[Editorial] On First Day of Yellow Envelope Act, Bargaining Demands Surge and Labor-Management Conflict Poised to Worsen

The so-called Yellow Envelope Act took effect on the 10th. The law expands the definition of employer to include parent companies and limits companies' claims for damages over losses caused by strikes. It also broadens the scope of labor disputes to cover layoffs and restructuring. As expected, on the very first day, subcontractor unions flooded parent companies with demands to start collective bargaining. Signs are emerging of a massive spring wage offensive unlike anything seen before.
On the same day, the KCTU immediately sent official bargaining requests to parent companies at workplaces affiliated with seven industrial unions, including the Korean Metal Workers' Union (KMWU). It also announced that it will mount campaigns to pressure parent companies that refuse to negotiate and, if they continue to reject talks, stage a general strike on July 15. Following KCTU guidelines, about 900 workplaces are expected to join the bargaining drive, involving roughly 137,000 union members. Cleaning and security workers, as well as parcel delivery workers, also demanded talks, shouting, "Let the real boss come out."
The government has appealed to labor groups for restraint and compromise, but labor has little reason to listen. At some workplaces, even cafeteria staff who are unrelated to the production process are demanding the same performance bonuses as employees of the parent company. Union members at subsidiaries whose operations are slated to be scaled back are insisting on employment succession at the parent firm. Demands are erupting that go far beyond what is written into the Yellow Envelope Act.
The Yellow Envelope Act was intended to improve the rights and interests of subcontracted and outsourced workers, yet union activity is already far more intense than anticipated. If this continues, workplaces will turn into large protest sites, and industry could be thrown into turmoil. The overall scale of strikes will grow to levels incomparable to past spring or summer labor offensives, and walkouts could become a daily occurrence nationwide.
It is simply impossible for employers to negotiate one by one with countless subcontractor unions. If they accept all these bargaining demands, the burden on parent companies will become unsustainable. The government could not have failed to foresee this reality. Many provisions remain vague, especially regarding who qualifies as an employer, and these ambiguities are bound to fuel conflict.
In the end, the Yellow Envelope Act may end up harming workers. Parent companies could resort to extreme responses. For example, they might terminate contracts with service providers that make excessive demands. The same applies to subcontractors. If they must meet the demands of subcontractor unions, wages and benefits for the parent company's own union members may have to be cut, creating ample room for conflict between different groups of workers.
Workers' rights must of course be protected, but if they become overwhelmingly stronger than employers' rights, it can dampen not only corporate activity but the entire economy. Industry repeatedly warned the authorities about these problems before the law took effect, precisely because such chaos was foreseeable from day one, yet those concerns were ignored.
The responsibility for managing the severe disruption that lies ahead rests with the current administration and ruling party that enacted the Yellow Envelope Act. Any ambiguous provisions must be clarified through legislative amendments. The government says it will use administrative measures to draw lines around which subcontractor unions can bargain with parent companies, but such efforts inevitably have limits. Under the current circumstances, the potential problems triggered by the Yellow Envelope Act are countless. The law needs to be reviewed again.
Workers should refrain from striking as much as possible, and employers should first try to resolve issues through dialogue. Companies in sectors enjoying strong business conditions can, in the spirit of mutual growth, commit to better treatment and job security. The real challenge lies with firms where a win-win outcome is difficult. Whatever happens, labor and management must avoid mutual destruction. Both sides need to make concessions and work together to overcome the friction and conflict that inevitably arise in the early stages of implementing this law.