KCCI, Kumho Tire Partially Lose Lawsuit... "Cause of Industry Confusion and Conflict"

[Asia Economy Reporter Hyunseok Yoo] The Korea Employers Federation (KEF) expressed regret over Kumho Tire's partial loss in the ordinary wage lawsuit.

On the 16th, KEF stated, "The court ruled that Kumho Tire's regular bonuses qualify as ordinary wages and that there was no violation of the principle of good faith," adding, "The business community regrets that companies which trusted labor-management agreements are now burdened with enormous additional costs due to this ruling."

On the same day, the Civil Division 3 of the Gwangju High Court held a retrial sentencing for a wage lawsuit filed by five current and former Kumho Tire employees and ruled partially against Kumho Tire.

The court accepted 27.12 million KRW out of the 38.59 million KRW claimed by the five current and former employees as ordinary wages. Accordingly, Kumho Tire was ordered to pay each plaintiff between approximately 2.5 million KRW and up to 8 million KRW. The amount finalized this time corresponds to 70% of the total amount claimed by the employees against Kumho Tire.

The court judged that although the workers violated the labor-management agreement to exclude regular bonuses from ordinary wages and made additional cost claims, this did not constitute a breach of the principle of good faith. KEF explained, "The non-recognition of the principle of good faith was based on ex post factors such as management indicators or business conditions," adding, "If judgments focus on managerial elements that vary depending on external variables, as in the Kumho Tire case, drastically different conclusions may be drawn depending on the court's perspective on the same management indicators or business conditions, causing confusion and conflict."

KEF also emphasized that management indicators and the like should only be considered factors in judging good faith and must not become absolute standards. KEF stated, "During wage negotiations, labor and management agreed to exclude regular bonuses from ordinary wages and set the overall wage level based on this," stressing, "It is crucial to consider that the workers are now seeking additional statutory allowance payments based on reasons they had not anticipated during negotiations."

Finally, KEF said, "The business community hopes that future court judgments on the principle of good faith in ordinary wages will present detailed and reasonable criteria that both labor and management can predict, thereby respecting autonomous practices and trust between labor and management," and added, "We hope for reasonable judgments that align with the rapidly changing business environment and industrial realities."

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