Gwangju Employers Federation Expresses Regret Over Ruling Expanding Scope of Ordinary Wages

"Facing Financial Burden Due to Rising Labor Costs for Companies"

The Gwangju Employers Federation expressed regret over the Supreme Court's ruling to broaden the scope of ordinary wages, stating that companies will be burdened with increased labor costs as a result.

On the 23rd, the Gwangju Employers Federation issued a statement saying, "On the 19th, the Supreme Court's full bench ruled that 'the conditions of being an incumbent employee and the minimum number of working days attached to regular bonuses are both invalid,' and that regular bonuses must be included in ordinary wages. This completely overturns the Supreme Court's 2013 full bench decision, which excluded regular bonuses from ordinary wages if they had conditions for incumbency or minimum working days. We regret this ruling, which significantly expands the scope of ordinary wages."

The organization continued, "This ruling invalidates labor-management agreements made in reliance on the 2013 Supreme Court decision, which excluded regular bonuses with incumbent conditions from ordinary wages. This undermines legal stability in the workplace and is likely to cause confusion, such as an increase in wage-related lawsuits. Especially in the current climate of political instability, sluggish domestic demand, and decreasing export growth, this ruling imposes unexpected financial burdens on companies, which will further worsen their business environment."

They also pointed out, "If companies are required to include all regular bonuses in ordinary wages, labor costs will inevitably continue to rise. Therefore, labor and management should renegotiate to restructure the current complex wage system by including a portion of regular bonuses in base salary and reorganizing the rest as performance-based bonuses."

Additionally, they urged, "We hope that this ruling will serve as an opportunity for labor and management to work together to reform the seniority-based wage system?which has long been criticized as a chronic problem in the labor market?into a fair and reasonable system centered on job performance. Furthermore, the courts should refrain from making rulings in future wage-related disputes that could trigger new conflicts and confusion between labor and management."

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