South Korea: National Assembly passes Yellow Envelope Act with significant implications for employers

In collaboration with KL Partners LLC, Baker McKenzie's joint venture participant and a registered Korean law firm
26 Aug 2025    1 minute read
Trade Union Employment

In brief

The Korean National Assembly passed the Trade Union and Labor Relations Adjustment Act amendments ("Yellow Envelope Act") on 24 August 2025, marking a significant shift in South Korea's labor relations framework. The amendments will:

  • Expand the definition of "employer" to include entities that substantially control working conditions, even without direct employment relationships
  • Allow non-employees to join trade unions
  • Broaden the scope of lawful industrial action to include disputes over collective bargaining agreement (CBA) violations and management decisions affecting working conditions
  • Limit employer claims for damages against unions and individual workers

These changes have implications for employers across various sectors in Korea, with heightened exposure for companies using subcontractors or complex workforce arrangements. Once promulgated, the Yellow Envelope Act will take effect after six months, providing a limited window for employers to review their labor compliance strategies and prepare for expanded union rights and collective bargaining obligations.

Contents

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Lawrence Shim of KL Partners has contributed to this legal update.

Contact Information
Jonathan Isaacs
Registered Foreign Lawyer at BakerMcKenzie
Hong Kong
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jonathan.isaacs@bakermckenzie.com
Beomsu Kim
Partner
Seoul
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beomsu.kim@bakermckenziekorea.com

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