The Yellow Envelope Law (amendment to Article 2 and 3 of the Act on Trade Unions and Adjustment of Labor Relations) has been approved by the Cabinet after passing in the National Assembly, and tension is rising in the gaming industry. Given the nature of the gaming industry, where development subsidiaries and specialized outsourcing companies collaborate to produce games, the possibility of escalating labor-management conflicts has increased as a path for them to demand negotiation rights is opened. As a result, the industry is concerned about adverse effects such as delays in new game development schedules.
According to political circles on the 3rd, President Lee Jae-myung approved the Yellow Envelope Law at the Cabinet meeting the day before. This law was enacted after passing in the plenary session of the extraordinary National Assembly held on the 24th of last month, and it will take effect six months after the date of its promulgation.
The Yellow Envelope Law centers on limiting damage claims for illegal strikes and strengthening the primary employer's responsibilities towards indirectly employed and contracted workers. In particular, this law regards 'those who can substantially decide working conditions' as the employer. This means that unions composed of subcontracted workers, as well as those from subsidiaries or affiliates who do not have direct employment contracts, can now demand negotiations from the parent company. As a result, confusion due to the expanded scope of employers seems inevitable.
As the implementation of the Yellow Envelope Law approaches, the gaming industry is also on edge. In the gaming industry, game development is structured around a division of labor between the publisher (the primary contractor) and the developer (the subcontractor). Until now, game companies have entrusted projects to development subsidiaries and specialized outsourcing firms, with publishers determining the schedules, budgets, styles, and more for new releases. However, following the implementation of the law, there is a significant possibility that publishers will be deemed to have substantial control over the working conditions of their subsidiaries and outsourcing firms. As a result, publishers could receive demands for negotiations from the subsidiaries' or outsourcing firms' unions, and refusal could lead to sanctions such as criminal penalties for unfair labor practices. The previous structure, which allowed them to evade responsibilities through simple contract termination, will effectively become impossible.
The issue is that speed and flexibility are key characteristics of the gaming industry. New releases need to quickly provide vast amounts of text, illustrations, voice recordings, and update content in order to achieve success in a short period. However, if the subsidiaries or outsourced unions exercise their right to dispute over schedule delays or modification requests after the law's implementation, the release of new games is likely to be delayed. There are concerns that this could also impact the mid- to long-term strategies of gaming companies. Recently, domestic gaming companies have expanded the establishment of development subsidiaries, equity investments, and publishing contracts to globalize and diversify genres, leading to concerns that the Yellow Envelope Law could hinder their progress.
In the gaming industry, amid the ongoing indefinite strike by the NeoPla union, which is a game development subsidiary of Nexon, there is an expectation that similar cases will increase in the future. The NeoPla union claims that while the company profited from the Chinese launch of 'Dungeon & Fighter Mobile,' the compensation for employees was not properly provided. The union is urging accountability not from NeoPla, but from the parent company Nexon, which holds the real decision-making power.
A gaming industry official noted, 'Creating just one new game often involves dozens of partner companies, and if we have to open negotiation tables with each of them, it becomes difficult to manage schedules.' He added, 'The speed and quality of new releases are competitiveness in the global market, and if domestic regulations increase, we can only fall behind in market leadership.'