1. Lawsuits on Ordinary Wage
In an effort to solve an increasing number of lawsuits and deepening confusion in workplaces caused by contradictory rulings by the lower courts, the Supreme Court made a full-member decision on December 18th, 2013.
[Table 1] Summary of Supreme Court Ruling on Ordinary Wage
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• Criteria on ordinary wage specified
– Regularity: Payments made at intervals longer than a month are included in ordinary wage
– Pre-determinable: The following factors should be considered: i) wages calculated based on the number of days worked, ii) payment only to incumbent employees, iii) payment only to employees who worked a certain number of days
• Labor-management agreements on ordinary wage scope are invalid • Retroactive wage claims are against the principle of good faith – Since the agreement is invalid, employees in principle may claim for an additional wage, but employees are not allowed to request retroactive wage payment as it is contrary to the principle of good faith.
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In spite of the Supreme Court’s ruling, controversy still remains due to different interpretations surrounding certain issues including application of the good faith principle and confusion around how far back the principle applies.
There were also different views regarding pre-determinability of ‘payment only to incumbent employees’, but this controversy was resolved when the Busan High Court ruled that such payment is not ordinary wage.
2. Lawsuits regarding Double Payment of Holiday Work
A lawsuit on whether employers should make double payments in case of holiday work (holiday work allowance plus overtime allowance), is currently pending at the Supreme Court. The major issue in this case is whether employers should pay allowances for both holiday work and overtime work to employees who worked more than 40 hours during the week. The ELC,
when putting together the Subcommittee on the Promotion of Social Dialogue, recommended that the judicial branch postpone the Supreme Court’s ruling at least until the Subcommittee closes on April 15th. Meanwhile, rulings of the lower courts seem to contradict each other.
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Defendant
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Result of 2nd Trial (Employer)
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Date of Appeal
(Supreme Court)
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1
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Seongnam City
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Lost (should pay both)
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2012.12.18
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2
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Seongnam City
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Won (should not pay either)
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2012.3.8
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3
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Anyang City
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Lost (should pay both)
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2012.12.18
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4
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Anyang City
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Lost (should pay both)
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2012.11.23
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[Table 2] Major Rulings of the Lower Courts
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Case Won
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【Summary】Only add the extra pay(50%) for holiday work
【Ground for the ruling】:
1. Regulations stipulated in the Labor Standards Act (LSA)
– Statutory working hours are 40 hours workweek; separate legislation is required for double payment
2. Practice since the enforcement of the LSA
– no administrative restriction, collective bargaining, etc.
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Case Lost
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【Summary】Holiday work after working 40 hours during the week⇒ holiday work allowance (50%) + overtime allowance (50%)
【Ground for the ruling】:
1. Working hours stipulated in the LSA means ‘actual working hours’ (total amount of hours worked including holiday work)
* A calendar week is 7 consecutive days
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