[Aftermath of the Wage Peak System] "Demanding from Management"... Growing Labor Movement Calls for Abolition of the Wage Peak System

Significant Increase in Inquiries About Wage Peak System
Workers at Large Corporations and Public Institutions Demand Abolition of Wage Peak System
Financial Union KB Kookmin Bank Branch and KCTU Metal Union POSCO Chapter Prepare Lawsuit

On the 8th, officials from the Public Institution Business Headquarters held a press conference in front of the Presidential Office in Yongsan-gu, Seoul, urging the abolition of the wage peak system guidelines and demanding labor-management negotiations. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Gong Byung-sun] Since the Supreme Court's ruling on the wage peak system, labor groups have been raising their voices for the abolition of the system. This trend is also leading to actual movements, such as preparing for legal battles.

According to labor groups on the 10th, the two major labor unions, the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU), welcomed the Supreme Court's ruling on the wage peak system and are known to support the abolition movement. On the 2nd, the FKTU issued a statement titled "Response Direction to the Supreme Court Ruling on the Wage Peak System," stating, "Unions should support lawsuits filed by their members and actively demand abolition or supplementary measures from management." The KCTU also expressed a welcoming stance on the wage peak system ruling and is known to support the unions.

The wage peak system refers to a system that reduces wages of workers who have reached a certain age in exchange for job security or extension of retirement age. On the 26th of last month, the Supreme Court ruled in a lawsuit filed by a worker at the Korea Electronics Technology Institute that reducing wages solely based on age without reasonable grounds is invalid.

After the Supreme Court's ruling, inquiries related to the wage peak system have been pouring into the labor unions. A FKTU official stated, "Inquiries related to the wage peak system, which were previously rare, have increased to about 2 to 3 cases per day," adding, "Usually, older individuals make these inquiries." Those making inquiries typically ask whether the wage peak system at their workplace is illegal or if future lawsuit support is possible.

These inquiries are leading to actual union actions. The Samsung Electronics Labor Union Joint Negotiation Team sent an official letter to management demanding the abolition of the wage peak system the day before. The Joint Negotiation Team is a group consisting of four unions within Samsung Electronics. Through the official letter, the team stated, "The current wage peak system, which operates solely based on age without changes in work type or duties, is clear discrimination." In addition, unions under large corporations such as SK Hynix and Hyundai Motor Company are also reported to be demanding the abolition of the wage peak system from management.

Public institution workers have also demanded the abolition of the wage peak system. On the 8th, the Public Institution Headquarters of the Public Transport Union under the KCTU held a rally in front of the Yongsan Presidential Office, stating, "The Supreme Court has judged that the wage peak system violates the law and is invalid," and "The government should abolish the wage peak system guidelines and engage in direct negotiations with the unions."

Legal actions are also expected to continue in the future. The KB Kookmin Bank branch of the Financial Union plans to recruit members for a wage peak system lawsuit group by the end of this month and proceed with the lawsuit. It is known that they are currently collecting related materials for the lawsuit. The POSCO branch of the Metal Workers' Union under the KCTU is also preparing a lawsuit to invalidate the wage peak system. The POSCO branch explained through an internal newsletter, "In the case of POSCO, it is judged that the possibility of winning is high due to the appropriateness of the target measures."