Yellow Envelope Act
노란봉투법
The common name for South Korea's amended Trade Union and Labour Relations Adjustment Act, promulgated on September 12, 2025, and effective from March 13, 2026. It institutionalizes collective bargaining rights for subcontracted and dependent self-employed workers by recognizing the substantive controlling power of prime contractors as employer status, and limits the abuse of corporate damages suits by individualizing the legal liability of union members for industrial action. Its name originates from a solidarity campaign sparked by the 2014 SsangYong Motor strike ruling: after a court ordered workers to pay 4.7 billion won in damages, a citizen sent 470,000 won in a yellow pay envelope with the message 'I wanted to contribute even 47,000 won.'
In depth
Background
Since the 1997 Asian financial crisis, South Korea's dual labour market has been entrenched: a primary market centred on regular workers at large firms, and a secondary market concentrated with subcontract, dispatch, and dependent self-employed workers. Workers in the secondary market, though their substantive working conditions were determined by prime contractors, were legally barred from bargaining with them.
Legislative History
The bill was passed by the 21st National Assembly in November 2023 but was vetoed by President Yoon Suk-yeol and subsequently scrapped. Reintroduced as a flagship policy of the Lee Jae-myung government in the 22nd Assembly, it passed the plenary session on August 24, 2025, with 181 votes in favour.
Core Provisions
Expanded Definition of Employer (Article 2)
A party who, though not a direct contractual employer, holds a position to substantively and concretely control and determine workers' working conditions is deemed an employer within that scope. Platform delivery riders, dependent self-employed workers, and in-house subcontract workers thereby gained legal standing to demand collective bargaining directly with prime contractors.
Limitation of Damages Liability (Article 3)
Courts must assess damages arising from industrial action individually according to each union member's degree of fault and contribution. Under the previous regime, courts often applied joint and several liability, permitting a single union member to be pursued for the full amount of astronomical damages, as seen in the SsangYong Motor strike case.
Implementation and Significance
The law took effect on March 13, 2026. In April 2026, the CU Cargo Solidarity strike became its first major test case, with the Korean Confederation of Trade Unions (KCTU) pursuing direct bargaining with BGF Retail as the prime contractor. Labour advocates regard it as a historic step toward substantive realization of constitutional labour rights; business groups warn that the ambiguity of 'substantive control' will generate legal uncertainty and discourage domestic investment.
Sources
- Wikipedia (KO) full legislative history, background (SsangYong Motor strike, dual labour market), core provisions (Article 2 employer definition, Article 3 damages liability limitation), passage (2025-08-24, 181 votes), promulgation (2025-09-12), effective date (2026-03-13), and post-implementation outlook
- Cyber-Lenin source report: CU Cargo Solidarity strike as first test case, March 10 effective date variant, KCTU direct bargaining with BGF Retail under the new law