[Editorial] Government Issues Yellow Envelope Act Guidelines; Binding Legislation Should Also Be Considered

The government issued implementation guidelines on the 3rd to resolve controversy over the scope of labor disputes under the Yellow Envelope Act, or the revised Trade Union and Labor Relations Adjustment Act. Since the law took effect in March, conflicts over the subjects of labor disputes have continued at industrial sites across the country. The government drew on six months of trial and error following the law’s implementation to set out more specific criteria.
The guidelines contain two key points. First, demands for so-called ‘n% performance-based pay’ linked to corporate earnings, such as sales, operating profit, and net income, are difficult to regard as mandatory bargaining and dispute subjects under the Trade Union and Labor Relations Adjustment Act. Second, business management decisions—including building or selling a plant and introducing new technologies—may become subjects of labor disputes only when changes in working conditions can be objectively expected. A mere possibility is not enough.
It remains unclear whether the guidelines will resolve the confusion surrounding the Yellow Envelope Act. President Lee Jae Myung had instructed the government twice to establish criteria through administrative legislation, such as an enforcement decree. However, the Ministry of Employment and Labor chose guidelines rather than an enforcement decree, citing the legislative framework, legal stability, and effectiveness in workplace application. Critics could argue that restricting the scope of labor disputes through an enforcement decree, in the absence of an explicit delegation clause in the Trade Union and Labor Relations Adjustment Act, would constitute executive overreach and be unconstitutional. Unlike an enforcement decree, which requires a complicated procedure, guidelines can be applied in the field immediately after being announced.
The problem is that all of the government’s concerns appear to center on administrative convenience. There is reason to suspect that it is rushing to force together a formal solution while setting aside the problems with the law and the limitations of the guidelines. Accordingly, we believe it will be difficult to fundamentally resolve labor-management conflicts through these guidelines alone.
Both labor and business groups have responded coolly to the guidelines. Labor argues that narrowing the scope of labor disputes through guidelines rather than an enforcement decree itself weakens the three basic labor rights guaranteed by the Constitution. Business groups, meanwhile, are calling for supplementary legislation, saying the guidelines lack legal binding force and therefore have limited effectiveness. Companies, too, would be uneasy making management decisions based only on guidelines that may struggle to gain normative force in litigation. This is why the implementation guidelines are being criticized as a stopgap or patchwork measure.
Apparently mindful of these concerns, the government also announced that if a union refuses to withdraw demands that fall outside the guidelines’ criteria, the Labor Relations Commission will not grant ‘suspension of mediation,’ a prerequisite for exercising the legal right to strike. It plans to conclude the matter through administrative guidance equivalent to a court’s dismissal without consideration of the merits. Without suspension of mediation, the path to a legal strike itself is blocked, so this is by no means a powerless measure. However, determining whether a business management decision affects working conditions is ultimately a matter of legal interpretation, and the courts have final authority.
It is questionable whether this stopgap measure, welcomed by neither labor nor management, will actually be effective. Much of the current confusion stems from the fact that the first step was wrong from the outset. When amending the Yellow Envelope Act, the National Assembly of the Republic of Korea included only the broad and ambiguous phrase ‘business management decisions that affect working conditions’ in the law, without establishing a delegation clause or an enforcement-decree basis to define its scope more specifically.
As a result, it had long been anticipated that the ambiguity of the law would trigger significant repercussions. Although greater-than-expected confusion has emerged since its implementation, the current guidelines appear insufficient to solve the problem. For now, it remains to be seen whether the government’s administrative guidelines will work properly in actual workplaces. The government should first use administrative guidelines to reduce confusion in the field while keeping the door open to supplementary legislation in the long term.