Even if the Yellow Envelope Act (Revised Labor Commission Act) passes, the president should exercise the veto.

The so-called Yellow Envelope Act (Revised Labor Commission Act) (the amendment to the Trade Union Act) has once again become the center of heated controversy in politics and the economy. This version of the Yellow Envelope Act (Revised Labor Commission Act) has two main provisions. One is to expand the responsibilities of primary contractors toward subcontracted workers, and the other is to restrict companies’ claims for damages arising from illegal strikes. In short, it aims to allow subcontracted workers to engage in collective bargaining with the primary contractor rather than the company they actually belong to, while also neutralizing companies’ claims for damages in response to illegal strikes. The Democratic Party, the giant opposition party, has reportedly pushed this bill through a National Assembly subcommittee on its own and plans to put it to a vote at the plenary session on the 25th.

This is not the first time the Yellow Envelope Act (Revised Labor Commission Act) has been proposed. The bill was originally passed in the previous 21st National Assembly under opposition leadership, but it was scrapped after President Yoon Suk Yeol exercised his veto. As soon as the 22nd National Assembly opened, the opposition proposed it again.

In fact, the substantive history of the Yellow Envelope Act (Revised Labor Commission Act) did not begin with the 21st National Assembly. It goes back much further—nearly 20 years, even based only on cases that can be readily confirmed. In July 2006, a group of union members, armed with steel pipes and other weapons, illegally occupied POSCO headquarters and staged a sit-in, demanding that POSCO headquarters negotiate with them.

At first glance, it may seem as though POSCO employees were striking against their own company. In reality, however, they were not POSCO employees. POSCO was merely the client company that had ordered the relevant construction project, while these workers belonged to specialized construction firms that had won the contract from POSCO and were carrying out the work. After collective bargaining over wage increases with their own employers broke down, they descended on POSCO—the ordering company—confined POSCO staff, and staged an illegal occupation protest. More recently, two similar court cases are under way. In one, the Korean Parcel Delivery Workers Union is demanding collective bargaining with CJ Logistics, the primary contractor, instead of local delivery agencies. In the other, the in-house subcontractor branch of the Korean Metal Workers’ Union at HD Hyundai Heavy Industries is demanding collective bargaining with HD Hyundai Heavy Industries, the primary contractor. Seen in this light, the passage and enforcement of the Yellow Envelope Act (Revised Labor Commission Act) would amount to an official declaration that organized labor’s “struggle,” pursued for nearly 20 years, has finally achieved its objective.

It is only natural that the business community is deeply concerned about the Yellow Envelope Act (Revised Labor Commission Act). If this bill passes, primary contractors will immediately be placed in a position where they must engage in collective bargaining with subcontractors’ workers and unions, adding yet another burden to already difficult labor-management relations. Moreover, the only means companies currently have to respond to illegal strikes is to file claims for damages after the fact. If even that is neutralized, companies will be left completely defenseless against illegal strikes.

The biggest and most fundamental problem with the Yellow Envelope Act (Revised Labor Commission Act) is that it shakes the very foundations of the free market economy, a core constitutional value of our country. For example, one of the pillars supporting a free market economy is private property. Citizens have the right to protect their property, and the state has a duty to protect it. Yet the Yellow Envelope Act (Revised Labor Commission Act) ties companies’ hands by depriving them even of the last remaining means of responding to illegal strikes that infringe on property rights. This is tantamount to denying citizens the right to protect their property rights. It also means that the state is not only abandoning its duty to protect property rights, but is in effect encouraging their violation. This is why concerns that the excessive expansion of the scope of “employer” and the concept of labor disputes, along with the limitation of liability for damages, are unconstitutional are not being raised without reason.

Anyone who had paid even a little attention to the international competitiveness indicators released every year would have found it difficult to propose a bill like the Yellow Envelope Act (Revised Labor Commission Act). It is already well known that the labor sector is the area in which Korea ranks most poorly in international competitiveness assessments. Even within this labor sector, the most problematic issues are the rigidity of the labor market, rigidity in wage determination, rigidity in hiring and firing, and conflict-ridden labor-management relations. Naturally, reforming these rigidities is what would significantly improve Korea’s international competitiveness and restore vitality to the economy. Yet the Yellow Envelope Act (Revised Labor Commission Act) moves in precisely the opposite direction, seeking to make them even more rigid.

The Yellow Envelope Act (Revised Labor Commission Act)—which is unconstitutional, anti-market, and seriously undermines the international competitiveness of the Republic of Korea—is a law that should never have been proposed in the first place. Furthermore, strictly speaking, not everything passed by the National Assembly automatically becomes equally worthy of being called “law.” Only a law worthy of the name can truly be called law, and only a country governed by such laws is a genuine rule-of-law state. The Yellow Envelope Act (Revised Labor Commission Act) must not be passed. If it is passed, the president must once again exercise the veto and reject this “law that is not even worthy of being called a law.”

Hyukchul Kwon, Director of the Free Market Institute

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Original title: ‘노란봉투법’ 통과되더라도 대통령은 거부권을 행사해야

Author: Hyeok-cheol Kwon

Date: 2024-07-24

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=2&idx=26772