[Op-Ed] A “Union Kingdom” with Maximum Rights, Constant Strikes, and No Accountability—The Burden Falls on Everyone

The Yellow Envelope Act (Revised Labor Commission Act) limits employers’ claims for damages, effectively eliminating companies’ means of recovering losses / To bear the costs, companies will delay new hiring and consider automation and offshoring over investment / Labor unions have become barbed-wire fences for some regular and high-income workers, and walls for young job seekers

From a company’s perspective, claims for damages were the minimum safeguard needed to maintain predictable management and an orderly investment environment. They were not a tool to pressure labor unions, but rather reflected faith in the rule of law—that illegal acts should carry at least minimal accountability—and served as a foundation for companies to continue hiring and investing.

Since March 10, with the implementation of the Yellow Envelope Act (Revised Labor Commission Act), this order has changed significantly. Under the law, employers’ claims for damages are, in principle, restricted, and companies’ means of recovering losses are effectively disappearing. In other words, the broader framework of labor-management relations, which had been sustained on the premise of trust in accountability, is being shaken.

In addition, the concept of “employer” is being substantially expanded. Previously, in disputes over worker status, the worker had to prove that status. Now, the structure has changed so that the employer must prove that the person is “not a worker.” This shift in the burden of proof will place companies at a disadvantage from the very outset of labor-management disputes.

Last year, the government confirmed budget support totaling KRW 11 billion for the two major national labor federations, citing reasons such as jeonse housing support and facility repairs. With this financial backing, labor unions can embark on strikes with greater stability, while employers’ claims for damages arising from those strikes can be defended against under the Yellow Envelope Act (Revised Labor Commission Act).

This creates a “union kingdom” in which rights are enjoyed to the fullest, strikes occur frequently, and responsibility for the consequences is legally exempted. If a particular group is granted both expanded rights and immunity for its actions at the same time, it is obvious that the resulting social costs will be borne in full by the rest of society.

According to Jinhaksa Catch’s “2026 Desired Salary and Companies Survey,” young people’s desired starting salaries fell by about 9 percent from the previous year, and 6 out of 10 respondents said that, under the same conditions, they would choose employment at a small or medium-sized enterprise rather than remain part-time while preparing for a job at a large corporation. This is evidence that more young people are lowering their expectations amid the employment cliff.

An environment in which claims for damages are difficult to pursue changes companies’ choices. If the Yellow Envelope Act (Revised Labor Commission Act) takes effect, companies will calculate the expected losses from strikes as an opportunity cost and, in order to bear those costs, will delay new hiring and consider automation and offshoring rather than investment. In the end, this will weaken labor-market flexibility itself and deepen youth unemployment.

Labor unions have existed under the banner of serving as the minimum fence protecting workers. But at some point, the meaning of that fence seems to have been distorted, turning it into barbed wire for some regular and high-income workers, and one cannot help but worry that young job seekers now see it as a wall they cannot climb over.

This is why, in today’s era of global management, there is deep concern over placing yet another shackle on companies in the form of the Yellow Envelope Act (Revised Labor Commission Act).

Junho Jang, Intern Researcher, Center for Free Enterprise (CFE)

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Original title: [칼럼] 권리 최대한, 파업 수시로, 책임 면제받는 '노조 왕국'--부담은 온 국민

Author: Jun-ho Jang

Date: 2026-04-21

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&idx=28820