A Seoul court on Friday ruled that Hyundai Motor did not have to include irregular bonuses in the calculation of base wages, after a two-year legal battle with the company’s hard-line labor union on its home turf.
In March 2013, 23 members of Hyundai’s union filed a lawsuit demanding bonuses and other benefits be considered “ordinary pay,” which is used to calculate everything from overtime payments to annual raises.
The Seoul Central District Court said Friday that bonuses paid to only two unionists, who were from Hyundai Auto Service that was merged into the carmaker in 1999, should be considered ordinary pay.
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| Hyundai Motor vehicles bound for export await shipment at a port near the company’s plant in Ulsan. (Korea Herald file photo) |
The court said, however, bonuses paid to the 21 other plaintiffs who have been working at Hyundai Motor and Hyundai Mobis cannot be seen as “regular,” citing the companies’ wage scheme that pays bonuses only to workers hired for more than 15 days.
“If bonuses are paid to a limited number of workers, the payment lacks regularity and should not be considered as part of ordinary pay,” the court said in its ruling.
Following the ruling, Hyundai was ordered to pay additional wages worth 10 billion won ($9.2 million) to some 5,700 former Hyundai Motor Service workers, about 11 percent of the carmaker’s some 60,000 unionists.
The figure is a huge reduction from the potential 5 trillion won that Hyundai would have had to pay in the first year alone had the ruling swung in the union’s favor.
“The ruling acknowledged the fact that there are certain conditions for a regularized bonus payment to qualify as an ordinary wage,” the company said in a statement.
“We believe that the case has set the grounds for labor-management to solve the long-running ordinary wage issue.”
The union said the workers were considering whether to appeal. “It is a shame that only a fraction of our members have been acknowledged,” union leader Lee Kyung-hoon said.
The Hyundai case drew keen attention from business circles because if sustained, the ruling on the nation’s largest carmaker could have a greater impact on other smaller companies and their suppliers. Similar lawsuits were expected to follow if the labor union won.
The controversy over ordinary wages was sparked after a landmark ruling by the Supreme Court in 2013 that bonuses should be viewed as part of a worker’s wages if given on a regular and periodic basis.
Although smaller carmakers like Renault Samsung Motors and GM Korea reached a tentative agreement with their unions on the issue, the regularity of bonuses had still caused disputes across industries.
The Federation of Korean Industries welcomed Friday’s ruling. “Now it is time for us to move forward, to reinforce our global competitiveness instead of arguing over wages,” the businessmen’s group stated.
By Bae Ji-sook (baejisook@heraldcorp.com)
