'Yellow envelope law' likely to deepen labor-management conflict

This combined photo shows unionized cargo truck drivers, who occupied the rooftop of HiteJinro's headquarters building in Seoul, Aug. 16, a subcontracted worker of Daewoo Shipbuilding & Marine Engineering, who locked himself in a steel-frame structure at the shipbuilder's dockyard on Geoje Island in South Gyeongsang Province, July 19, and Rep. Lee Eun-ju, chairperson of the Justice Party's emergency committee, holding a yellow envelope at the National Assembly in Seoul, Aug. 22, to call for a revision of the Trade Union Act, so that unionized workers are exempted from responsibility for illegal strikes. Korea Times files

Controversy rises over exempting unions from responsibility for illegal strikes

By Park Jae-hyuk

An agreement between HiteJinro and unionized cargo truck drivers during the Chuseok holiday eventually ended their half-year conflict, but at the same time, it was regarded widely as the company's complete surrender to the workers.

The liquor maker agreed on a 5 percent increase in delivery fees, as well as creating a welfare fund for the truckers and giving them 150 percent of normal freight charges on holidays.

The most eye-catching clause in their agreement was the company's promise to retract damage claim and criminal suits against the truckers. It had demanded 2.8 billion won ($2 million) in compensation for financial losses from the truckers blocking the entrances to its factories.

HiteJinro emphasized that it retracted the damage claim suit on the condition that the truckers will not hinder transportation from its factories nor will they occupy its head office anymore. But its decision has unintentionally provided momentum to the main opposition Democratic Party of Korea's (DPK) attempts to legislate the so-called "yellow envelope law."

After yellow envelopes with money were delivered in 2014 to support unionized workers ordered by a court to pay a combined 4.7 billion won to SsangYong Motor in compensation for their strike in 2009, the DPK has sought to revise the Trade Union and Labor Relations Adjustment Act, so that management cannot demand compensation for damages stemming from illegal strikes.

The revision bill was not passed in the previous two assemblies between 2012 and 2020.

Since Daewoo Shipbuilding & Marine Engineering (DSME) claimed a combined 47 billion won against its subcontracted workers in compensation for damages from their 51-day strike at its shipyard, however, debate has reignited over the Trade Union Act.

Under the current law, their strike is considered illegal, because DSME is not regarded as their employer. The shipbuilder is therefore able to demand compensation for damages from their illegal action.

The main opposition party, which holds the majority in the 300-seat National Assembly, vowed to pass the revision bill before the end of the assembly's regular session later this year.

"Damage claim suits against unionized workers could threaten their survival," said Rep. Jin Sung-joon, the vice floor leader of the DPK.

When the minor opposition Justice Party asked DPK Chairman Lee Jae-myung earlier this month to make efforts to legislate the yellow envelope law, the former presidential candidate answered that both parties are not that different in their political orientation.

The two opposition parties, which welcomed HiteJinro's decision to retract its lawsuits against the cargo truck drivers, jointly proposed a revision to the Trade Union Act.

The Korean Confederation of Trade Unions also joined hands with People's Solidarity for Participatory Democracy, Lawyers for a Democratic Society and various other progressive civic groups to conduct a campaign to revise the law.

"DSME declined to negotiate with its subcontracted workers and suppressed them, so the workers had no choice but to occupy its shipyard," the organizations said in a press conference last Wednesday. "However, the company argued their strike was illegal, demanding 47 billion won in compensation for damage. We have been angry about this situation."

Korea Enterprises Federation Chairman Sohn Kyung-shik, second from right, passes a document voicing concerns of businesses over the "yellow envelope law" to Rep. Jeon Hae-cheol of the ruling Democratic Party of Korea, left, who chairs the National Assembly's Environment & Labor Committee, during their meeting at the National Assembly building in Seoul, Sept. 14. Korea Times photo by Oh Dae-keun

Fears among businesses

In contrast, businesses and the ruling People Power Party (PPP) have expressed serious concerns about the proposed revision to the Trade Union Act.

President Yoon Suk-yeol has emphasized that unlawful acts must be eradicated in industrial sites, since the beginning of the strike by DSME's subcontracted workers. Minister of Employment and Labor Lee Jung-sik, who had previously led labor movements at the Federation of Korean Trade Unions, also said recently it is important to obey the law.

The PPP is even considering asking the president to exercise his veto, if the proposed revision to the Trade Union Act is passed.

The Korea Enterprises Federation (KEF) pointed out the yellow envelope law goes against the global standard.

According to the business lobby group, France failed to implement a similar law in 1982, as it was considered unconstitutional. The U.K., which has been mentioned as an example of countries implementing such a law, does not ban employers from demanding compensation for damages from illegal strikes, although it set a ceiling for the amount that can be claimed.

The KEF noted that the U.K. also allows employers to claim damages against individual workers.

"The yellow envelope law does not accord with the spirit of the Constitution, as it could excessively infringe on the property rights of employers," KEF Chairman Sohn Kyung-shik told Rep. Jeon Hae-cheol of the DPK, who chairs the National Assembly's Environment & Labor Committee, during their meeting last Wednesday. "As the law protects offenders and forces victims to accept their damages, it would seriously disrupt our economic system."