South Korean guidelines restrict labor bargaining scope, sparking rights concerns

The South Korean government issued guidelines on September 3 restricting collective bargaining and dispute targets under the "Yellow Envelope Act," excluding performance bonuses tied to operating profits and business management decisions, sparking controversy over violations of labor rights. The Ministry of Employment and Labor specified that demands for performance pay linked to sales, operating profit, or net income are not subject to mandatory bargaining, targeting unions at Samsung Electronics and SK Hynix. It argued such demands constrain business freedom, recommending fixed-amount or salary-ratio formulas instead. Decisions like factory construction or AI adoption alone cannot be disputed, unless concrete labor condition changes are confirmed. Labor groups criticized the guidelines as arbitrary and undermining union rights, urging their withdrawal. Experts said the government's classification violates the principle of autonomous labor-management bargaining, warning it could escalate conflicts by delaying negotiation timing until after management decisions are finalized.