"Cannot Exclude Performance Bonuses for Temporary Employees"... Court Sides with Workers

[Financial News] The court has ruled that the company's act of paying performance bonuses only to regular employees who retired at the mandatory retirement age, according to a labor-management agreement, and not to temporary employees who retired on the same day, constitutes discrimination prohibited under the Temporary Employment Act.
According to the legal community on the 25th, the Seoul Administrative Court's 11th Administrative Division (Presiding Judge Kim Junyoung) recently ruled against Hyundai Steel's subsidiary Hyundai ITC in a lawsuit to cancel the reconsideration decision on discrimination correction filed against the Central Labor Commission.
The company, while signing a wage agreement with a labor union composed of regular employees in January 2023, decided to pay management performance bonuses and encouragement bonuses to regular employees born in 1962 who retired on December 31, 2022. The company paid the bonuses to the regular employees according to the agreement but excluded temporary employees who retired on the same day.
As a result, temporary employees applied for discrimination correction to the Chungnam Regional Labor Commission, claiming discriminatory treatment. Both the regional and central labor commissions judged it as "unfavorable treatment without reasonable cause," constituting discrimination.
The company, dissatisfied, filed an administrative lawsuit claiming that "since there is no status as temporary employees after retirement, they cannot be applicants for discrimination correction."
The court ruled that "there is no reasonable cause for unfavorable treatment by not paying performance bonuses solely because they are temporary employees," siding with the temporary employees.
It also judged that "the collective agreement or wage agreement with the union only imposes an obligation on the employer to pay the agreed salary to union members," and "it does not impose an obligation not to pay the same salary to non-union employees." Even if the agreement to pay bonuses to regular employees with the union is effective, it should not exclude temporary employees from receiving performance bonuses.
Considering that regular and temporary employees retired on the same day and performed the same duties, the court found that discrimination in bonus payments could not be justified.
Furthermore, the court pointed out that "according to the union's collective agreement, temporary and contract employees are excluded from union membership, so temporary employees had no channel to participate in or influence the wage agreement."
The court also rejected the company's claim that "performance bonuses are paid to reward service until retirement, and the temporary employees received the benefit of working beyond the retirement age." The court stated, "Even if they provided labor beyond the retirement age, it cannot be seen as receiving a unilateral benefit."

scottchoi15@fnnews.com Choi Eunsol Reporter