SEOUL, Dec. 16 (Korea Bizwire) — The Supreme Court on Thursday ruled in favor of workers at Hyundai Heavy Industries Co., who have fought the company for nine years demanding that regular periodic bonuses be counted as part of their “ordinary wage.”
The top court ruled in favor of 10 employees who filed the appeal on behalf of some 30,000 workers at the shipbuilding conglomerate and sent the case back to the Busan High Court for a retrial.
The suit was launched by workers asking the company to recognize regular bonuses as part of the ordinary wages and demanding the company retroactively cover the differences in legal allowances and retirement pay from December 2009 to May 2014 by including regular bonuses when calculating the allowances.
In South Korea, many large businesses pay their employees fixed bonuses on a regular basis aside from their ordinary salaries.
Firms argue that when the bonus is counted as ordinary wages, they have to shoulder a huge financial burden as all other benefits and allowances, such as overtime or retirement pay, are to be recalculated based on the increased ordinary pay.
The ruling in the first trial was in favor of the workers, but the appeal court ruled in favor of management. The due allowances from the company are estimated at around 600 billion won (US$507 million), according to the company.
“Even if companies face financial difficulties, such troubles can be predicted if managements make rational and objective forecasts,” the court said, adding that companies should not easily reject requests for additional due legal allowances.
The company said it “respects” the court decision but added there were “differences” with the company’s position. Hyundai Heavy added it will thoroughly make its case in the retrial at the high court.