The Seoul Central District Court recognized a bonus paid to 2 former Hyundai Auto Service employees as ordinary wage, in a lawsuit filed in March 2013 by 23 unionized workers of Hyundai Motor claiming 6 types of bonus should be counted as ordinary wage.
The 23 plaintiffs raising the lawsuit represented different employment ranks, and the ruling will have the same force over all 51,600 unionized workers at Hyundai Motor.
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Representative Plaintiffs
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Represented Unionized Workers
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15 persons
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44,000 workers with Hyundai Motor
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3 persons
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1,900 workers formerly employed by Hyundai Precision
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5 persons
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5,700 workers formerly employed by Hyundai Auto Service
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Total 23 persons
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51,600 unionized workers at Hyundai Motor
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Hyundai Motor merged in 1999 with Hyundai Precision (currently Hyundai Mobis) and Hyundai Auto Service. During the merger, the unions of Hyundai Motor, the former Hyundai Precision and Hyundai Auto Service, based on an agreement to integrate their unions, wished to unify payment terms in accordance with the collective bargaining agreement of the former Hyundai Motor from the year 2000, but reality was different. For those employees formerly with Hyundai Auto Service, bonuses have been paid on a daily basis calculation without the regulation that prevents employees from receiving annual bonuses if they have worked less than 15 days, whereas this regulation applies to employees formerly with Hyundai Motor and Hyundai Precision.
The Seoul Central District Court didn’t recognize as ordinary wage any regularly-paid bonuses given only upon meeting certain conditions in addition to providing prescribed work. According to the relevant regulation at Hyundai Motor, the relevant bonus is not paid to employees with less than 15 days of service within 2 months after employment with the company.
However, the Court ruled that a bonus calculated on a daily basis applicable to former Hyundai Auto Service employees shall be calculated into ordinary wage.
The Seoul Central District Court said that if a bonus is paid only upon meeting certain conditions such as working for more than a certain number of days, that bonus is not calculated in ordinary wage since the amount can’t be predetermined. This ruling applied to only 2 of the 23 plaintiffs, with one receiving 3.89 million KRW and the other 220,000 KRW. Originally there were 5 union representatives from Hyundai Auto Service, but the other 3 were not eligible because they failed to submit the necessary documentation.
The Court ordered Hyundai Motor Group to make a three-year retroactive payment to the former Hyundai Auto Service employees who account for only 8.7% of the total Hyundai Motor Group. The Court said such payment wouldn’t cause any significant pain for the company.
Legally, the ruling applies to 5,700 of the 51,600 Hyundai Motor employees, but receipt of additional money depends on individual proof or agreement between labor and management.
<Labor InFocus vol.45, Feb. 2015>