Update on the proposed amendment to the TULRAA ("Yellow Envelope Act")

15 March 2023 3 min read

At a glance

We would like to provide you with an update on the amendment of the Trade Union and Labour Relations Adjustment Act (the “TULRAA”), referred to as the “Yellow Envelope Act.”
In September 2022, a Bill was introduced to amend the TULRAA.
Since then, a number of similar bills have been introduced.
However, in February 2023, the the Environment & Labour Committee of the National Assembly reviewed and abolished bills proposed by various members of the National Assembly and proposed a new alternative bill (the “Proposed Amendment”).
We discuss key details of the amendment below.

Reproduced with the permission of the authors Weon Jung Kim, Ki Young Kim, Paul Cho and Hoin Lee at Kim and Chang.

Since a Bill was proposed to amend the TULRAA on 14 September 2022, a number of similar bills were introduced. Most of these legislative bills focus on (i) expanding the definition of employees, employers, and labour disputes and (ii) restricting the degree of damages / preliminary attachment actions that the employer can undertake against labour unions and its employees for the labour union’s industrial actions.

However, on 21 February 2023, an alternative Bill (Proposed Amendment) was passed at the plenary session of the Environment & Labour Committee. This followed from a major review carried out by the Environment & Labour Committee of the National Assembly resulting in the abolishment of previously proposed bills by various members of the National Assembly.

They key details of the Proposed Amendment are as follows:

Expansion of the definition of employer

Currently, an “employer” who has entered into an employment agreement with an employee is deemed as an “employer” under the TULRAA. However, under the Proposed Amendment, “although not being parties to the employment agreement, persons who are in a position to substantially and specifically control and decide on the working terms and conditions of an employee shall be deemed as an employer.”

Expansion of the definition of labour disputes

Currently, “labour disputes” is defined as disputes arising from disagreements on the determination of employment terms and conditions. Under the Proposed Amendment, the definition of labour disputes will be expanded to include disputes arising from disagreements concerning employment terms and conditions. In other words, the “disputes over rights and obligations (legal disputes on the existence and performance of rights and obligations),” which are not subject to collective bargaining and industrial actions and thus are not deemed labour disputes under the TULRAA, will be considered legitimate labour disputes under the Proposed Amendment. As a result, it is expected that the scope of matters subject to mandatory collective bargaining and raised by the labour union which the employer should respond, will be expanded and the scope of industrial actions recognised as legitimate will be expanded.

Exemption from or limitation of liability for damages

The Proposed Amendment stipulates that, if a court recognises liability for damages caused by collective bargaining, industrial actions, and other union activities, the scope of liability shall be determined on a case-by-case basis for each person liable for damages based on the cause attributable to them and their degree of involvement. Accordingly, under the Proposed Amendment, it is difficult to hold union members jointly and severally liable for damages, and each union member’s fault and involvement to the damages should be determined individually. Considering that it is difficult to distinguish each individual's involvement and responsibility due to the nature of collective bargaining and industrial actions jointly conducted by multiple union members at the same time, and that the party claiming damages has the burden of proof, in practice it is expected that union members will be granted significant immunity from liability.

The Proposed Amendment to the TULRAA is currently pending at the Legislation & Judiciary Committee of the National Assembly. The opposition party has announced that if the Legislation & Judiciary Committee fails to pass the bill for more than 60 days, the opposition party will submit the Proposed Amendment to the plenary session through a vote of the Standing Committee on its own pursuant to the National Assembly Act. On the other hand, the current Administration officially opposes the Proposed Amendment, and the ruling party has stated that the President will veto the bill if the opposition party unilaterally passes it. Therefore, it remains to be seen whether the TULRAA will be amended as proposed.

We will provide updates if there are further developments regarding the amendment of the TULRAA.