[Editorial] The Yellow Envelope Act Must Not Hinder the Relocation of Public Institutions

[Financial News] On the 3rd, the Ministry of Employment and Labor (MOEL) issued enforcement guidelines for the "Yellow Envelope Act" (amended Trade Union and Labor Relations Adjustment Act) in response to the Samsung Electronics labor union's demand for negotiations regarding the establishment of a new semiconductor plant in the Honam region. The guidelines state that managerial decisions, such as the establishment or relocation of factories, are not subject to mandatory negotiation. However, recent responses to parliamentary inquiries have interpreted changes in working conditions resulting from such actions as subject to negotiation, raising concerns that the Yellow Envelope Act could become an obstacle to the government's second phase of public institution relocation. In effect, the guidelines created by MOEL are hindering government policy.
Kim Wi-sang of the People Power Party recently submitted a written inquiry to MOEL asking whether the relocation of public institutions to provincial areas, which necessarily entails personnel reallocation, is subject to negotiation or strikes. MOEL responded to the effect that "negotiations may be demanded when changes in working conditions are objectively anticipated." Subsequently, in an explanatory document on the 10th, MOEL stated that "the decision to relocate public institutions to provincial areas itself does not constitute a subject for negotiation," but explained that "if changes in working conditions are objectively anticipated, such as when personnel management plans including reallocation are being established or finalized, the relevant matter becomes a subject for negotiation." Despite the premise that "management decisions themselves do not become negotiation agendas," this effectively means that the relocation of public institutions has been included within the scope of labor-management negotiations.
The government previously announced that it would finalize relocation plans for approximately 350 public institutions in the Capital Metropolitan Area in the fourth quarter of this year, in accordance with the principle of "minimizing retention in the capital area," and proceed with the relocation starting next year. However, as the possibility of relocating state-owned banks such as the Korea Development Bank (KDB), the Export–Import Bank of Korea (Korea Eximbank), and the Industrial Bank of Korea (IBK) is being raised, there is strong opposition, including the Korean Federation of Financial Industry Workers' Unions launching a general strike. If the labor sector resorts to strikes opposing reassignment based on the "Yellow Envelope Act," the second phase of the public institution relocation plan will face setbacks.
MOEL issued these guidelines after the Samsung Electronics labor union publicly declared that it would make the plan to build a semiconductor fab in the Honam region a bargaining agenda item for next year. The guidelines clarified that the employer's managerial decisions, such as the establishment or relocation of factories, are not subject to mandatory bargaining in themselves. However, they stated that if changes in working conditions resulting from the establishment or relocation of a factory are objectively foreseeable, they can become subjects of bargaining and industrial disputes. This means that job reassignments, changes in work patterns, and support for allowances, commuting expenses, and relocation costs resulting from the relocation of the workplace can be subject to bargaining.
The business community argues that confusion on the ground persists despite the new guidelines. They point out that the reallocation of skilled personnel is inevitable for high-tech industries such as semiconductors and Artificial Intelligence (AI) to operate new facilities, and that prolonged negotiations regarding personnel transfers could disrupt investment schedules and the start of production. There are even concerns that the guidelines could have the counterproductive effect of empowering labor unions in their struggle to block relocation. Furthermore, as unions may demand various forms of support—such as maintaining commuter buses, housing assistance, and compensation for allowances—during negotiations, social costs could snowball.
MOEL's explanation that reaching a reasonable compromise through dialogue and cooperation is the best approach is correct in principle. However, it is difficult to prevent confusion if the matter is left to the autonomy of labor and management without clearly defining the scope of negotiations. Although MOEL explains that it can respond through administrative guidance if unions make unreasonable demands for negotiation beyond the scope of the guidelines, guidelines that lack legal binding force have limitations. It is urgent to secure legal stability, such as by amending the Trade Union and Labor Relations Adjustment Act or including clear standards in the enforcement decree.