South Korea to use guidelines to clarify Yellow Envelope Law dispute scope

The South Korean government has decided to clarify the scope of labor disputes under the amended Trade Union and Labor Relations Adjustment Act, commonly known as the ‘Yellow Envelope Law’, through administrative implementation guidelines rather than formal enforcement decrees.

This decision stems from the need for immediate application on the ground. While the government considered using enforcement decrees or rules, the process of public notice and regulatory review typically takes over three months. Furthermore, the Ministry of Employment and Labor noted that current laws lack specific delegation clauses to define dispute scopes via enforcement decrees.

The move follows directives from President Lee Jae-myung to minimize confusion in the workplace. The President previously raised concerns regarding whether certain issues, such as large corporations like Samsung Electronics and SK Hynix distributing a percentage of operating profits as performance bonuses, should be classified as valid subjects for labor disputes.

While implementation guidelines allow for faster deployment, they lack the external legal binding force of formal enforcement decrees. The government plans to monitor changes in the field following the application of these guidelines and will consider alternative measures if necessary.