Korea's biz lobby groups express regret over passage of pro-labor bill

Representatives from South Korea's major industrial bodies speak at the National Assembly in Seoul, Aug. 18, to call for the parliament to reflect local companies' voices in a government-backed labor reform bill. Yonhap

Korea's business lobby groups on Monday expressed regret over the passage of a labor bill broadening workers' rights over the weekend, calling for government efforts to protect and ensure the smooth operation of businesses.

On Sunday, the National Assembly passed the so-called "yellow envelope bill" in a vote led by the ruling Democratic Party.

"As the revisions can potentially lead to management disputes and lawsuit risks, we ask the parliament to seek balanced legislative efforts to minimize the side effects," the country's eight major business lobby groups said in a joint statement.

"In order to guarantee a business environment free from speculative capital threats, we need to promptly establish protective measures that meet global standards," they added.

The revisions to Articles 2 and 3 of the Labor Union Act guarantee the bargaining rights of indirectly employed subcontracted workers.

The bill also prohibits companies from filing lawsuits for damages or provisional seizures against unionized workers, which labor unions argue businesses have used to suppress strikes.

The groups also called for a "reasonable" revision of rules related to breach of duty, along with the stipulation of the business judgment rule, which protects executives from liability when they make business decisions based on sufficient information.

The government needs to apply differentiated regulations and incentives depending on the size of companies as well, they added.

The American Chamber of Commerce in Korea (AMCHAM) also called for government efforts to establish a transparent and predictable business environment in the face of the passage of the bill.

"Uncertainty in the business environment directly affects corporate confidence and long-term planning," AMCHAM Chairman James Kim said in a release.

"Clear standards from the government will be critical to ensure that this legislation does not weaken Korea's competitiveness as a global business destination," he added.

The revised act will take effect six months after the date of its promulgation.