining with workers.
The business community generally accepts that criteria have now been established for the scope of users among subcontractors and the targets of labor union industrial action. However, they still point to lingering uncertainties, such as the ambiguity in determining structural control by Main Contractors in cases of contract termination or occupational safety.
The Korea Enterprises Federation (KEF) stated, "To prevent confusion in the early stages of the amended labor union law’s implementation, examples and related details should be clarified in line with the criteria for determining users and the subjects of labor disputes as specified in the interpretation guidelines." Regarding the scope of users, it added, "The guidelines cite 'the possibility of terminating a subcontract or consignment contract in the event of non-compliance' as an example of structural control," and warned, "This could lead to misunderstandings that ordinary contract termination for non-fulfillment in subcontract agreements also constitutes structural control."
It was also pointed out that the examples for determining users in the area of occupational safety are overly broad, and that the use of the phrase 'objectively foreseeable cases' regarding the scope of collective bargaining and industrial action by labor unions introduces further ambiguity.
From the perspective of the business community, opposition to the Yellow Envelope Act has stemmed from concerns that expanding the user status of Main Contractors increases the burden on companies. While the intent of the law is, of course, to expand and protect workers’ rights, it is criticized for being excessively pro-labor and union-biased. The new interpretation guidelines do offer some relief to the business community by providing standards for defining the scope of users.
Nevertheless, despite these standards and examples, there remain issues that cannot be clearly resolved by the guidelines alone. Different interpretations of the wording may arise in the field, and if labor and management positions clash, disputes could intensify. It is worth noting that not only the business community but also labor groups have voiced dissatisfaction with the new guidelines.
The Yellow Envelope Act is set to take effect on March 10 next year. With about 70 days remaining, the government should further refine relevant regulations and strengthen guidance and publicity to prevent confusion from the outset. Since the law’s implementation is already confirmed, any side effects can only be monitored as it is enforced. If it is later determined that the law causes serious disruption to the national economy, the National Assembly of the Republic of Korea must step in to initiate amendments or supplementary measures. The problem is that once workers’ rights are expanded, it is difficult to retract them. Nevertheless, necessary actions must be taken.