Kia Motors Ordinary Wage Ruling... Business Community Asks, "When Exactly Is the Principle of Good Faith Recognized?"

No Recognition Despite Prior Labor-Management Agreement
Concerns Over Industrial Site Confusion Amid COVID-19

Members of the Kia Motors Branch of the Korean Metal Workers' Union held a press conference on the 20th in front of the Supreme Court in Seocho-gu, Seoul, regarding the Supreme Court ruling on the ordinary wage lawsuit. On the same day, the Supreme Court upheld the lower court's ruling partially in favor of the plaintiffs in the wage claim lawsuit filed by Kia Motors workers against Kia Motors. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kiho Sung] "With the great fear of the resurgence of the novel coronavirus infection (COVID-19) now, I am curious when the principle of good faith (Shinui Principle) will be recognized if it is not acknowledged now."

As the Supreme Court ruling on Kia Motors' ordinary wage lawsuit resulted in a partial victory for the plaintiff, the business community expressed great concern that the Shinui Principle was not recognized amid the management crisis caused by the COVID-19 situation. In particular, there are concerns that this ruling will affect the ordinary wage system not only in the automobile industry but throughout the entire business sector, turning the so-called "ordinary wage tsunami" fear into reality.

Jang Jung-woo, Head of Labor Policy at the Korea Employers Federation, said, "Kia Motors had a prior agreement between labor and management regarding ordinary wages, but the fact that this was not recognized could cause confusion in the industrial field, which is worrisome," adding, "If the Supreme Court maintains this stance going forward, it will have a significant impact on our economy."

Jeon In-sik, Head of Employment Policy at the Korea Chamber of Commerce and Industry, also commented on the appellate court's decision, saying, "The difficult situation due to COVID-19 has been compounded by legal risks, further increasing management uncertainty for companies," and added, "It is necessary to establish specific guidelines regarding the application of the Shinui Principle to resolve this uncertainty."

There are also concerns that the Supreme Court's refusal to recognize the Shinui Principle may lead to a series of lawsuits in the future. Lee Sang-ho, Head of Employment Policy at the Federation of Korean Industries, said, "The Shinui Principle was the biggest issue," and added, "If the principle is excluded in the COVID-19 situation and applied to other companies as well, the Korean economy could face a situation with no breakthrough."

Head Jang said, "It is not easy to judge how many additional lawsuits will arise due to this ruling," but diagnosed, "However, in the difficult management environment caused by COVID-19, the financial damage from unforeseen lawsuits will be considerable."

The business community emphasized that the management difficulties of companies should not be judged solely by financial indicators. A business official said, "In the case of ordinary wage trials, individual courts realistically make judgments by comparing additional legal allowances with sales and labor costs without clear standards," and pointed out, "Since each company's situation is different, it is unreasonable to judge management crises solely based on simple financial statement profits and losses."

This content was produced with the assistance of AI translation services.