Labor and management at Korea Telecom (KT) agreed on retirement age extension and implementation of a wage peak system. The extended retirement age will be effective from 1 January 2016, whereas the wage peak system has been in effect since 1 March 2015.
In December 2014, the KT labor-management council began discussing employment security, ways to enhance competitiveness of the company and promote jobs for youth and overall employment. After 3 months of discussions, labor and management agreed on introduction of a wage peak system and extending the retirement age.
Based on the agreement, ▲ retirement age is extended from 58 to 60 ▲ wages will be reduced by 10% (starting from the highest wage at 56) of the wage in the previous year for 4 years until age 60 ▲ a new ‘senior consultant system’ will aid in rehiring skilled retirees with good performance records.
The labor and management at KT adopted a wage peak system that minimizes wage cuts through progressive reductions, in consideration of the fact that the proportion of workers at KT aged 50 or older is high. The company also provides outplacement opportunities for retirees. If a retiree applies for the service, the retiree can be re-employed by KT or an affiliate upon successful completion of a selection process.
The company mentioned that “as the average age of the KT employees is relatively high among large enterprises in Korea, a considerable number of them will benefit from the agreement. KT will continue to contribute to job creation for youth and employment security for our older employees.”
The company has also adopted a flexible working hour scheme which enables workers to autonomously adjust their working hours, within statutory limits and in consideration of job characteristics.