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Participants chant slogans during a press conference held in front of the Supreme Prosecutors’ Office in Seoul on August 27, calling for the prosecution of Hyundai Steel over alleged illegal dispatch and refusal to negotiate. (Photo courtesy of Yonhap News) |
[Alpha Biz= Kim Jisun] Seoul, August 27, 2025 — The passage of the so-called “Yellow Envelope Law” (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) is sending shockwaves through Korea’s industrial and labor landscape. A new survey shows that one in three foreign companies operating in Korea are considering either scaling back investment or exiting the country.
Labor disputes are also intensifying, with subcontractor unions at companies such as Hyundai Steel and Naver filing collective lawsuits and demanding direct negotiations. With six months left until the law takes effect, concerns over worsening labor-management conflicts and a potential corporate exodus are increasingly materializing.
According to a survey conducted by the Korea Foreign Enterprises Association (KOFA) of executives and HR managers at 100 foreign-invested companies in Korea, 35.6% said they were considering “reducing investment or withdrawing from Korea” following the law’s passage. Meanwhile, 64.4% responded that the impact would be “neutral.”
The survey found particularly negative sentiment toward Article 3 of the revised law, which limits corporate liability for damages caused by union strikes. Only 7% viewed the restriction on companies’ ability to seek damages positively, while 47% expressed negative views and 46% were neutral. Similarly, only 30% supported provisions limiting civil liability for illegal strikes, compared with 50% negative and 20% neutral. On expanded protections for strike participants, responses were more divided: 40% positive, 44% negative, and 16% neutral.
KOFA, a non-profit organization serving as a bridge between roughly 15,000 foreign-invested companies in Korea and the government, has about 600 member firms. Of the companies surveyed, 53.5% were European, 22.8% North American, and 21.8% Asian. By workforce size, 27.7% employed 100–299 people, 23.8% fewer than 30, 16.8% between 300–499, 12.9% between 50–99, and 7.9% more than 1,000. KOFA said it will conduct an additional survey on Article 2, which expands bargaining rights to allow subcontractor unions to negotiate directly with parent companies.
Meanwhile, on the industrial front, collective lawsuits and negotiations from subcontractor unions are gaining momentum. On August 27, the Hyundai Steel Subcontractor Branch of the Korean Metal Workers’ Union, representing 1,892 workers, filed a complaint with the Supreme Prosecutors’ Office in Seoul. The accused include Hyundai Motor Group Chairman Euisun Chung, Hyundai Steel CEO Kang-Hyun Seo, and former CEO Dong-Il Ahn.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
