“Yellow Envelope Act” Passes National Assembly Plenary Session
On August 24, 2025, the National Assembly passed the amendment to the Trade Union and Labor Relations Adjustment Act (the “TULRAA”), commonly known as the “Yellow Envelope Act.”
The amendment was promulgated on September 9, 2025 and will become effective on March 10, 2026, six months from the date of promulgation. The key aspects of the amendment are as follows.
1. Expansion of Scope of “Employer” Under TULRAA
The proposed amendment recognizes an entity as an “employer” under the TULRAA if it has substantial and specific control over working conditions, even if it is not the direct employer under an employment contract. Accordingly, if a contracting entity can substantially and specifically control or determine the working conditions of a subcontractor’s employees, it may be deemed an employer and be obligated to engage in collective bargaining with the subcontractor’s union.
2. Expansion of Scope of “Union Membership” Under TULRAA
Currently, the TULRAA stipulates that an organization is not considered a trade union if it allows non- employees to join. The proposed amendment deletes this provision, making it possible for individuals who are not “employees” as defined by the TULRAA to join a trade union.
3. Expansion of Scope of “Industrial Dispute” Under TULRAA
The previous versions of this bill proposed deleting the word “determination,” which would have expanded the scope of industrial disputes to include not only disputes of interest (matters concerning the determination of working conditions), but also disputes of right (matters concerning the implementation of determined conditions). However, the current amendment retains the word “determination” but expands the scope of industrial disputes to include matters related to the “status of workers,” “business management decisions that affect working conditions,” and “violations of a collective bargaining agreement by the employer.”
Notably, by explicitly including “business management decisions that affect working conditions” as a subject of industrial disputes, the amendment makes it likely that union demands for collective bargaining or industrial action over management decisions – such as mergers, spin-offs, business transfers, factory relocations or restructuring that impact employees – will be regarded as legitimate actions.
4. Limitation on Damages Claims Against Unions
While the current TULRAA grants immunity from liability for damages resulting from legitimate collective bargaining and industrial actions, the amendment broadens this protection to cover damages arising from “other activities of the trade union” as well. It also clarifies that a union or worker is not liable for damages caused to an employer when acting in defense against the employer’s illegal acts. In addition, the amendment outlines specific factors that courts must consider when determining the extent of individual liability for illegal acts committed by the union and/or workers and provides a framework for such union and/or workers to request a reduction in damages.
The TULRAA encompasses major amendments, such as the (i) expansion of the scope of an “employer,” (ii) expansion of the scope of “union membership,” (iii) expansion of the scope of industrial disputes, and (iv) limitation on damages claims, and it is likely to have a significant impact on existing labor-management relations. Accordingly, companies will need to prepare for changes in labor-management relations with the implementation of the TULRAA.
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Authors
Hyun Jae PARK (View Profile)
Shin Hyeong PARK (View Profile)