The Italian Chamber of Commerce in Korea (ITCCK) is pleased to share a legal update prepared by our esteemed Member, Yulchon LLC, highlighting a major development in South Korea’s labor law landscape.

The so-called “Yellow Envelope Act” passed through the Legislation and Judiciary Committee of the Korean National Assembly on August 1, 2025, and appears headed towards final passage this month. Further significant changes to the legislation are unlikely, and the president has expressed his intention to sign the bill into law. Another version of the bill was vetoed by the previous president multiple times.

This legislation will make significant changes to Korea’s Trade Union and Labor Relations Adjustment Act (the “Union Act”). This version of the bill is not identical to the version vetoed by former-president Yoon last year, but is very similar in its scope and approach.

Key highlights from the full article include:

• Expansion of the definition of "employer", which may affect large companies working with subcontractors;

• Permission for unions to include non-employee members;

• Broader justifications for industrial action, including disputes over management decisions such as restructuring;

• Limitations on liability for damages incurred during strikes or collective bargaining;

• Important compliance implications for employers, especially those relying on third-party contractors.
  
  

Stay informed on this major legal development. To read the full article, please download the document at the following link: [LINK HERE]