Today a South Korean court decided that Hyundai Motor Co should be broadly favored in a wage clash with the company’s workers that sought additional annual payments that could have amounted to around $1 billion.
Hyundai, which together with Affiliate Kia form the world’s fifth-biggest automaker, has been entrenched in a bitter dispute over salaries last year as it’s now mulling a production expansion towards China and Mexico in a bid to lower wage costs and avoid the regular labor movements in its home country. According to the South Korean court, the automaker was not forced to put the regular bonuses in the calculation quota for the base salary for more than 90 percent of its workforce. Twenty three Hyundai Motor employees initiated the lawsuit back in March 2013 claiming the company erroneously calculated the base wages and asked for unpaid overtime, allowances and severance pay.
According to a Hyundai statement, the Seoul Central District Court ruling “put an early end to the controversy over base wages” as it decided that 21 of the 23 claimants, meaning the entirety of Hyundai Motor’s domestic employees, were not entitled to the claims. The wage issue was the primary problem discussed during negotiations between the company and its South Korean labor union in 2014 and eventually led to a partial strike last September. The two sides settled and according to both parties, regardless of the court’s ruling, they will again discuss the situation by the end of March, even as regulatory fillings show that annual salaries of workers for the automakers have reached 5.97 trillion won in 2013 – doubling from the quota received a decade ago.