The amended Trade Union and Labor Relations Adjustment Act, commonly known as the “Yellow Envelope Act,” has been in effect since March 10, 2026. However, several months into implementation, businesses continue to face significant uncertainty over how the amended provisions will operate in practice. Questions remain regarding when a company may be deemed an “employer” of subcontracted workers and which management decisions fall within the expanded scope of “labor disputes.” The lack of clarity creates significant difficulties for companies seeking to comply with the amended Act and confusion over when to engage in collective bargaining or when ordinary management decisions could trigger labor-related disputes.
This uncertainty was highlighted again in mid-August, when President Lee Jae-myung called for clearer standards concerning the scope of labor disputes under the amended law. President Lee acknowledged that calls for more specific criteria have merit and instructed the Ministry of Employment and Labor to consider measures to provide greater clarity. The development is notable because it confirms that important aspects of the Act remain unsettled even after its implementation, suggesting that additional enforcement rules or other guidance may follow.
To manage this uncertainty, companies should seek legal advice when faced with a union demand, a collective bargaining request involving subcontracted workers, or a management decision that could potentially affect working conditions. At InterLEX, we can provide guidance when issues arise and provide clear legal advice on how to manage specific circumstances, identify areas of legal uncertainty, and guide on appropriate responses while the regulatory framework continues to develop. Early consultation may be particularly important where a company’s response could establish a precedent for future labor relations or expose the company to claims under the amended Act.
