All attention given to ‘Regular Wage’ Kia Motors judgment…At least KRW 5 trillion to be burden in case of losing a suit
Choi Yong Soon | cys@ | 2017-08-10 11:27:08
[Digital Times, Choi Yong-soon] Kia Motors` general wage ruling focuses on the industry as well as the automotive industry. If the wage is widely recognized in the ruling, the industry is worried that the related lawsuits will be extended to all workplaces, leading to a surge in labor costs along with deterioration in corporate competitiveness.
According to the industry sources on August 9, Kia has been estimated at as much as KRW 5 trillion in, at least one labor costs to be borne by one trillion won in lost when normal wage verdict scheduled later this month.
Labor charges in this case are a value of KRW 686.9 billion three years from August 2008. Kia will have to pay about KRW 1 trillion, including the lost city charges and interest. If the outcome of the lawsuit is extended to all employees, the total burden is expected to reach KRW 3 trillion. In the worst case, unions are filing an ordinary wage lawsuit for the period from November 2014, which was not included in the suit. In this case, Kia`s total burden is expected to increase to KRW 5 trillion.
In the ruling, the industry believes that regular bonuses are highly likely to be recognized as ordinary wages. Just as every year so far it did not include bonuses, according to the labor agreement in wage negotiations in ordinary wages retroactively in accordance with the `good faith` chances looked to be low.
Meanwhile, if Kia Motors takes a massive cost burden, this shock wave is expected to spread throughout the car industry. In the meantime ‘THAAD retaliation (high-altitude missile defense system)` and trade protectionism strengthening domestic demand, strikes, etc. Among across the worst of phase with internal and external negative factors, Kia Management worse is connected to a domino crisis of the Hyundai-Kia Automotive Group, and even cars. It will lead to the crisis of the whole industry.
More worrisome is that the wage problem is not limited to the car industry. Currently, ordinary wage lawsuits are in progress at more than 200 companies in all industries including automobile, shipbuilding, and aviation. Once Kia`s ruling comes to the conclusion that normal wages are recognized, additional ordinary wage lawsuits will follow at each business site.
Accordingly, it is estimated that the total cost to be borne by industry is KRW 22 ~ 38 trillion.
Korea Employers Federation if over a number of years ago Report as well as periodic bonuses all the time, various allowances unions claimed to be regarded as normal wages, was expected to be more cost-sized enterprises to pay up to 38 trillion. At that time, the Korea Labor Institute also estimated that the labor cost increase (the past three years + the next one year) of the enterprise due to the widening of the normal wage was about KRW 22 trillion. In July last year, Park Ki-sung, a professor at Sungshin Women`s University, calculated that if regular bonuses were included in regular wages, labor costs would increase by KRW 22 trillion over four years.
The business world insists that it cannot catch up to the corporate wage problem in the difficult management environment such as the uncertainty raising inside and outside, and intensifying competition. Besides, according to the principle of the new parliament, ordinary wages were not expected to be retroactively applied. A representative of a large company said, "It is the first time that labor problems have come together at the same time, from minimum wage increases and strike to normal wage problems." Manufacturer expert said, "Even so, it is in Kia`s ruling that the ordinary wages, including regular bonuses, impact new norm principle, if the principle is not recognized on the manufacturing industry will be unimaginable."
By Choi Yong Soon cys@
[ copyright ⓒ The Digitaltimes ]
According to the industry sources on August 9, Kia has been estimated at as much as KRW 5 trillion in, at least one labor costs to be borne by one trillion won in lost when normal wage verdict scheduled later this month.
Labor charges in this case are a value of KRW 686.9 billion three years from August 2008. Kia will have to pay about KRW 1 trillion, including the lost city charges and interest. If the outcome of the lawsuit is extended to all employees, the total burden is expected to reach KRW 3 trillion. In the worst case, unions are filing an ordinary wage lawsuit for the period from November 2014, which was not included in the suit. In this case, Kia`s total burden is expected to increase to KRW 5 trillion.
In the ruling, the industry believes that regular bonuses are highly likely to be recognized as ordinary wages. Just as every year so far it did not include bonuses, according to the labor agreement in wage negotiations in ordinary wages retroactively in accordance with the `good faith` chances looked to be low.
Meanwhile, if Kia Motors takes a massive cost burden, this shock wave is expected to spread throughout the car industry. In the meantime ‘THAAD retaliation (high-altitude missile defense system)` and trade protectionism strengthening domestic demand, strikes, etc. Among across the worst of phase with internal and external negative factors, Kia Management worse is connected to a domino crisis of the Hyundai-Kia Automotive Group, and even cars. It will lead to the crisis of the whole industry.
More worrisome is that the wage problem is not limited to the car industry. Currently, ordinary wage lawsuits are in progress at more than 200 companies in all industries including automobile, shipbuilding, and aviation. Once Kia`s ruling comes to the conclusion that normal wages are recognized, additional ordinary wage lawsuits will follow at each business site.
Accordingly, it is estimated that the total cost to be borne by industry is KRW 22 ~ 38 trillion.
Korea Employers Federation if over a number of years ago Report as well as periodic bonuses all the time, various allowances unions claimed to be regarded as normal wages, was expected to be more cost-sized enterprises to pay up to 38 trillion. At that time, the Korea Labor Institute also estimated that the labor cost increase (the past three years + the next one year) of the enterprise due to the widening of the normal wage was about KRW 22 trillion. In July last year, Park Ki-sung, a professor at Sungshin Women`s University, calculated that if regular bonuses were included in regular wages, labor costs would increase by KRW 22 trillion over four years.
The business world insists that it cannot catch up to the corporate wage problem in the difficult management environment such as the uncertainty raising inside and outside, and intensifying competition. Besides, according to the principle of the new parliament, ordinary wages were not expected to be retroactively applied. A representative of a large company said, "It is the first time that labor problems have come together at the same time, from minimum wage increases and strike to normal wage problems." Manufacturer expert said, "Even so, it is in Kia`s ruling that the ordinary wages, including regular bonuses, impact new norm principle, if the principle is not recognized on the manufacturing industry will be unimaginable."
By Choi Yong Soon cys@