[비즈한국] "Secure labor-related corporate advisory clients." This is the top priority for major law firms recently. Following the inauguration of the Lee Jae-myung administration, the government, backed by the legislative support of the dominant ruling party, is signaling a fast-track approach to processing bills sensitive to corporate management, such as the Commercial Act amendment and the Yellow Envelope Act. With the launch of the new administration, law firms have begun responding in earnest, holding back-to-back online seminars on labor policy and expanding or reorganizing their relevant teams. They are actively seeking to secure clients under the belief that legal cases are bound to increase.
Democratic Party pursues 'fast track' on Commercial Act amendment and more
The Lee Jae-myung administration and the Democratic Party plan to speed up the processing of bills sensitive to corporate management, including the Commercial Act amendment and the Yellow Envelope Act. The Democratic Party of Korea announced on the 5th that it would re-promote the Commercial Act amendment, which expands the scope of a director's fiduciary duty from just the 'company' to 'all shareholders.' The amendment also includes the so-called '3% rule,' which limits voting rights to 3% when electing auditors among the largest shareholder and their specially related parties.
A cumulative voting system will also be introduced. For large listed companies, the system allows shareholders to consolidate their voting rights during the director election process, which can prevent majority shareholders from monopolizing the election of all executive officers.
The Democratic Party plans to apply the bill immediately without a grace period once it passes. As President Lee Jae-myung emphasized during his campaign that it "should be processed within 2-3 weeks of taking office," there is a possibility that it could pass the National Assembly plenary session as early as the 12th.
The amendment to the Trade Union and Labor Relations Adjustment Act (Yellow Envelope Act) is also being pushed again. The main content of the Yellow Envelope Act is to prevent companies from holding unions liable for damages caused by illegal strikes, such as the past strikes at Hanjin Heavy Industries097230 and Ssangyong Motor. It specifies that employers cannot claim damages for legitimate industrial actions and includes issues such as non-regular workers and employment stability as subjects for industrial action.
Business sector: "Who would take the lead in opposing at the start of a new administration?"
Because of this, the business sector is on high alert. It is burdensome to strongly oppose the government so early in its term. A business sector official lamented, "The government, which was elected just a few days ago, is driving new policies with the support of the people; who would step up right now to take the lead in opposing it?" adding, "Is expressing regret by economic organizations not the only possible response?"
Major large law firms have taken active steps. They have begun responding to 'corporate client needs' by expanding and reorganizing labor teams and establishing dedicated trade union law task forces (TFs) in preparation for labor-related legal amendments. If labor-management disputes increase, the demand for corporate legal advice is also expected to grow.
Yoon & Yang recently established a 'Yellow Envelope Act dedicated TF,' while Bae, Kim & Lee recruited former Minister of Employment and Labor An Kyung-duk as an advisor last month and reinforced its organization to have its criminal and litigation teams support the existing labor compliance team. Shin & Kim also recently recruited former Vice Minister of Employment and Labor Park Hwa-jin as an advisor and is operating a 'New Government Policy TF' consisting of about 40 lawyers and advisors.
They are also holding online seminars on labor policy. Shin & Kim and Bae, Kim & Lee are each holding online seminars on the afternoon of the 9th to respond to changes in the new administration's labor policy. They intend to analyze legislative issues that could affect corporate labor environments, such as the Yellow Envelope Act, the 4.5-day workweek, and the prohibition of comprehensive wage systems, and suggest practical response strategies.
A managing partner at a small law firm explained, "Companies with strong prime contractor-subcontractor relationships, such as construction firms, and those with labor-related issues are asking for 'legal advice tailored to the launch of the new government'," adding, "As the power of unions is likely to grow over the next five years, major law firms are stepping up to meet the needs of companies looking to reduce risks in advance."
A partner lawyer at a major law firm predicted, "Labor teams were reinforced during the Moon Jae-in administration due to the Serious Accidents Punishment Act, but now with the launch of the Lee Jae-myung administration, they are being strengthened because of the Yellow Envelope Act," and added, "The market value of lawyers with significant labor-related experience will rise."