131 KAI Workers File Impedance Lawsuit... Samsung and Hyundai Motor Unions Demand Abolition

Aftermath of Wage Peak System Ruling
Despite Supreme Court's Limited Ruling to Maintain Retirement Age
Growing Backlash Against Operations Contrary to Introduction Purpose
"Varied Applications... Let's Seek Court Judgment"
Official Letters Sent to Companies Asking for Their Position
Transitional Period for Reassessment... Need for Briefings, etc.

[Asia Economy Reporter Kim Hyung-min] It has been confirmed that 131 employees currently working at Korea Aerospace Industries (KAI) filed a lawsuit on the 7th at the Changwon District Court Jeonju Branch seeking to invalidate the wage peak system. This is the first large-scale collective lawsuit involving more than 100 people since the Supreme Court ruling on the wage peak system.

Yang Min-gyu, the attorney representing the KAI workers, told this publication on the 9th, "This lawsuit is intended to have the court review the company's wage peak system," adding, "Since the wage systems applied to each worker vary greatly, it is currently necessary to organize common demands or positions." It has been reported that KAI claims the wage peak system they implement, which is a retirement age extension type agreed upon through labor-management negotiations, is unrelated to the Supreme Court ruling.

Labor unions at various companies have also begun collective actions. The in-house unions of Samsung Electronics, Hyundai Motor Company, and SK Hynix sent official letters to management the day before, asking for their stance on the wage peak system ruling or demanding its abolition. On the same day, the Public Institution Headquarters of the Korean Confederation of Trade Unions' Public Transport Workers' Union held a press conference in front of the Presidential Office in Yongsan-gu, Seoul, urging the government to abolish the wage peak system and demanding negotiations on related matters.

Although the Supreme Court ruling on the 26th of last month was limited to the ‘retirement age maintenance type’ among many types of wage peak systems, tensions between labor and management have flared up. Legal circles and relevant government departments had expected that workplaces applying other types of wage peak systems, such as the retirement age extension type, would not be significantly affected immediately after the Supreme Court ruling, but this outlook has been completely overturned.

Attorney Yang analyzed, "The workers’ long-suppressed grievances regarding the wage peak system are now erupting." There is also a view that the issue surfaced this time because the wage peak system was operated in a way that did not align with its original purpose. Attorney Kim Do-hyung of Yulchon LLC, who attended a seminar hosted by the Federation of Korean Industries the day before, emphasized, "The wage peak system was introduced to reduce labor costs and improve management efficiency, but the lack of legitimacy in that purpose and insufficient measures such as changes in job content in response to wage reductions were the issues raised by the Supreme Court." Professor Choi Jun-seon, emeritus professor at Sungkyunkwan University Law School, said, "The Supreme Court ruling is limited to the retirement age maintenance type wage peak system, but some parts of society tend to interpret it in a self-serving way, encouraging lawsuits."

On the 8th, officials from the Public Institution Business Headquarters held a press conference in front of the Presidential Office in Yongsan-gu, Seoul, urging the abolition of the wage peak system guidelines and demanding labor-management negotiations. Photo by Jinhyung Kang aymsdream@

Disputes, lawsuits, rallies, and protests surrounding the wage peak system are expected to continue. The legal community views this as a ‘transitional period’ to reexamine the wage peak system as a whole. Besides the ‘retirement age maintenance type’ ruled on by the Supreme Court, there are many other types of wage peak systems. There is also the retirement age extension type, and even within that, cases vary in detail. There are numerous lawsuits directly or indirectly related to the wage peak system currently before the courts. It is widely believed that only after the final rulings on these cases will the legality of the wage peak system be accurately determined. From the perspective of the government and companies, conflicts must be prevented and disputes minimized until then. Professor Lee Sang-hee of the Department of Knowledge Convergence at Korea University of Technology and Education said, "The government should promote a job- and performance-based wage system by expanding infrastructure for job and wage information and increasing support for wage system reform consulting. It is also necessary to actively carry out efforts such as explanatory sessions to prevent instability in the industrial field caused by this ruling."

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