Industry in Crisis
The Seoul Central District Court ruled that the regular bonuses and lunch expenses paid to Kia Motors workers should be regarded as constituting their ordinary wages. Under the circumstances, a large number of ordinary wage suits are likely to follow in many other companies in various industries.
According to the Bareun Party, a total of 192 companies with at least 100 employees each were engaged in ordinary wage suits between 2013 and the end of June this year and the litigation is still going on in 115 out of them.
“The ruling is likely to have a serious negative impact on the numerous small and medium-sized enterprises that are partnering with Kia Motors, and then the manufacturing sector of South Korea will be significantly affected,” the Korea Employers Federation (KEF) commented after the ruling.
According to a KEF report released in 2013, South Korean enterprises have to bear an additional financial burden of up to 38.5509 trillion won once regular bonuses are included in the scope of ordinary wage. Some experts pointed out that the ruling could have a negative effect on workers as well in the long term although it can be seen as a judgment in favor of employees.