Korea
Yellow Envelope Act – Amendments to the Trade Union and Labor Relations Adjustment Act
Impact date: Passed 24 August 2025, effective date six months later in February 2026 The National Assembly passed amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act (commonly referred to as the “Yellow Envelope Act” or the Labor Union Act), which are now pending promulgation and enforcement. The Yellow Envelope Act derives its name from the 2014 incident involving the SsangYong Motor strike, when citizens delivered condolences and support funds to workers in yellow envelopes in response to large-scale damage claims brought by the employer. The amendments substantially expand the definition of “employer,” significantly strengthen the autonomy of trade unions and the scope of lawful union activities, and impose broad restrictions on employers’ ability to claim damages against employees and unions.
Employer implications/action needed South Korea's Trade Union and Labor Relations Adjustment Act was revised this year to significantly alter labor-management relations in ways that more directly bolster workers' capacity to organize on their own terms and limit damage liabilities.
Notable changes include a broader definition of "employer," the strengthening of union autonomy, and restraints on employer remedies for damages against unions and employees. In particular, the broader definition of "employer," which is expanded to include entities with power over workplace conditions although they may not have direct filing of an employment contract, will allow a principal contractor or parent corporation, for example, to be compelled to negotiate a collective bargaining agreement on behalf of workers indirectly employed (by a subcontractor or delivery platform) with long-standing ties to the principal contractor or parent corporation.
As well, by eliminating restrictions on non-employees joining unions, the amendments will permit special employment workers and platform workers to join unions, potentially altering dynamics in crucial industries reliant on these workers' contributions to the economy. The amendments expand the scope of "labor disputes" to include decisions related to "business management and management decisions that directly influence the working conditions of workers", as well as any breaches of certain major clauses in a collective agreement which may expand the use of allowable industrial actions. Employers are further limited in their damages claims against labor unions and/or individual members for harm suffered due to unlawful union activities, as the courts will be required to consider the particular role employees (members) played in bringing about the damage and the economic circumstances of the workplace as part of apportioning fault. In addition, the amendments create a new limitation that permits employers to free unions from liability by providing remedies for disputes between them.
These changes as statutory law will take effect six months following promulgation, and will necessitate active measures in corporate strategies in the interim period to tackle existing workplace management matters, including updating the terms of their subcontracting or contracting arrangements or practices, moving to change their process for their internal compliance procedure related to damages claims, and rebuilding their dialogue with workers to prevent further disruptions to labor relations.
Employer risk See above.
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