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Introduction of Wage Peak to be Allowed without Labor Union Consent
Unilateral Move
Introduction of Wage Peak to be Allowed without Labor Union Consent
  • By Jung Suk-yee
  • May 28, 2015, 07:00
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The Ministry of Employment & Labor disclosed its guidelines as to the modification of the rule of employment on May 27. According to the guidelines, the wage peak can be adopted by employers, even without the consent of employees, on condition that the former has done their best to obtain consent.

“There are various opinions concerning the advantages and disadvantages of the wage peak following the extension of the retirement age to 60, but any modification of the rule of employment serving the purpose of smooth corporate operations and job creation for the young has to be considered socially acceptable as stated in Supreme Court precedents, and employees need to remember even they can benefit from the modification since it comes with not just a wage peak but also retirement age extension,” it explained. It also added, “On the contrary, labor unions’ or employees’ opposition without alternative to new wage systems properly designed by their employers willing to obtain their consent should be deemed socially unacceptable, and the disadvantages on the workers’ part should be seen as rather limited, if the reduction in salary caused by the wage peak is not excessive.”

The ministry also remarked that job rotation and merit pay are two of the options from which employers can choose. “Job rotation without the purpose of wage cuts should not be considered disadvantageous to employees, and the same view is applied to merit pay, which we see is based on employers’ business decisions in the interest of labor management efficiency and productivity improvement,” it went on, continuing, “Still, measures leading to the deterioration of working conditions such as a uniform reduction in salary based on a new calculation or evaluation method will be regarded as disadvantages to employees.”

The labor community, opposed to the guidelines, is planning on a rally and hearing boycott. It said it would go on a general strike if the government pushed ahead with labor market restructuring based on the guidelines.