The Supreme Court upheld the workers' hands in a 630 billion won ordinary wage lawsuit filed by Hyundai Heavy Industries workers against the management.
The 3rd division of the Supreme Court (Chief Justice Kim Jae-hyung) returned the case to the Busan High Court today, breaking the original ruling that the plaintiff lost the appeal in the appeals court for a wage claim filed against the company by 10 workers, including worker A of Hyundai Heavy Industries, today.
This is the Supreme Court's decision after 9 years since the filing of the lawsuit in 2012.
The history of ordinary wage litigation… From general corporations to public corporations, 'litigation turmoil'
Ordinary wage simply means 'the wage that a company must pay its workers on a regular basis'.
It is usually represented by a monthly salary, and this includes hourly, daily, or weekly wages, which have different titles depending on the payment cycle.
In addition, regular wages include money that the company pays on a regular basis, such as job allowances.
Contrary to this, there is an argument that money whose payment is determined based on work performance and its size should not be included in the ordinary wage.
A typical example is a bonus or performance bonus, commonly referred to as a 'bonus'.
This is because bonuses do not have the three characteristics of regularity, uniformity, and fixedness that determine the scope of ordinary wages.
However, the labor community argues that such bonuses should be included in the ordinary wage.
The logic is that if regular bonuses have been paid to workers on a regular basis, they can be regarded as ordinary wages.
As the size of the ordinary wage increases, the various allowances to be paid by the company, including holiday pay and annual paid vacation pay, also rise accordingly, so companies have refused to do so.
The difference in positions was obvious because the higher the ordinary wage, the more the worker gets and the company has to pay a lot of money.
It is estimated that about 200 of the companies with 100 or more employees have filed lawsuits for ordinary wages since 2013, when the controversy over ordinary wages began in earnest.
The lawsuits continued not only in general corporations but also in public corporations.
At that time, labor circles predicted that if the government loses the ordinary wage lawsuit between public corporations and public institutions, an additional budget of about 10 trillion won would be incurred.
The Korea Employers Federation also estimated that in 2015, the additional wage burden of companies due to the inclusion of regular wages in bonuses would reach 38 trillion won.
The 'principle of good faith' emerged as a major issue... mixed judgments
The first time the standard was set in the controversy over ordinary wages, which is the biggest concern of the labor and business circles, was the Supreme Court decision in 2013 by the Supreme Court. At that time, the Supreme Court defined three characteristics of ordinary wages.
First, regularity means “characteristic of being paid continuously at regular intervals,” uniformity means “characteristic of being paid to all workers who meet certain conditions, such as working experience,” and “payment is fixed regardless of additional conditions such as performance.” ' was established as the standard of ordinary wages. Therefore, if it is determined that the bonus paid by each company satisfies these three conditions, it is included in the ordinary wage.
However, with this decision, the Supreme Court established the 'principle of good faith' as another standard for judging ordinary wages.
If the scope of ordinary wages is expanded and the amount of wages to be paid to workers increases, which causes serious business difficulties to the company, it is not necessary to pay them.
The 'principle of good faith and good faith' is a civil law principle that requires parties to a legal relationship to act with good faith and good faith in exercising their rights so as not to contravene the trust of the other party.
In other words, the clause that there is no obligation to pay if the existence of the company is endangered is attached as a kind of proviso.
Since the Supreme Court ruling, companies that are in a position to pay their workers retroactively in allowances based on the increased ordinary wages have been trying to prove their 'management difficulties'.
It was at this point that the lower courts' judgments were mixed in the ordinary wage lawsuits that were held in courts across the country.
In the process of judging whether the logic of the management complaining of difficulties meets the standard based on the principle of good faith, different judgments were made one after another by the courts.
This was also the case with the Hyundai Heavy Industries lawsuit.
9 years of litigation over 630 billion won… 1 win 1 loss in 1st and 2nd trial
Hyundai Heavy Industries workers filed a lawsuit against the management in 2012 asking them to include regular bonuses in their ordinary wages. Hyundai Heavy Industries has paid a bonus of 100% every two months and has been paying 800% of bonuses per year including year-end and New Year’s Day and Chuseok holidays. , argued that the company should give its employees a retroactive payment for this.
The first trial court ruled in favor of Hyundai Heavy Industries workers. The court said, "The management situation of the company has deteriorated due to low profitability, the appreciation of the won, and the emergence of competing companies such as Chinese shipyards." I judged. Immediately after the ruling, the industry estimated that the retroactive amount of the regular wage for 4 years and 6 months to go to 38,000 Hyundai Heavy Industries workers would reach 630 billion won.
However, the judgment of the second trial court was different. The second trial court acknowledged that 700% of the bonus excluding holiday bonuses should be included in the ordinary wage, but ruled that the retroactive wage was not required.
The court said, "The plaintiffs' request for additional payment of unpaid statutory allowances by including bonuses in their ordinary wages is far exceeding the wage level agreed upon by labor and management. It is unacceptable in light of the notions of justice and equity, as it jeopardizes the existence of the company.”
It is believed that the management difficulties the company will face if it pays 630 billion won retroactively fall under the 'principle of good faith'.
Supreme Court "If there is a possibility of overcoming it, we should not easily reject workers' claims"
The litigation battle over the payment of additional wages of 600 billion won was concluded with the victory of the workers according to today's Supreme Court ruling.
The trial for ordinary wages at Hyundai Heavy Industries has received a lot of attention from the labor and industry circles in that the Supreme Court judged the standard for retroactive payment among several ordinary wage-related lawsuits that have been ongoing.
The court evaluated that it was meaningful in that it presented the criteria for judging the 'principle of good faith' in making this judgment.
When judging whether the 'principle of good faith' was violated, the Supreme Court said, "We have presented specific criteria for judging not only temporary business deterioration but also the possibility of predicting or overcoming business difficulties, continuity, profitability, and business difficulties." It gave meaning to the verdict.
▲ Hyundai Heavy Industries' union holding a press conference in front of the Supreme Court today (16th) to welcome the ruling on ordinary wages
In addition, the court revealed a view consistent with the previous Supreme Court judgment that 'whether an employee's request for additional allowances in accordance with the inclusion of ordinary wages truly jeopardizes the existence of a company should be judged more carefully and strictly'. The court said, "Even if a company is temporarily facing difficulties in management, if it had made a reasonable and objective business forecast, it would have been possible to foresee such a deterioration in its management status." We should not easily reject workers' compensation claims based on the principle of good faith."
This Supreme Court decision, made after 9 years, is expected to affect other ordinary wage-related lawsuits that are currently in progress or will be filed in the future. Some analysts say that companies are under a burden to present the evidence and prospects for business deterioration in a more sophisticated and persuasive manner. The Korea Economic Research Institute, affiliated with the Federation of Korean Industries, said, "In a situation where national competitiveness has weakened due to the delay in economic recovery due to the re-spreading of the corona virus, this ruling, which does not recognize the principle of good faith, unexpectedly increases the burden of labor costs, raising uncertainty in corporate management. It will increase.”
On the other hand, the labor union of Hyundai Heavy Industries welcomed today's ruling by sending a text message to its members right after the verdict, saying, "We would like to share the joy of reporting that the Supreme Court has made a judgment in favor of the union." Hyundai Heavy Industries said, "We respect the court's judgment, but there is a difference from our position." We will thoroughly review the judgment and give a full explanation at the remandatory trial.”