FKI "Supreme Court's Ruling on Wage Peak System Invalidity Raises Concerns Over Corporate Burden and Employment Instability"

[Asia Economy Reporter Kim Jin-ho] The Federation of Korean Industries (FKI) stated on the 26th that the Supreme Court's ruling invalidating the wage peak system is "expected to increase the burden on companies and cause employment instability."

In a statement released that day, the FKI criticized the Supreme Court ruling that declared the wage peak system, introduced through labor-management agreement to ensure employment stability in response to rapid aging, illegal due to age discrimination.

According to the FKI, the "Act on Prohibition of Age Discrimination in Employment and Promotion of Employment for Older Persons" was amended to mandate a retirement age of 60 or older starting in 2016, while simultaneously obligating labor and management to take necessary measures to restructure the wage system. To promote employment stability for workers while alleviating the burden on companies, many companies introduced the wage peak system. The FKI pointed out, "This ruling undermines the purpose of the legal amendment and is expected to cause confusion in the industrial field."

They added, "In future related trials, we hope that careful interpretation will be made reflecting voices from the field so that the positive functions of the wage peak system?such as employment stability for older workers in an aging society and expanding job opportunities for youth?can be effectively realized."

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