Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Lawsuits against unions withdrawn under labor-friendly administration
Yang Kyung-soo, center, leader of the Korean Confederation of Trade Unions (KCTU), calls for an immediate amendment to the Trade Union and Labor Relations Adjustment Act during a press conference at the KCTU headquarters in Seoul, Thursday. Newsis
By Park Jae-hyuk
Gov't urges foreign firms to accept 'yellow envelope law'
Korean conglomerates are yielding to government and ruling party requests to reconcile with subcontracted workers, while foreign companies still watch with concern over the labor-friendly administration’s efforts to redefine “employer” and limit damages lawsuits against striking workers.
Hyundai Steel recently withdrew a lawsuit seeking 4.6 billion won ($3.3 million) in damages from 461 subcontracted workers who staged a 50-day sit-in at its Dangjin steel mill in South Chungcheong Province in 2021.
The decision follows pressure from the ruling Democratic Party of Korea (DPK), which urged Hyundai Steel and Hyundai Motor — both subsidiaries of Hyundai Motor Group — to drop suits filed against subcontracted workers.
“This outcome comes from our union’s meeting with DPK lawmakers and our appeal about the unfair lawsuit, as the party moves to revise the Trade Union and Labor Relations Adjustment Act,” Hyundai Steel’s union for irregular workers in South Chungcheong Province said Wednesday in a message to members.
With political pressure intensifying, speculation is mounting that Hyundai Steel may also drop a separate suit filed against 180 subcontracted workers, which demands 20 billion won in compensation for losses stemming from the 2021 protest.
Hyundai Motor may also withdraw three lawsuits against subcontracted workers that seek a combined 368 million won.
In the shipbuilding industry, Hanwha Ocean is negotiating with subcontracted shipyard workers to end a lawsuit filed by Daewoo Shipbuilding & Marine Engineering (DSME) to seek 47 billion won in damages from a 51-day strike in 2022. The suit has remained unresolved since Hanwha Group acquired DSME in 2023.
Earlier this week, National Assembly Speaker Woo Won-shik thanked Hanwha Ocean for its intent to withdraw the lawsuit during his visit to the company’s shipyard on Geoje Island, South Gyeongsang Province. Woo previously belonged to the DPK before he took his current position and had to give up his party membership.
The government is also stepping up efforts to encourage foreign companies to accept the so-called “yellow envelope law” — a pro-labor amendment to the Trade Union Act proposed by the DPK. The bill would empower subcontracted workers to negotiate directly with their employers’ clients and prohibit management from seeking damages for strikes.
American Chamber of Commerce in Korea (AMCHAM) Chairman James Kim, left, talks with Labor Minister Kim Young-hoon at the AMCHAM office in Seoul, Thursday. Courtesy of AMCHAM
On Thursday, Labor Minister Kim Young-hoon paid visits to the American Chamber of Commerce in Korea (AMCHAM) and the European Chamber of Commerce in Korea (ECCK), which have both expressed concerns about the bill.
“Two key reforms — labor flexibility and CEO risk — are essential to improving the competitiveness (of Korea). We are concerned that the ‘yellow envelope bill’ could further limit labor flexibility,” AMCHAM Chairman James Kim said during the meeting with the minister.
ECCK Chairman Philippe van Hoof emphasized the importance of removing uncertainty regarding the definition of “employer.”
In response, the minister promised to form a dedicated task force with industry representatives to ensure continuous dialogue over the next six months and incorporate industry input into policy discussions.