President Yoon had been suspended from office pending the Constitutional Court’s review of the impeachment. With the Court’s final decision, President Yoon is now permanently removed from office, effective immediately. New presidential elections will be held within 60 days, likely between 24 May 2025 and 3 June 2025.
If the ex-president’s center-right party wins those elections, the opposition center-left party will remain in firm control of the National Assembly, and the likelihood of significant near-term employment policy changes will be relatively lower.
However, if the opposition center-left party wins the upcoming presidential elections, they will have the presidency and a commanding legislative majority. Most observers expect that this would lead to significant pro-labour policy changes.
The most widely expected pro-labour reform would be enactment of the so-called ‘Yellow-Envelope Act’. This legislation was already passed by the pro-labour majority in the National Assembly, but was vetoed by President Yoon. It is widely expected that if the center-left party wins the presidency, they will enact the Yellow-Envelope Act into law.
The Yellow-Envelope Act would make several pro-union changes to the law. The most important would be to expand the definition of an ‘employer’ under Korea’s union law. Under that broader definition of ‘employer’, service recipients would be required to collectively bargain with unions representing the employees of their contractors, if they exert substantial control over those employees’ working conditions. The Supreme Court is currently considering whether the union law’s definition of ‘employer’ already encompasses such a relationship with outside-contractor employees. The Yellow-Envelope Act would resolve the issue by statute.
Other possible pro-labour reforms that could be considered include a reduction of working hours and an increase of the minimum mandatory retirement age.
There has been discussion of various proposals to reduce working hours, such as attempting to reduce weekly working days from five to four or four and a half, among other things. Unified center-left control of the government is more likely to result in one or another proposal to reduce working hours being enacted.
Increasing the minimum retirement age that employers can establish, which is currently age 60, has recently been subject to much discussion. This is actually a policy for which there is some bipartisan support, but the specifics differ among the two major parties.
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Employers should monitor upcoming electoral and legislative developments closely to ensure they are aware of any significant legal changes.
*Yulchon LLC
**Senior Advisor
