Ordinary Wage Conflicts
The court ruling on the ordinary wages of Hyundai Motor Company employees has been postponed due to the differences in the regular bonus payment criteria applied to the workers involved in the litigation. Under the circumstances, the employees are expected to receive different verdicts. Then, the labor-management talks for wage system reform, which is scheduled to be wrapped up by March next year, could go awry, and their conflicts surrounding the ordinary wage issue could explode.
At first, the Seoul Central District Court was going to deliver the ruling on Nov. 7. The lawsuit was filed by 23 workers, and four of them belong to the marketing and repair divisions, with about 9,500 other employees in the labor union. They account for 20 percent or so of the union and had worked for Hyundai Motor Service before Hyundai Motor Company took it over in 1999.
Different bonus payment criteria have been used for the two groups of employees, because the former Hyundai Motor Service workers followed their previous rules even after the acquisition. Unlike Hyundai Motor Service, Hyundai Motor Company provides a bonus for its employees only when he or she works for at least 15 days during a two-month period for bonus payments.
Back in January, the government suggested guidelines based on the Supreme Court ruling, mentioning that any bonus paid only to an incumbent worker or paid only after a certain number of working days does not constitute an ordinary wage due to the lack of fixedness. This is why the labor union and management of the company are predicting two different verdicts for the ruling scheduled for next month.
These days, many employers and employees are interpreting fixedness, one of the conditions for a regular bonus to be recognized as an ordinary wage, in different ways. As such, the controversy over the issue is likely to further intensify, depending on the court ruling next month.
In the case when the regular bonus is considered as part of the ordinary wage, Hyundai Motor Company’s annual financial burden increases by approximately 1 trillion won (US$908 million), and the amount increases by up to 3 trillion won (US$2.7 billion) for the Hyundai Motor Group as a whole. The sums skyrocket to 5 trillion won (US$4.5 billion) and 13.2 trillion won (US$12.0 billion) each when the three-year retroactive application is taken into account.