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Concerns rise over bargaining fragmentation under 'Yellow Envelope Bill'

Published: 25 Nov. 2025, 00:00

Members of the Korean Confederation of Trade Unions, including its leader Yang Kyung-soo, celebrate alongside Progressive Party members after the National Assembly passed the amendment to the Trade Union and Labor Relations Adjustment Act, known as the Yellow Envelope Bill, during a plenary session on Aug. 24. [YONHAP]

A draft enforcement decree for amendments to the Trade Union and Labor Relations Adjustment Act has raised concerns that it will greatly expand separate bargaining rights for subcontractor unions, triggering confusion at work sites. Under the decree for the "Yellow Envelope Bill" amending Articles 2 and 3 of the labor union law announced for public review by the Ministry of Employment and Labor on Monday, subcontracted workers will be able to demand direct collective bargaining with parent companies starting in March of next year.

The issue lies in how much the decree specifies criteria for splitting bargaining units based on job type, interests and union characteristics. While the existing law also allowed separate bargaining units, they were acknowledged only in limited and exceptional cases. When multiple unions were permitted in 2011, the single bargaining channel system played a central role in minimizing labor-management conflict. The new decree, however, allows subcontractor unions to claim separate bargaining more easily for reasons as broad as job differences, plant location or variations in working conditions.

Companies are already on alert. At Hyundai Motor, for example, more than 5,000 partner-company unions could theoretically file separate bargaining requests. Even if job groups are consolidated to maintain a unified bargaining channel, differences in parts, factory lines or work environments could still be used to support demands for a split. If direct talks between parent firms and subcontractor unions fail, the decree authorizes regional labor commissions to decide on consolidation or division of bargaining units based on working conditions, employment types and bargaining practices. Yet even with such criteria in place, the number of unions employers must negotiate with is likely to rise sharply. Labor groups are now calling for the complete abolition of the single bargaining channel system, deepening concerns. Employers warn that the system has already become ineffective.

The weakening of a unified bargaining system will impose significant burdens on companies. Firms could face year-round bargaining with numerous subcontractor unions, each citing differing work conditions or plant customs as grounds for separate talks. This increases staffing, time and cost pressures. The risk of inter-union conflict will also grow. When unions negotiate separate agreements with the same employer, disputes may arise if any union believes it has been treated unfavorably. The benefits of unified bargaining — which prevented overlapping negotiations and reduced confusion — may erode, potentially undermining corporate competitiveness.

The government must apply strict criteria when approving separate bargaining units to prevent disorder in labor-management relations. Protecting workers’ rights is essential, but an excessively fragmented bargaining structure will only intensify conflict. The Labor Ministry argues that separate bargaining is meant to ensure meaningful negotiating power for subcontractor unions. But instability in industrial operations ultimately harms the public. The ministry has a heavy responsibility and must refine the rules carefully before implementation.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.