[Exclusive] Foreign Companies Association in Korea (KOFA) Survey on Perception of "Yellow Envelope Bill": A survey of CEOs and HR managers of foreign-invested companies on the amendments to the Trade Union Act (Articles 2 and 3) found that 64.4% said it
Regarding withdrawing their Korean operations, 7.9% responded they are considering it, while 37.6% said they are not considering it. Furthermore, 27.7% said they are considering reducing their investment.
댓글 0
기사입력 : 2025.08.28 03:35
Amidst intense conflicts between the ruling and opposition parties, six major domestic economic organizations, and North American and European economic chambers and labor groups in Korea, the so-called "Yellow Envelope Bill" (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) passed the National Assembly on the 24th with 183 votes in favor, marking its first passage in 20 years.
The Foreign Investment Companies Association in Korea [KOFA] conducted an anonymous perception survey on the Yellow Envelope Bill targeting representatives and HR managers of the Korean subsidiaries of 100 foreign-invested companies. The results indicated a somewhat more negative than positive perception. This survey focused more on Article 3, which reasonably adjusts liability for damages caused by industrial action, rather than on Article 2(2) concerning the expansion of the definition of "employer" or Article 2(5) regarding decisions on business operations.
< Yellow Envelope Bill - Basic Survey Data >
The industries represented in this first survey were General Manufacturing (13.9%), Semiconductors (8.9%), Pharmaceuticals (8.9%), and Specialty Chemicals (7.9%). The regions of the respondents' parent companies were Europe (53.5%), North America (U.S.) (22.8%), and Asia (21.8%).
By sales revenue, the respondents were: under KRW 10 billion (19.8%), KRW 30-50 billion (22.8%), over KRW 200 billion (20.8%), KRW 50-100 billion (16.8%), and KRW 100-200 billion (13.9%).
By number of employees, the respondents were: 100-300 employees (27.7%), under 30 employees (23.8%), 300-500 employees (16.8%), 50-100 employees (12.9%), and over 1000 employees (7.9%).
< Responses to Questions on Article 3 >
In single-response questions regarding Article 3:
-
On the clause limiting liability for damages: (Positive 7%, Neutral 46%, Negative 47%)
-
On the clause expanding protection for strike participants: (Positive 40%, Neutral 16%, Negative 44%)
-
On the clause limiting civil liability for illegal strikes: (Positive 30%, Neutral 20%, Negative 50%)
(Source: Foreign Investment Companies Association in Korea, KOFA)
< Anticipated Impact on Business Operations in Korea >
< Risk Management Concerns >
< Impact on Future Investment Plans >
< Expert Opinions from Respondents >
An HR expert who responded stated, “Beyond the issue of subcontracting, Article 2 of the Yellow Envelope Bill presents anticipated problems as it involves infringement on essential management rights and limitations on claiming damages.” The head of a European manufacturing company's Korean subsidiary expressed, “While companies with existing unions or frequent labor disputes will inevitably be sensitive, those without unions or labor-management issues are not yet at the stage of considering withdrawal or reduction.” Other opinions included, “The proposal of the bill based on ILO recommendations is viewed very positively, and it seems positive from an ESG perspective regarding preemptive responses.”
< Context from Previous Data >
According to a 2022 national policy research portal report surveying 303 foreign-invested companies, 58 companies (19.1%) reported having a labor union. It was also reported that GM Korea (a U.S. automaker) has 276 primary subcontractors in Korea, a figure that rises to 3,000 when including secondary and tertiary suppliers. Conversely, most foreign-invested companies outside sectors like automobiles, electronics, semiconductors, and specialty chemicals are small-to-medium-sized enterprises (SMEs) that operate labor-management councils instead of unions. Many foreign startups that have recently entered Korea have fewer than 5 employees, making them exempt from certain labor laws. There is still no official statistics on subcontracting practices among small and medium-sized foreign-invested companies.
< Follow-up Survey Plans >
KOFA (Representative Kim Jong-chul) announced that a follow-up survey, focusing on Article 2(2) regarding the expansion of the "employer" definition and Article 2(5) on business management decisions, is scheduled for late August.
The specific survey items will include:
-
A perception survey on key labor policies proposed by the new government, including awareness levels and overall evaluation.
-
An overall evaluation of the proposed 4.5-day work week (without wage reduction), reasons for positive/negative evaluations, and planned responses.
-
An overall evaluation of the proposed prohibition of the comprehensive wage system, reasons for positive/negative evaluations, and planned responses.
The survey will specifically include items on whether the respondent company has a union and its type, as well as whether it engages subcontractors and the union status within those subcontractors.
< About KOFA >
The Foreign Investment Companies Association in Korea (KOFA) is composed of CEOs and HR executives of foreign-invested companies in Korea. It possesses a network of approximately 600 member companies and serves as a non-profit bridge between the management of foreign-invested companies and the government. It provides business information for the roughly 17,000 foreign-invested companies in Korea and conducts annual surveys on salaries and benefits, various studies on HR systems, and other research.
전체댓글 0
