Business lobby welcomes 'Yellow Envelope Law' guidelines but flags AI, factory bargaining burden

The government released implementation guidelines for the so-called Yellow Envelope Law, drawing a cautious welcome from the Korea Federation of Enterprises, which said the rules would help improve predictability for industry — but warned that provisions leaving workforce deployment decisions open to bargaining would place an added burden on companies.

The Ministry of Employment and Labor on Thursday published guidelines on the scope of labor disputes, covering areas such as performance bonuses. The guidelines drew a clear line, stating that union demands to receive bonuses calculated as a fixed share of operating profit, or outright opposition to factory construction, would not qualify as subjects of mandatory bargaining, mediation or industrial action.

However, the guidelines said that once factory construction or the introduction of new technology reaches a stage where changes to working conditions — such as restructuring, reassignment or shift-schedule changes — can be objectively anticipated, those matters may become subject to bargaining.

The Korea Federation of Enterprises said the government's clarification that management decisions — such as performance bonuses tied to earnings and choices on investment and new technology adoption — are not subject to mandatory labor-management bargaining would help improve predictability on the factory floor.

However, the federation cautioned that leaving workforce deployment decisions linked to high-level management choices — such as building new factories or introducing AI and other new technologies — open to bargaining "could constrain companies' ability to make swift decisions and respond flexibly in a rapidly changing market environment."

It added that "particularly in industries where mega-projects requiring massive capital investment or timely business restructuring determine corporate competitiveness, the procedural uncertainty could translate into a real burden."

The federation said it hoped the guidelines would be continuously refined to minimize confusion on the ground during implementation, and called for more explicit and stable legal standards — including through enforcement decrees — to be established as soon as possible.

The Korea Chamber of Commerce and Industry also said that clarifying the criteria for strikes "appears likely to help reduce confusion in the field," but expressed concern that if the standard allowing factory construction and similar decisions to become bargaining subjects when workforce deployment is involved were applied broadly, "it could disrupt investment and management operations."