Ordinary-Wage Litigation
2018.10.31.
Yulchon successfully defended a major financial institution against an unpaid-wage suit all the way through the District Court, the High Court, and the Supreme Court, achieving total victory for our client. The suit was brought by three employees as representative plaintiffs in a group action which ultimately included more than a thousand labor-union members. The plaintiffs alleged non-payment of wages consequent to the Supreme Court’s December 2013 Kapeul Autotech decision. That decision upset the existing balance of Korean employers’ compensation systems by holding that certain regular bonuses must be included in employees’ “ordinary wage,” the basic wage used for calculating overtime pay and other statutory entitlements.
This suit was one of the most-watched ordinary-wage disputes, as our client’s compensation system is broadly similar to prevailing practices throughout most of the Korean finance industry. The client’s exposure in the group action was estimated to be hundreds of millions of US dollars.
The Supreme Court’s decision in our client’s favor established an important precedent with implications for other similar cases currently pending before the Supreme Court.
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