Special Allowance for Non-Strikers an 'Unfair Labor Practice'?... Court Says "Legitimate Compensation"

"Should Be Respected as a Rational Business Decision by the Employer"

The court has ruled that special allowances paid to employees who worked during a strike do not constitute an unfair labor practice.

According to the legal community on November 10, the Seoul Administrative Court's 13th Administrative Division (Presiding Judge Jin Hyunseop) recently ruled in favor of the plaintiff in a lawsuit filed by foreign chemical materials manufacturer Company A against the Chairperson of the Central Labor Relations Commission, seeking to overturn a retrial decision regarding unfair labor practices.

In October last year, when the Ulsan and Jincheon branches of the Chemical Fiber and Food Industry Union went on a full-scale strike, Company A paid a "special allowance" in addition to overtime pay to employees who did not participate in the strike and performed substitute work. In response, the union filed for relief, claiming that this constituted an unfair labor practice by favoring non-striking employees. The Central Labor Relations Commission determined that the special allowance paid to some workers was excessive and recognized it as an unfair labor practice.

However, the court overturned the commission's decision, stating, "If the employer paid the special allowance within a reasonable range, it should be respected as a rational business decision."

The court explained, "More than half of the production workers at the Ulsan plant participated in the strike, which forced the remaining employees to switch from a four-shift, three-team system to a two-shift, two-team system, significantly increasing their workload." The court added, "The special allowance, calculated at 50%, is equivalent to the statutory overtime premium under the Labor Standards Act and cannot be considered excessive."

Furthermore, the court noted, "The special allowance was paid about a month after the strike ended, and it is difficult to view this as an attempt to induce employees not to strike or to interfere in union operations." The court concluded, "The Central Labor Relations Commission's retrial decision, which deemed the payment of the special allowance to be an unfair labor practice, is unlawful."