KCCI and Law Firm Sejong Webinar
Sharing Upcoming Supreme Court Cases and Discussing Countermeasures
On the 19th, the Korea Chamber of Commerce and Industry held an online webinar titled '2024 Labor Judgments to Watch and Corporate HR Labor Strategy' in collaboration with the law firm Sejong.
During the webinar, cases scheduled to be ruled by the Supreme Court this year were shared, including whether management performance bonuses should be included in the average wage, the validity of the employment condition for excluding ordinary wages, and the obligation of the primary contractor to engage in collective bargaining with subcontractor unions. Discussions also covered measures to prepare for judicial risks related to wages and labor-management relations.
Dongwook Kim, a partner lawyer at Sejong, pointed out regarding the inclusion of management performance bonuses in the average wage, "If the Supreme Court recognizes management incentives as wages, they will be included in the average wage, which forms the basis for calculating severance pay and suspension allowances, significantly increasing corporate burdens and potentially causing a second 'ordinary wage' crisis."
He also stated, "Since the Supreme Court has already ruled several times that public enterprise management performance bonuses qualify as wages, there is a possibility of similar rulings for private companies in the future. It is necessary to closely monitor this and take proactive measures to minimize wage risks."
Regarding cases dealing with whether bonuses and other salary items paid only to employees currently in service should be included in ordinary wages, he predicted, "If the Supreme Court changes its stance on ordinary wages for employment-condition-based pay, it will be a huge blow to companies that have built their wage systems trusting the existing 'exclusion' position, making it difficult to avoid conflicts and confusion."
There was also mention of the possibility that provisions recognizing the primary contractor's employer status under the 'Yellow Envelope Act' (amendments to Articles 2 and 3 of the Labor Union and Labor Relations Adjustment Act), which was vetoed by the president last year, could effectively be legislated through Supreme Court precedents.
Recently, a lower court ruled that CJ Logistics, as the primary contractor, is the actual employer of delivery workers and must directly engage in collective bargaining with the delivery workers' union. This judgment was upheld in the appellate court following the first trial.
Lawyer Kim said, "If the Supreme Court sides with the union, the primary contractor will have to negotiate individually with subcontractor unions, and subcontractor unions will be able to conduct strikes and other dispute actions at the primary contractor's workplaces, effectively enacting the Yellow Envelope Act. This will have significant ripple effects not only on labor relations but also on corporate production methods."
Additionally, the webinar discussed judicial risks and rulings related to issues such as worker status, the validity of wage peak systems, the validity of comprehensive wage systems, standards for workplace harassment, and issues concerning reinstatement after parental leave.
Ilho Yu, head of the Employment and Labor Policy Team at the Korea Chamber of Commerce and Industry, said, "Alongside geopolitical risks and the global economic crisis, prolonged domestic demand stagnation is putting companies in a difficult situation, and judicial risks in the labor sector are increasing uncertainty. We hope for Supreme Court rulings that resolve judicial risks to enable stable corporate management, investment, and job creation."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
