Supreme Court Confirms Partial Victory for Workers in Hyundai Steel Ordinary Wage Lawsuit... 11 Years After Filing

Hyundai Steel workers have won a final lawsuit demanding the recalculation of ordinary wages, which serve as the basis for statutory allowances and severance pay, and the payment of the difference in statutory allowances and severance pay.

On the 11th, the Supreme Court's First Division (Presiding Justice Kim Seon-su) upheld the lower court's partial ruling in favor of the plaintiffs in the wage claim lawsuit filed by about 2,800 Hyundai Steel workers against the company.

Supreme Court, Seocho-dong, Seoul.

The court stated the reason for dismissing the appeal, saying, "There is no error in the lower court's judgment regarding the legal principles or omissions in judgment concerning ordinary wages, average wages, holiday work and holiday work allowances, statutory allowances, or violations of the rules of evidence."

Following the Supreme Court's final ruling that day, Hyundai Steel will have to pay approximately 44.3 billion KRW and delayed damages to the workers.

The workers filed a lawsuit in May 2013 against Hyundai Steel, claiming the difference in statutory allowances and severance pay that they had received less than they were entitled to from April 2010 to March 2013.

Statutory allowances are calculated based on ordinary wages, and Article 6, Paragraph 1 of the Enforcement Decree of the Labor Standards Act (Ordinary Wages) defines the concept of ordinary wages as "the hourly wage, daily wage, weekly wage, monthly wage, or contract amount regularly and uniformly paid to a worker for prescribed or total work as stipulated in the Labor Standards Act and this decree."

The company did not include regular bonuses in the ordinary wages when paying holiday and overtime allowances, but the workers argued that the calculation should be redone including the regular bonuses.

After the plaintiffs filed this lawsuit, in December 2013, the Supreme Court plenary session ruled in a lawsuit filed by Gapul Autotech workers against their employer that regular bonuses should be considered part of ordinary wages.

Accordingly, the first and second instance courts ruled that Hyundai Steel must calculate statutory allowances based on ordinary wages including regular bonuses and pay the difference.

The workers also claimed the difference in severance pay, with the issue focusing on how to determine the "average wage," which serves as the basis for severance pay calculation. Article 2, Paragraph 1, Subparagraph 6 of the Labor Standards Act defines "average wage" as "the amount obtained by dividing the total wages paid to the worker during the three months prior to the occurrence of the reason for calculation by the total number of days in that period. This also applies to workers employed for less than three months." In other words, it can be said to be the daily average of wages actually paid to the worker over three months.

The workers argued that cultural event expenses, Lunar New Year and Chuseok gift expenses, and fitness training expenses should be included in the average wage.

The appellate court ruled that among these, compensation allowances, fitness training expenses, group accident insurance premiums, and summer health support expenses should be included in the average wage.

Hyundai Steel appealed, but the Supreme Court found no problem with the appellate court's ruling.

Industry insiders estimate that including other similar cases pending in court, the total amount Hyundai Steel will have to pay workers could reach approximately 350 billion KRW.

Lee Gi-ro, chairman of the Hyundai Steel branch of the Korean Metal Workers' Union, is speaking to reporters after the verdict of the appeal trial related to regular bonuses as ordinary wages was announced on the 11th at the Supreme Court in Seocho-gu, Seoul.

After the Supreme Court ruling that day, the Hyundai Steel Labor Union held a press conference, stating, "This lawsuit was not filed just to receive a few pennies but to normalize the abnormal wage system and secure workers' health rights," and "If Hyundai Steel does not promptly pay the awarded amount, we will immediately take legal action."

The union also pointed out, "Regardless of today's lawsuit outcome, Hyundai Steel capital's deceptive lawsuit delay tactics and the court's tacit approval of them infringed on Hyundai Steel workers' right to a prompt trial."

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