DR & AJU Public Sector Relations Group's latest issue of its specialized legislative journal, the Policy & Business Report, is now available in digital format.
The Yellow Envelope Act and the Second Amendment to the Commercial Act have passed the National Assembly’s plenary session, led by the ruling party.
The Yellow Envelope Act, an amendment to Articles 3 and 4 of the Trade Union and Labor Relations Adjustment Act, and the Second Amendment to the Commercial Act have passed the plenary session of the National Assembly, led by the ruling party.
The key amendment expands the definition of “employer” to include “persons who may control or decide on the working conditions of workers in a detailed and practical manner, despite not being a party to the employment agreement.” It also broadens the subject of industrial disputes from “the determination of working conditions” to include “business management decisions that affect working conditions.”
After a six-month grace period, beginning early next year, subcontractor unions will be able to demand negotiations directly with prime contractors, and managerial dismissals will be recognized as grounds for industrial action.
Meanwhile, the second amendment to the Commercial Act, which introduces mandatory cumulative voting and expands the separate election of audit committee members, passed the plenary session of the National Assembly on August 25. Although the People Power Party staged a filibuster to delay the vote, the ruling Democratic Party ended the filibuster through a vote, after which the amendment immediately cleared the plenary session.
Under this amendment, companies with assets of KRW 2 trillion or more will be required to adopt cumulative voting, and increase the number of separately elected audit committee members from one to two. This follows the July amendment to the Commercial Act, which broadened directors’ fiduciary duties to encompass the protection of shareholders’ interests.
The business community has expressed concerns that the successive passage of the Yellow Envelope Act and the Commercial Act amendments will significantly threaten corporate management rights. In particular, the current provisions on breach of trust impose heavier penalties than those of major foreign jurisdictions, while the scope of the offense remains ambiguous. Under the current legal system, management may face criminal penalties when their decisions result in company losses.
The ruling party’s push for economic legislation is expected to continue into September. Several bills mandating the retirement of treasury shares held by companies have been proposed, and the Democratic Party of Korea has announced its intention to deliberate and process them during the regular session. The debate among parties is expected to be intensified.
As the first-ever Korean law firm to issue specialized legislative journals, DR & AJU Public Sector Relations Group has been publishing the monthly Policy & Business Report since August 2019. The August 2025 issue of the P&B Report conducted a full inspection of legislation proposed to the National Assembly Subcommittee, Standing Committee, and Plenary Session from the opening of the 22nd National Assembly on July 15, 2025, to August 14, 2025, and selected and analyzed legislation with significant impact on corporate activities. In the case of major legislation, key mentions of legislators, members of the Standing Committee, and government officials are included.
*DR & AJU Public Sector Relations Group provides P&B Report subscription services. Please contact us at Ic@draju.com for further inquiries.
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