[Aftermath of the Wage Peak System] Law Firms Busy with "Impi-je Spouses"

Over 2,200 Participants Join Online Seminar... Flood of Inquiries on 'Legality and Response Measures'
"Advice on Establishing Response Strategies for Collective Bargaining and Preparing for Legal Disputes Assuming Impasse Declaration Invalidity"

[Image source=Yonhap News]

[Asia Economy Reporter Heo Kyung-jun] The top 10 law firms in Korea are consecutively holding seminars related to the wage peak system. This is a response to the increased demand for legal services following the Supreme Court’s somewhat ambiguous standard for judging the validity of the wage peak system, which states that “various circumstances must be comprehensively considered.”

According to the legal community on the 13th, the seminar held online by law firm Yulchon on the 10th attracted more than 1,500 simultaneous participants, drawing significant interest from companies and workers. The seminar held by law firm Sejong on the 9th in collaboration with the Korea Chamber of Commerce and Industry also attracted around 750 attendees. Law firm Bae, Kim & Lee is scheduled to hold a seminar on the wage peak system on the 21st, and law firm Barun plans to hold one next month.

Companies that have introduced the wage peak system are showing movements to check whether there are any issues with the wage peak system they are operating and whether improvements are needed. Companies preparing to introduce the wage peak system are receiving a flood of inquiries seeking advice on designing a wage peak system that complies with the standards set by the Supreme Court to prevent potential legal disputes in the future.

A representative lawyer from a major law firm said, “Since the Supreme Court ruling on the wage peak system, there have been many inquiries,” adding, “Requests to analyze the ruling and design response measures tailored to their companies are pouring in.”

The law firms analyzed that even for the wage peak system that maintains the retirement age, if the purpose such as employment stability for older workers and job creation for youth is legitimate, and measures to compensate for disadvantages are implemented, there is no issue of “age discrimination” pointed out by the Supreme Court.

Although the Supreme Court did not directly present criteria for judging age discrimination regarding the wage peak system that extends the retirement age, a comprehensive review of confirmed rulings and lower court precedents interprets that if the wage peak system was introduced through labor-management consultation, it is not considered age discrimination.

However, they foresee that even the wage peak system extending the retirement age could be invalidated if it unilaterally imposes disadvantages on workers, such as designing the wage reduction timing earlier as a condition for extending the retirement age.

Law firms believe that it is necessary to first check the legality of the current wage peak system operated by companies. Issues may arise regarding whether the wage peak system constitutes a disadvantageous change in employment rules and whether the consent procedure through meetings was properly conducted at the time of introduction. They also suggest establishing response strategies during collective bargaining related to the wage peak system and preparing for legal disputes assuming the invalidity of the wage peak system.

Partner lawyer Lee Seri of law firm Sejong explained, “Whether the purpose of introduction is reasonable, whether the degree of disadvantage to workers is excessively severe, and whether measures against wage reductions have been introduced will be the practical criteria for reviewing the rationality of the wage peak system.”

Additionally, law firms expect labor-management disputes related to the wage peak system to intensify. There is a high possibility of frequent class-action lawsuits led by labor unions. They also predict that the effectiveness of the existing wage peak system will become a contentious issue during collective bargaining. Furthermore, they emphasize the need to closely monitor how lower courts apply the Supreme Court ruling.