KEPCO Employees Win First Trial in Wage Lawsuit Against Management... "24 Billion KRW to be Paid"

Korea Electric Power Corporation

[Asia Economy Reporter Kim Daehyun] Employees of Korea Electric Power Corporation (KEPCO) won a lawsuit claiming an average wage of approximately 24 billion KRW against the company.

According to the legal community on the 27th, the Civil Division 41 of the Seoul Central District Court (Presiding Judge Kim Myungsoo) recently ruled in favor of the plaintiffs in a lawsuit filed by about 7,600 current and former KEPCO employees against the company claiming average wages. The average wage refers to the amount obtained by dividing the total wages paid to the worker during the three months prior to the occurrence of reasons for calculating the average wage, such as retirement or work-related injury, by the total number of days in that period.

Earlier, in September 2019, KEPCO employees filed a lawsuit against the company demanding about 24 billion KRW in unpaid retirement benefits and others. They argued that it was unfair for the company to exclude the management performance bonus, which corresponds to the average wage, when determining retirement benefits, interim retirement benefit payments, and retirement pension contributions.

On the other hand, the company argued that it was correct to exclude the management performance bonus from the average wage. The management performance bonus is paid based on the evaluation results of management performance and is not wages paid as compensation for labor. They also emphasized that according to the government's public institution management normalization plan, the regulations on annual salary and welfare management were revised in August 2014 to exclude the management performance bonus from the average wage used as the basis for calculating retirement benefits.

However, the court accepted all the claims of the employees. The court judged that if the public institution management performance bonus is continuously and regularly paid, and the recipients and conditions are fixed, it should be considered wages that form the basis for calculating the average wage.

The court stated, "KEPCO's regulations on annual salary and welfare management, etc., are based on the premise that there is an 'obligation to pay the management performance bonus,' and set the recipients, conditions, and standards accordingly," and "Accordingly, the management performance bonus has been continuously and regularly paid every year. KEPCO could reasonably expect to pay the management performance bonus, and employees could also have formed the expectation that the management performance bonus would be paid," the court explained.

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