Hyundai Motor Retirees Partially Win Appeal in 'Ordinary Wage Settlement' Lawsuit

Retirees from Hyundai Motor Company filed a class-action lawsuit against the labor union and the company demanding a settlement payment (incentive) for ordinary wages, and the second trial also recognized the union's liability for damages.

According to the court on the 13th, the Seoul High Court Civil Division 15 (Presiding Judge Yoon Kang-yeol) recently dismissed both the plaintiff's and defendant's (union's) claims in the appeal trial of a damages claim lawsuit worth about 6.2 billion KRW filed by 834 Hyundai Motor retirees, including Mr. Lee, against the Hyundai Motor Branch of the Korean Metal Workers' Union and the company.

This upheld the first trial's judgment that "the union must pay 1 million KRW to each plaintiff" but did not recognize the company's responsibility.

Hyundai Motor Company Headquarters in Yangjae-dong, Seoul [Image source=Yonhap News]

Previously, the Hyundai Motor union had conducted a "ordinary wage lawsuit" for six years starting in 2013, but in 2019, the labor and management reached an agreement through wage and collective bargaining negotiations to conclude the lawsuit.

Afterward, the union withdrew the lawsuit it had filed against the company. The company paid between 2 million and 6 million KRW according to length of service under the name of "incentive for future wage competitiveness and legal stability," along with 15 shares of employee stock ownership.

However, the Ordinary Wage Countermeasure Committee, composed of retirees who left before the labor-management agreement, raised the issue that retirees were excluded from the incentive payment and filed this lawsuit in 2020.

The retirees argued, "The union started the representative ordinary wage lawsuit in 2013 and stated in the collective bargaining the following year that 'the lawsuit results would include employees at that time,' but when the labor and management concluded the ordinary wage lawsuit in 2019, retirees did not receive the incentive payment," and added, "We were not notified in any way regarding the lawsuit withdrawal."

The first trial partially recognized the union's liability for damages. It judged that including only current employees in the ordinary wage calculation and excluding retirees was an illegal act.

At that time, the court pointed out, "The defendant union had an obligation to notify the plaintiffs, who were expecting the results of the representative ordinary wage lawsuit, about the withdrawal of the lawsuit and the progress and future plans of the 2019 improvement agreement."

However, it stated, "Although the plaintiffs trusted the defendant union and believed that the wage dispute could be clearly resolved based on the results of the representative ordinary wage lawsuit, it is very difficult by the nature of the case to prove 'non-pecuniary damages' caused by being completely excluded from participation and unable to express any opinion during the withdrawal process," limiting the liability to 1 million KRW each.

Furthermore, it ruled, "The defendant company was merely an opposing party to the plaintiffs in the ordinary wage dispute. It cannot be concluded that treating current employees and retirees differently constitutes unfavorable treatment of retirees," dismissing the retirees' claims against the company.