Labor and Management Agree on Court Mediation
"Bonuses Included in Regular Wages"
38,000 Employees to Receive Payments Starting April
[Asia Economy Reporter Oh Hyung-gil] Hyundai Heavy Industries labor and management have agreed on the court's compulsory mediation regarding the ordinary wage lawsuit. With this, the ordinary wage lawsuit that has dragged on for 11 years has come to an end.
The Civil Division 1 of the Busan High Court (Presiding Judge Kim Moon-gwan) announced on the 12th that both labor and management accepted the compulsory mediation decision issued on the 28th of last month concerning the case where 10 Hyundai Heavy Industries workers filed claims against the company for additional statutory allowances based on the recalculation of ordinary wages.
The objection period was until the 17th, but the plaintiffs (workers) submitted a waiver of objection to the court on the 11th, and the defendant (Hyundai Heavy Industries) submitted a waiver of objection on the afternoon of the 12th.
Along with this, the same type of case filed by 12,437 Hyundai Heavy Industries workers was also withdrawn by both plaintiffs and defendants on the same day. As the economic mediation decision has the same effect as a final judgment, all related lawsuits have been concluded.
This lawsuit began in December 2012 when 10 Hyundai Heavy Industries workers filed claims against the company for additional statutory allowances based on the recalculation of ordinary wages. The key issue was whether the regular bonus of 700% and the holiday bonus of 100% could be considered part of the ordinary wage.
The first trial court recognized the entire 800% bonus as part of the ordinary wage and rejected the company's claim that paying retroactive wages would cause serious management difficulties.
The appellate court, Busan High Court, ruled that the holiday bonus of 100% could not be considered part of the ordinary wage, but the regular bonus of 700% could be. However, it judged that the company did not have to pay retroactive wages because doing so would cause serious management difficulties.
However, the Supreme Court ruled that even if a company is temporarily facing management difficulties, if there is a possibility of overcoming these difficulties in the future, the worker's claim for additional statutory allowances should not be easily rejected based on the principle of good faith, and sent the case back to the Busan High Court. It also ruled that the holiday bonus of 100% should be considered part of the ordinary wage.
Following this, a mediation trial was conducted under the court's arbitration, but a final agreement was not reached. However, it was concluded by accepting the court's mediation content.
The mediation content includes recalculating and paying unpaid statutory allowances and retirement benefits by including the entire bonus (800%) in the ordinary wage, in accordance with the Supreme Court's remand ruling.
A Hyundai Heavy Industries official explained, "We decided to accept the court's mediation proposal to promptly conclude the long-standing ordinary wage lawsuit and lay the foundation for a 100-year company based on a developmental and future-oriented labor-management relationship."
Accordingly, the company plans to pay the unpaid wages to current employees and retirees starting from April. The payment target is about 38,000 people, and the total payment amount is known to be about 630 billion KRW. In other words, about 38,000 current and former employees will receive an average of approximately 16.57 million KRW per person.
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