This file photo, taken May 11, 2021, shows KT Corp.’s headquarters in central Seoul. (Yonhap)
SEOUL, July 6 (Korea Bizwire) — Employees of KT Corp., South Korea’s No. 2 wireless carrier, have lost a lawsuit against their employer, claiming that their salaries were reduced due to the company’s peak wage system.
The suit, filed by some 1,300 KT employees seeking the cancellation of the peak wage system, had its original verdict in favor of the company confirmed by the Supreme Court.
In 2014, as part of an agreement between labor and management, the retirement age was extended from 58 to 60 years old.
In exchange, employees’ wages were progressively reduced by 10 to 40 percent annually for four years, starting at the age of 56.
Considering that the plaintiffs have longer tenures compared to rival companies such as SK Telecom Co. and LG Uplus Corp., and that KT has a higher proportion of older employees, the court determined that extending the retirement age would place additional burdens on the telecom giant.
Consequently, the claim that the peak wage system was introduced without valid justification was dismissed.
The plaintiffs argued that the company had implemented a performance-based salary system, rendering the implementation of the peak wage system unnecessary.
However, this claim was also rejected since the performance-based salary system shares virtually identical characteristics with a seniority-based compensation plan.
J. S. Shin (js_shin@koreabizwire.com)
