U.S. firms in Korea express concerns over pro-labor bill

AMCHAM says 'yellow envelop law' will make global investors leave Korea​

By Park Jae-hyuk, The Korea Times - U.S. companies doing business in Korea have started publicly voicing concerns about the increasing possibility of a labor-friendly amendment to the Trade Union and Labor Relations Adjustment Act, cautioning about its potential adverse effects on Asia's fourth-largest economy.

American Chamber of Commerce in Korea (AMCHAM) Chairman James Kim said in a statement, Thursday, that the chamber fully supports the negative stance taken by Korea’s six largest business associations regarding the pro-labor bill known as the "yellow envelope law."

The bill aims to empower subcontracted workers by allowing them greater negotiating leverage with the clients of their employers, while also prohibiting management from seeking compensation for damages incurred during illegal strikes.

Kim's statement coincided with lawmakers from the main opposition Democratic Party of Korea (DPK) and minor liberal opposition parties unilaterally passing the bill at the National Assembly's Environment and Labor Committee, Monday.

Although the Legislation and Judiciary Committee on Wednesday delayed its decision on whether to bring the controversial bill to the plenary session, citing escalating protests from the conservative ruling People Power Party, the business lobby representing U.S. firms in Korea voiced concerns about the bill's potential impact on the country's business environment.

“As highlighted in our 2024 Business Survey, the unpredictable regulatory environment and unique regulations in Korea are already significant challenges for the foreign business community,” Kim said.

“The recent passage of this bill only exacerbates these concerns by introducing uncertainty that could deter investments and undermine Korea’s global standing as a competitive business hub.”

AMCHAM also urged the Assembly to reconsider this legislation and pursue a more balanced and fair approach that protects the rights of both workers and businesses.

The bill earned the nickname after citizens delivered yellow envelopes containing money in 2014 to support unionized workers of SsangYong Motor. These workers had been ordered by a court to pay a total of 4.7 billion won ($3.4 million) in compensation to the automaker for their strike in 2009.

The opposition bloc has consistently proposed the bill to enable subcontracted workers to negotiate directly with the clients of their employers, even if these clients do not directly employ those workers.

The proposed bill also justifies strikes by subcontracted workers against their employers’ clients and bans management from demanding compensation for damage caused during illegal strikes, unless they assess the damage caused by each individual.

Although the previous 21st Assembly passed the bill late last year, President Yoon Suk Yeol exercised his veto and eventually thwarted the revision.

Since the opposition bloc’s resounding victory in the general elections in April, Korea’s two largest umbrella unions have begun to urge lawmakers at the current Assembly to seek the revision again, claiming that damage claim suits against unionized workers could threaten their existence.

However, the business-friendly Yoon administration has maintained a firm stance on the bill, indicating that the president may exercise his veto once again.

Amid the increasing controversy, Chairman Sohn Kyung-shik of the Korea Enterprises Federation, a major business lobby in Korea, held a meeting with Assembly Speaker Rep. Woo Won-shik to voice concerns regarding the yellow envelope bill.

Sohn claimed that the proposed law will encourage labor disputes and illegal strikes.

Source: https://www.koreatimes.co.kr/www/tech/2024/07/419_379351.html?na 

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