Supreme Court Rules "The Starting Point of the '56-Year-Old Wage Peak System' Should Be Applied at Age 55"

1st Trial "Until the Day Reaching Each Age" → 2nd Trial "Applied from Age 56"
Supreme Court "From Age 55... Not an Unfavorable Distorted Interpretation for Workers"

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has ruled that the application timing of a collective agreement stipulating "applying wage peak from age 56" should be interpreted as age 55 in international age, which corresponds to Korean age 56.

The Supreme Court's First Division (Presiding Justice Oh Kyung-mi) announced on the 28th that it overturned the lower court's ruling, which had ruled against the plaintiff in the appeal case of A company against the Central Labor Relations Commission's decision on the interpretation of the collective agreement, and remanded the case to the Seoul High Court.

When revising the collective agreement, the labor and management of Company A included the clause, "The retirement age is set at 60 years old, and the wage peak is applied from age 56, based on the ordinary wage of the previous year (age 55) for one year," and summarized the wage peak criteria by age in a table.

However, a dispute arose a few years later as the labor and management presented different interpretations regarding the timing of the wage peak application. The company claimed the wage peak should be applied from the day the employee turns 55 years old, while the union argued it should be from the day the employee turns 56 years old, starting the conflict.

The company insisted that 80% of the wage should be applied from the day the employee turns 55 until the day before turning 56, and 75% from the day the employee turns 56 until the day before turning 57. The union countered that 100% of the ordinary wage should be paid until the last day of age 55, and the wage peak system should be applied from the start of age 56.

The judgments of the Local Labor Relations Commission, Central Labor Relations Commission, and the first and second trials were also divided. The Local Labor Relations Commission sided with the company, stating that the age for applying the 80% peak rate is 55 years old, but the Central Labor Relations Commission issued a retrial decision that it applies from age 56.

The first trial interpreted the retirement age as "the day the employee reaches 60 years old," and thus the age distinctions in the wage peak rate table should be interpreted as "until the day the employee reaches each age," not "until the last day of each age." On the other hand, the second trial held that the 80% wage peak rate applies "from age 56."

However, the Supreme Court's judgment was different. The Supreme Court ruled that, as the company argued, the wage peak system should be interpreted as a regulation implemented for five years in one-year increments from the point the employee turns 55 until the retirement age of 60.

The court stated, "Interpreting the application timing of the wage peak system under the collective agreement as age 55 does not constitute an unfavorable modification of explicit provisions to the detriment of the workers."

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