Court Rules That Paying Bonuses Only to Regular Employees Who Retired on the Same Day Is Discriminatory

Union Agreement Cannot Justify Exclusion of Contract Workers

A court has ruled that it is discriminatory to pay bonuses only to regular employees while excluding contract workers who retired on the same day.

According to the legal community on August 25, the 11th Division of the Seoul Administrative Court (Presiding Judge Kim Junyoung) recently ruled against Hyundai ITC, a subsidiary of Hyundai Steel, in its lawsuit to overturn the Central Labor Relations Commission's decision regarding correction of discrimination.

The case arose when workers from partner companies joined Hyundai ITC in 2021 and retired in 2022 upon the expiration of their contracts. In January 2023, the company and the labor union signed a wage agreement stipulating that only employees who had worked for more than one month as of the signing date and regular employees who retired on December 31, 2022, would receive bonuses and incentive payments.

Contract workers whose contracts ended on the same day filed a complaint with the South Chungcheong Regional Labor Relations Commission, claiming discrimination, and their claim was upheld. The Central Labor Relations Commission also ruled that discrimination had occurred in its review.

The company challenged the decision in an administrative lawsuit, but the court reached the same conclusion. The court stated, "The union agreement only creates an obligation to pay wages to union members and cannot serve as grounds to exclude contract workers," adding, "According to the collective agreement signed by the union, temporary and contract employees were excluded and had no channel to participate in or influence the wage agreement."