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| Kang Sang-ho, second from left, head of Kia Motors' union, speaks in front of the Seoul High Court in southern Seoul, Friday, after the court rules in favor of the union in claiming ordinary wages. / Yonhap |
By Kim Rahn
The Seoul High Court has upheld a lower court ruling that Kia Motors needs to include regular bonuses in ordinary wages, dismissing the company's claim that providing overdue payments would undermine the carmaker's financial health.
But the court lowered the amount of the payments slightly, not recognizing meal costs as part of the ordinary wages claimed by the carmaker's union.
The ruling is expected to have an influence on similar cases involving other companies over whether such bonuses and allowances need to be included in the ordinary wage, which is used as the basis for calculating overtime, severance and other allowances.
"The regular bonuses were provided in return for the workers' labor, so they are recognized as a part of regular, fixed wage," the court said.
"When considering the company's net profit, sales, debt ratio and other financial status, its giving out the overdue payment is unlikely to cause serious financial difficulty or threaten the company's existence."
In 2011, some 27,000 union members filed a complaint demanding Kia Motors include regular bonuses, meal costs and other payments in their ordinary wages and re-calculate their severance pay and allowances based on them.
The unionists demanded 658 billion won ($584 million) in unpaid allowances, for a total amount reaching 1.09 trillion won with interest.
Kia said the regular incentives had been excluded from ordinary wages according to its earlier agreement with the union. It said the expanded scope of ordinary wages would make the company's financial situation unhealthy and thus would affect the unionists themselves eventually.
In 2017, a district court recognized regular bonuses and meal costs as parts of ordinary wages, ordering the carmaker to recalculate the overtime and other allowances and pay the workers 422 billion won.
It acknowledged the payment would put a strain on Kia, but said the amount would not be substantial enough to weaken the carmaker's financial health.
The appeals court recognized most of the district court's decisions, but excluded meal costs from the scope of ordinary wages, lowering the overdue payment by around 100 million won.
"Despite minor changes, the first ruling has been upheld by and large," Kang Sang-ho, Kia union head, said after the ruling, adding the company should respect the appeals' court ruling and provide the overdue allowances immediately.
"We agree that the nine-year-old lawsuit is impeding Kia's development," he said. "I hope the union and the management would soon reach an agreement in the ongoing talks smoothly."
Kia management expressed regret over the ruling, adding it would review the ruling and decide whether to appeal.
Last week, the Supreme Court also ruled that when deciding ordinary wages, a company's financial status should be considered on very limited conditions. "If bonuses and allowances are not included in ordinary wages for the reason that it would cause the company financial difficulties, it could make companies shift the managerial responsibility and risk to the workers," the top court said.
