According to a survey, one in three foreign companies that entered the domestic market after the passage of the Yellow Envelope Act (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) is considering reducing investment or withdrawing.

The Yellow Envelope Act includes provisions that allow subcontractor workers to negotiate with the primary contractor and expand the scope of strikes. The criteria for employers to claim damages for illegal strikes will also become stricter.

Minister Kim Young-hoon of the Ministry of Employment and Labor observes the voting on the partial amendment bill of the Trade Union and Labor Relations Adjustment Act during the 2nd plenary session of the 428th National Assembly (extraordinary session) held at the National Assembly in Yeouido, Seoul on the 24th. /Courtesy of News1

The Korea Foreign Corporations Association (KOFA) conducted a survey on representatives and HR personnel of 100 foreign-invested corporations that entered Korea regarding changes in investment plans after the passage of the Yellow Envelope Act. About 35.6% of the corporations responded that they are considering 'reducing investment or withdrawing from the Korean branch.' The remaining 64.4% said 'it has no effect.'

When asked about Article 3 of the Labor Union Act, which adjusts liability for damages related to strike actions, 7% responded positively, while 47% said negatively, with 46% neutral. The provision for expanding protection for strike participants received positive responses from 40%, negative from 44%, and neutral from 16%. For the provision limiting civil liability for illegal strikes, more than half (50%) of the corporations answered negatively.

The Korea Foreign Corporations Association (KOFA) is a non-profit organization established in September 1999 that has acted as a bridge between over 15,000 foreign-invested corporations in Korea and the government. It currently has about 600 member companies.

The parent company regions of the responding corporations in this survey were mainly from Europe at 53.5%, followed by North America (United States) at 22.8% and Asia at 21.8%. In terms of employee size, corporations with 100 to 299 employees made up the largest group at 27.7%, followed by those with fewer than 30 employees at 23.8%, 300 to 499 employees at 16.8%, 50 to 99 employees at 12.9%, and those with over 1,000 employees at 7.9%.

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