On Monday, labor unions across South Korea initiated demands for collective bargaining with parent companies, following the first day of enforcement of the revised Trade Union and Labor Relations Adjustment Act, often referred to as the “Yellow Envelope Law.” The law, which took effect on March 10th, mandates that companies with substantial control over subcontractors engage in negotiations with their labor unions, a move expected to reshape labor relations in industries reliant on subcontracting.
The initial wave of demands included filings from unions representing workers at Coupang and POSCO, as reported by multiple news outlets. These filings represent the first instances of unions formally requesting negotiations under the recent legislation, with companies legally obligated to publicly announce receipt of these demands within seven days. According to the Edaily report, Coupang and POSCO were the first companies to acknowledge the demands, posting notices of the requests.
The scope of the initial demands extends beyond these two companies. As of Monday evening, a total of 407 subcontracting unions, representing 80,000 workers, had filed requests for collective bargaining with parent companies, according to the Ministry of Employment and Labor. This widespread action underscores the anticipated impact of the Yellow Envelope Law, which aims to address power imbalances between parent companies and their subcontractors.
The response from the business community has been mixed. While some companies are complying with the notification requirements, concerns remain about the potential for expanded wage and benefit demands. Chosun Ilbo reported that experts anticipate that initial discussions regarding workplace safety will quickly evolve into demands for wage increases and performance-based bonuses. Central Daily News echoed this sentiment, characterizing the situation as “preordained confusion.”
The implementation of the law has similarly sparked differing perspectives in the media. Hankyoreh newspaper framed the first day of enforcement as “suppressed demands erupting,” while JoongAng Ilbo characterized the situation as “chaos on the horizon.” This divergence in reporting highlights the politically charged nature of the legislation.
Beyond the initial filings, unions are preparing for further action. The Korean Confederation of Trade Unions (KCTU) held a rally in Seoul on Monday, vowing to continue the fight for collective bargaining rights. Simultaneously, the Federation of Korean Trade Unions (FKTU) announced plans to organize and expand its presence within subcontracting sectors. Approximately 900 workplaces, encompassing 140,000 union members, have already signaled their intent to pursue negotiations, according to Green Economic News.
The Hyundai Aiehl union, affiliated with the KCTU, held a protest at the headquarters of Hyundai Mobis, opposing the sale of the latter’s lamp business unit. The union is also seeking wage increases as part of its 2026 collective bargaining agreement. This action demonstrates the immediate application of the Yellow Envelope Law to ongoing labor disputes and corporate restructuring efforts.
The next phase involves a period of consolidation, as unions seek to unify their bargaining positions. Following the initial seven-day notification period, unions will work to establish unified negotiating committees, a process expected to be completed by March 17th. The outcome of these negotiations remains uncertain, and the potential for labor disputes looms large as companies and unions navigate the new legal landscape.
