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The Revised Yellow Envelope Act Is Now in Effect: The First Thing You Need to Check
Key Changes to Articles 2 and 3 of the Labor Union Act (Yellow Envelope Act) “Does this mean our company could now be held responsible for issues involving subcontractor employees?” This is a question increasingly being raised in real business environments. The revised Yellow Envelope Act, which took effect on March 10, 2026, is not merely a technical amendment to statutory language. It represents a major institutional shift that strengthens the authority of labor unions and fundamentally redefines the scope of employers’ responsibilities. The key changes introduced by the amendment include: Substantial expansion of the definition of “employer” Expansion of the scope of recognized labor disputes New grounds for reducing or limiting damages claims against labor unions Ultimately, the core implication is clear: labor unions now possess broader bargaining power, while companies face increased legal responsibility. As a result, companies must comprehensively review their contractual structures and internal decision-making processes, while labor unions must prepare lawful response strategies aligned with their newly expanded authority. The extent of advance preparation will ultimately determine the scale of future legal risk. The following response measures therefore deserve close attention. Key Response Points for Companies and Labor Unions Through this amendment, the scope for recognizing a principal contractor as an employer has broadened significantly, while limitations on damages claims have substantially changed the landscape of labor-management relations. From the corporate perspective, companies must carefully assess the extent to which they exercise control over working conditions within indirect employment structures such as subcontracting and outsourcing arrangements. If a principal contractor substantially influences employees’ working conditions, bargaining obligations may arise. Accordingly, companies may need to revise contractual provisions and approval procedures. In workplaces where multiple labor unions exist, it is also essential to establish strategies for responding to successive bargaining requests. To address these issues, companies should establish: Standards for unified bargaining channels Internal information disclosure procedures Response systems for damages claims arising from lawful labor disputes From the labor union perspective, direct bargaining channels with principal contractors are becoming more accessible, and the burden of damages liability during lawful labor disputes has been reduced. As a result, the legality of bargaining procedures and the efficiency of organizational strategies have become increasingly important. In essence, the amendment establishes a new standard for both labor and management: “clear responsibility and transparent procedures.” Whether adequate preparation is undertaken now will become the most important factor in determining future dispute risks. Why Work With Decent Law Firm? The revised Yellow Envelope Act is not simply about changes to statutory provisions. It is a major issue requiring companies to redesign their entire decision-making structures and labor-management communication systems. In situations like this, businesses need professionals who understand not only legal theory, but also operational realities and practical risk factors in the workplace. Decent Law Firm operates a dedicated team specializing in corporate advisory services and labor risk management, providing practical solutions in the following areas: Employer status analysis and legal risk assessment Design of bargaining and labor dispute response structures Damages liability risk control strategies Advisory services regarding collective bargaining agreements and internal policy revisions Decent Law Firm goes beyond providing abstract legal interpretations. We act as a practical partner helping businesses maintain stable labor-management relations even after the revised law takes effect. If your organization needs practical and immediately applicable response measures, now is the time to begin preparing with Decent Law Firm. Ultimately, This Is an Unavoidable Process of Change At this stage, the key response strategy is to accurately understand the purpose of the revised system, reduce unnecessary disputes, and ensure that necessary bargaining procedures become more transparent. At Decent Law Firm, consultations are conducted directly by attorneys who are also certified labor consultants, as well as legal professionals with extensive corporate operational experience. We help both companies and labor unions respond in predictable and legally sound ways while preserving the intent of the law. With sufficient case analysis and properly documented procedures, risks can be managed in advance. Before it becomes too late, it is important to seek professional legal guidance and prepare strategically.
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Termination of Regular Employees: Key Requirements, Procedures, and Legal Considerations
What Can Make the Termination of a Regular Employee Unlawful? Under the Labor Standards Act, the termination of a regular employee is only valid when strict legal requirements are satisfied. An employer must have just cause for termination, provide the employee with a meaningful opportunity to explain or defend themselves before dismissal, and issue a written notice of termination. In cases involving managerial or business-related dismissals, additional requirements must also be satisfied, including: Urgent managerial necessity Efforts to avoid dismissal Reasonable standards for selecting employees subject to termination Prior notice to employee representatives at least 50 days before dismissal and sincere consultation procedures In practice, there are many cases where disciplinary procedures are carried out only formally, or where employees are pressured into submitting resignation letters, effectively inducing termination in substance. Even in such cases, the termination may still be considered unfair dismissal when the actual circumstances are examined. The legality of terminating a regular employee is not determined solely by the employer’s claims. Objective evidence and procedural fairness are the key factors. What Must Be Prepared Immediately After Receiving a Notice of Termination If you receive a notice of termination, it is important to avoid emotional reactions and systematically secure relevant evidence, including: Personnel appointment or transfer documents Notices regarding disciplinary committee proceedings Messages encouraIn addition, applications for relief before the Labor Relations Commission must generally be filed within three months from the date of dismissal pursuant to Article 28(2) of the Labor Standards Act. The three-month period is generally calculated based on the termination date stated in the notice of dismissal. However, if the notice lists a termination date that has already passed, the period may instead be calculated from the date the employee actually received the notice. It is also important to establish clear objectives and legal strategies, such as: Claims for wages equivalent to lost earnings Requests for reinstatement to the original position Without proper preparation, there is a significant risk that the employer’s arguments may prevail, leading to an unfavorable outcome. Why Legal Representation Matters Labor disputes involve both emotional and complex legal elements. Employers typically respond with the support of internal documentation and legal counsel. By contrast, employees who respond alone often face difficulties fully asserting their rights due to procedural mistakes or insufficiently organized arguments. In termination cases involving regular employees, it is necessary to carefully dispute issues such as: The specificity and legitimacy of the grounds for dismissal Whether the principle of proportionality was violated Whether the disciplinary measures imposed were appropriate A consistent strategy must also be established with future proceedings in mind, including: Applications for relief before the Labor Relations Commission Appeals before the National Labor Relations Commission Subsequent administrative litigation Professional legal intervention is therefore not merely about drafting documents — it is about determining the overall direction and strategy of the case. Decent Law Firm’s Legal Support In cases involving the termination of regular employees, Decent Law Firm structures the factual background of the case from the initial consultation stage and designs evidence preservation strategies tailored to the dispute. We also provide systematic support throughout the entire process, including: Applications for relief before the Labor Relations Commission Analysis of employer response submissions Hearing preparation and litigation strategy development Based on our understanding of corporate HR structures and disciplinary procedures, we proactively anticipate employer arguments and prepare effective counterpoints in advance. The termination of a regular employee is a critical turning point that can affect an individual’s career and livelihood. It is not a matter that should be delayed or approached lightly. Legal rights ultimately belong to those who actively assert them. Prompt and strategic action is often what determines the final outcome.
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Must-read if you are wondering how to review an employment contract and respond effectively
Why an employment contract is not a mere “formality,” but a risk-management document Employment contracts are often treated as formal documents used simply to complete the hiring process. In reality, however, a significant number of labor disputes originate from the wording of the contract itself. In many cases, contracts are formally executed but contain provisions that fail to meet the standards set by the Labor Standards Act and other relevant laws, or they repeatedly use clauses where the actual working conditions differ from those stated in the contract. In practice, once a dispute arises, the rights and obligations of the parties—and the scope of liability—are determined based on the working conditions specified in the employment contract. For this reason, reviewing an employment contract should not be viewed as damage control after a problem occurs, but as a preventive measure designed to block disputes from arising in the first place. This process is not a simple document check; it is the starting point for managing legal risks that may persist for years. Key clauses that most frequently cause problems in employment contracts Clauses that lead to disputes tend to follow consistent patterns. If the structure of wages is unclear—such as the distinction between base salary, bonuses, and various allowances (overtime, night work, holiday work, etc.)—disputes often arise during the calculation of ordinary wages, average wages, and retirement benefits (Labor Standards Act Article 2(1)5 and 6). Dispute risk also increases when provisions regarding prescribed working hours, overtime, night work, and holiday work are drafted in broad or vague terms rather than with sufficient specificity. In particular, comprehensive wage systems (fixed overtime pay systems) are frequently applied in form only, without satisfying the required conditions—such as difficulty in calculating actual working hours—resulting in especially high legal risk (see Supreme Court Decision, May 20, 2010, 2008Da6052, among others). Issues also commonly arise where the title of a worker—such as fixed-term employee or freelancer—does not match the actual nature of the work performed, leading to disputes over employee status. Likewise, unclear standards for contract expiration, termination, or renewal repeatedly become sources of conflict (Act on the Protection of Fixed-Term and Part-Time Employees, Article 2(1)). Ultimately, the core issue is not whether a clause exists, but how it is drafted, which is precisely why a proper employment contract review is necessary. When is an employment contract review necessary? The most effective time is before entering into the contract, specifically just prior to signing. Review is also critical when a contract is renewed, working conditions are changed, or personnel and compensation systems are restructured. It is likewise necessary when discrepancies emerge between the terms stated in the contract and how they are actually implemented—particularly with respect to wages, retirement benefits, and working hours—or when early signs of dispute appear. Conducting an employment contract review in advance, rather than after a dispute has already arisen, can significantly reduce legal costs and risks. For those who feel uncertain or anxious due to legal ambiguity surrounding their employment contract, it is important to understand that professional review at an early stage can decisively influence the outcome of any future dispute. Conversely, delaying proper review and response may expand the scope of legal liability or make dispute resolution more difficult, requiring a cautious and proactive approach. Decent Law Office’s approach to employment contract review Decent Law Office does not stop at refining wording. Each clause is analyzed for risk based on real labor disputes and judicial precedents, with a focus on structural vulnerabilities that could lead to conflict. Furthermore, the firm considers response strategies that can be immediately implemented should a dispute arise in the future. Through this approach, employment contract review becomes not a one-time procedure, but an ongoing risk-management tool. An employment contract is not a document to consult after a dispute occurs—it is a document designed to prevent disputes from occurring at all. With Decent Law Office, a single employment contract review can reduce long-term accumulated legal risks, and that choice ultimately protects both the organization and the individual.
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Outcomes Differ Depending on How a Severance Pay Attorney Responds
Why Do Severance Pay Disputes Keep Repeating? The primary causes of severance pay disputes lie in disagreements over the continuous service period and the method of calculating average wages. In practice, it is common to see cases where the contractual employment period is shortened despite the actual work performed, or where bonuses and various allowances are excluded from wages. Employers often justify their calculations based on internal rules or customary practices, but legal standards frequently lead to entirely different conclusions. These discrepancies are difficult for individuals to assess on their own, often resulting in employees accepting unfair settlements as they are. At this stage, review by a severance pay attorney allows for an objective assessment of whether recalculation under statutory standards is possible. Settlement Agreements and Confirmations: What Must Be Reviewed Before Signing Settlement agreements or confirmations presented during the resignation process are not mere procedural documents; they are legally binding instruments that can determine whether future rights may be exercised. In particular, the following elements must be reviewed individually before making a decision: Key Items to Review in Severance Settlement Agreements Whether the agreement includes any waiver of claims Whether the basis for severance pay calculation is clearly explained Whether the payment amount is appropriate compared to statutory standards Whether the agreement was reached without sufficient disclosure of information Whether the subject and scope of the agreement are clear and specific Even if only some of these elements are lacking, the validity of the agreement may be contested. In particular, agreements entered into due to mistake or deception may be subject to rescission (Supreme Court of Korea, December 12, 1995, Case No. 94Da22453). Failing to review these issues before signing may result in voluntarily relinquishing recoverable rights. Therefore, prior to signing any agreement, it is essential to accurately analyze the meaning and legal effect of its terms. At this stage, whether a severance pay attorney conducts a pre-signature review becomes a key factor determining the scope of future remedies. How Timing and Procedural Choices Affect Outcomes In severance pay disputes, outcomes can vary significantly depending on when and how a response is made. The longer the delay, the more difficult it becomes to secure evidence, and rights may become unenforceable due to the expiration of the statute of limitations. In particular, the following factors must be reviewed comprehensively: Key Considerations When Determining Timing Changes in the availability of evidence The employer’s response posture Risks of statute of limitations expiry and loss of evidence The strategic importance of early judgment How Procedural Choices Shape the Response Strategy When administrative procedures are appropriate When litigation is necessary For individuals experiencing anxiety while facing this issue alone, the initial choice of procedure often provides the most practical assistance. Conversely, postponing action may result in the statute of limitations expiring, making enforcement impossible. Severance pay disputes should never be taken lightly. At this critical decision point, strategic planning with a severance pay attorney is what ultimately creates meaningful differences in outcomes. How Decent Law Firm Assists Based on extensive practical experience in labor disputes, Decent Law Firm conducts systematic analysis of severance pay cases. In particular, labor law attorneys who are former certified labor consultants are directly involved, carefully reviewing wage components and employment relationship interpretations from both practical and statutory perspectives. Rather than merely explaining legal provisions, we establish a consistent strategy that encompasses fact organization, evidence structuring, and procedural responses. Restoring rights after resignation depends heavily on timing and strategic direction. Before it becomes too late, we encourage you to correct unfavorable situations through the assistance of a qualified severance pay attorney.
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If You Need Assistance from a Labor Law Specialist, Read This Carefully
1. In Labor Disputes, a Single Misstep Can Alter the Course of Your Life Labor disputes are not merely “disagreements with an employer.” An unjust dismissal or excessive disciplinary action can lead to permanent career disruption. Unpaid wages may escalate into criminal complaints or civil litigation. In cases involving serious industrial accidents, business owners or executive officers may face criminal liability under the Serious Accidents Punishment Act (Article 2, Paragraph 9 of the Act on Punishment of Serious Accidents, etc.). In particular, labor disputes cannot be resolved by reviewing the Labor Standards Act alone. Multiple statutes operate simultaneously, including the Trade Union and Labor Relations Adjustment Act, the Occupational Safety and Health Act, and the Serious Accidents Punishment Act. Depending on the initial response strategy, administrative sanctions, criminal liability, and civil damages risks can compound rapidly. The most dangerous decision at this stage is thinking, “I’ll try to handle this on my own.” The anxiety and pressure you are feeling right now are not excessive. Once the direction of a labor dispute is set incorrectly, it is extremely difficult to reverse—and the consequences are far heavier than most expect. This is why early involvement of a labor law specialist is often the decisive starting point. 2. If Any of the Following Apply, You Are Already in the Middle of a Labor Dispute Labor disputes do not occur only in exceptional cases. If any of the situations below apply to you, your circumstances are likely already subject to legal evaluation. You have received notice of unfair dismissal or disciplinary action, or you are being pressured to resign Wages, severance pay, or overtime/night/holiday pay have not been properly paid You are facing issues related to workplace harassment or sexual harassment, or an internal investigation is imminent You are classified as a freelancer or platform worker and are denied protection under the Labor Standards Act due to the contract structure Liability issues have arisen following an industrial accident You have received notice from the Ministry of Employment and Labor (local labor office or branch) regarding a complaint investigation, labor inspection, or criminal case initiation Although these cases may appear similar on the surface, the applicable laws and standards of proof differ significantly. Missing the right timing or choosing the wrong strategy can leave adverse records, which may hinder you throughout all subsequent proceedings. At this stage, the role of a labor law specialist is not merely that of a representative, but rather a coordinator who determines how far legal risk can be controlled. 3. Common and Critical Mistakes Repeated in Labor Disputes This section addresses recurring errors frequently seen in practice. Typical examples include responding emotionally and leaving legally disadvantageous messages through texts or messaging apps, or filing complaints before labor authorities without adequately organizing facts and evidence. Another frequent mistake is choosing the wrong order among criminal, administrative, and civil procedures, thereby narrowing one’s own legal position. These errors may seem minor, but they can lead to irreversible consequences. This is precisely why early involvement of a labor law specialist is essential. 4. How Decent Law Firm Provides Support – Controlling Labor Risk Decent Law Firm does not approach labor cases as isolated disputes. We structure evidence with investigations and litigation in mind, and design the overall case flow through procedural risk analysis at each stage. In particular, cases are led by Attorney Junhyung Park, who is also a Certified Labor Attorney, with extensive experience in both major law firm labor teams and labor consulting firms. This ensures a consistent and integrated approach where legal and labor issues are not treated separately. Drawing on experience representing both employers and employees, we provide realistic options tailored to each case, while managing complex risk factors linked to labor management, accounting, and industrial accident matters. Our goal is not to offer abstract explanations, but to deliver response strategies that lead to tangible results for clients facing anxiety and pressure due to labor issues. Labor disputes can escalate into irreversible burdens the moment the initial direction is misjudged. For this reason, professional control from the very beginning is essential. Decent Law Firm is committed to providing tailored, controllable solutions—focused not on inflaming disputes, but on managing them strategically for each client’s specific situation.
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Key Issues Companies Must Understand Regarding Wage Peak Systems
Concept and Legal Nature of the Wage Peak System A wage peak system is a scheme under which an employee’s wages are gradually reduced after reaching a certain age, in exchange for maintaining or extending employment until the mandatory retirement age. Against the backdrop of an aging workforce and policies favoring longer employment, many companies adopt wage peak systems as a means to mitigate rising labor costs. However, this system is not merely an internal HR policy. Because it entails a fundamental change to core working conditions, operating a wage peak system without proper legal review can expose a company to significant dispute risks. Not all wage reductions are justified simply by labeling them as a “wage peak system.” Whether such a system is lawful depends on how it is designed and implemented in practice. Companies are therefore advised to carefully review the points below before proceeding. Key Legal Issues in Practice In practice, the problematic issues are quite clear: Whether wage reductions based on age constitute “unreasonable discrimination” prohibited under the Act on Prohibition of Age Discrimination in Employment and Promotion of Employment of Older Persons Whether the scale of wage reduction and the period of application are excessive Whether corresponding measures—such as reductions in workload, responsibilities, or changes in job duties—have actually been implemented to offset the wage reduction Many companies focus solely on adjusting wages, while treating accompanying measures such as workload reduction, job reassignment, or reduced working hours as a mere formality—or failing to implement them altogether. In such cases, the wage peak system can become the starting point of serious disputes, regardless of its stated purpose. These issues often extend beyond labor disputes and escalate into civil claims for unpaid wage differentials, making them far from trivial. Summary of Supreme Court Standards In determining the validity of a wage peak system, the Supreme Court comprehensively considers the following factors (Supreme Court Decision dated May 26, 2022, Case No. 2017Da292343): The legitimacy of the purpose for introducing the wage peak system The extent of disadvantage suffered by the affected employees Whether measures corresponding to the wage reduction were introduced, and whether such measures are appropriate Whether the financial resources saved through the wage peak system were used for its original intended purpose If any one of these elements is lacking, the wage peak system may be deemed invalid as age-based discrimination. In practice, there have been numerous cases where companies were required to retroactively pay substantial amounts of unpaid wages despite having implemented such systems. In particular, Korean courts distinguish between “retirement-extension-type” and “retirement-maintenance-type” wage peak systems. Where wages are reduced without extending the retirement age (the retirement-maintenance type), the likelihood of invalidation is significantly higher unless a clear and reasonable justification exists. Such systems therefore require especially careful design. Ultimately, a wage peak system that merely satisfies formal requirements can result in serious financial and legal liabilities for the company. Practical Checkpoints for Companies and Decent Law Firm’s Support When operating a wage peak system, companies should comprehensively review the following points: Whether amendments to the rules of employment were properly approved in accordance with Article 94(1) of the Labor Standards Act, including obtaining consent from a labor union representing a majority of employees Whether individual consent from affected employees is required Whether substantive and practical measures corresponding to wage reductions have been established and are actually being implemented Even if a wage peak system is already in place, it is necessary to reassess whether the current operation complies with judicial standards. Responding after a dispute has arisen inevitably involves higher costs and risks. Accordingly, conducting legal review at the system design stage or during operational audits is the most practical way to protect the company. Decent Law Firm provides practical legal support tailored to each company’s organizational structure and HR framework, drawing on extensive advisory and dispute resolution experience with wage peak systems, led by attorneys with prior labor law and HR expertise. If your company is already involved in this issue or requires proactive risk management, we strongly recommend seeking legal advice—even on a preliminary basis.
