[Exclusive] 'Suspected Death from Overwork' at London Bagel Museum... Report Filed for Unpaid Severance Pay

[Financial News] The bakery brand London Bagel Museum (London Bagel Museum), currently under labor inspection due to suspicions of an employee's death from overwork, is now facing an investigation by labor authorities after a report was filed regarding unpaid severance pay. The Ministry of Employment and Labor (MOEL) had already expanded its supervision to all branches and affiliates after identifying potential violations of the Labor Standards Act, such as excessive working hours. With wage payment issues now surfacing, the controversy is expected to intensify.
According to data submitted by the office of Kim Joo-young, a member of the Climate, Energy, Environment and Labor Committee of the National Assembly, the Seoul Eastern District Office of Employment and Labor received a report on July 29 regarding unpaid severance pay at London Bagel Museum and is currently investigating the matter. However, details such as the exact amount in arrears and the progress of the investigation have not yet been disclosed.
An official from MOEL stated, "We are currently verifying the facts regarding the report of unpaid severance pay at London Bagel Museum," and added, "If any violations of the law are found, strict action will be taken."
Previously, MOEL launched a labor inspection into London Bagel Museum’s headquarters and Incheon branch after an employee died following extended working hours. The scope of the inspection was then expanded to all London Bagel Museum locations (seven stores and three factories) and its operating affiliates, including one Artist Bakery location, four Cafe Layered locations, and two Highwaist locations. With allegations of '80-hour workweeks' and now unpaid severance pay, there is speculation that the investigation may broaden further.
The labor community asserts that the London Bagel Museum case highlights the harsh realities faced by young workers and structural issues within the franchise industry, urging a thorough investigation. Kim Joo-young commented, "The death from overwork and wage arrears at London Bagel Museum are neither new issues nor unique to this company," and pointed out, "This incident once again exposes the painful reality of persistent long working hours, worker exploitation, and wages sacrificed for profit."
He emphasized, "Practices that infringe upon workers’ lives and rights under the pretext of labor shortages and cost reduction can no longer be tolerated," and added, "The government and National Assembly must actively respond to these clear legal violations and social crimes."
Wage arrears have been worsening across all industries in recent years. According to MOEL, the total amount of unpaid wages increased from 1.583 trillion won in 2020 to 2.0448 trillion won last year, surpassing 2 trillion won for the first time. Meanwhile, the number of cases receiving free legal aid for affected workers fell by about 40%, from 90,174 to 54,913 during the same period. Support for full legal proceedings to recover unpaid wages also dropped by more than 55%.
In response, MOEL began implementing punitive measures last month, such as allowing claims for punitive damages up to three times the amount of unpaid wages and imposing travel bans on employers who intentionally withhold wages. The ministry is also preparing to increase the maximum criminal penalty for wage arrears from three to five years in prison under the Labor Standards Act. To address unpaid severance pay, the government plans to make retirement pensions mandatory at all workplaces by 2030.
Experts advise that more fundamental solutions are needed. Juhee Lee, a professor of sociology at Ewha Womans University, noted, "Although the number of workers in legal and institutional blind spots—such as small businesses, non-regular, and platform workers—has surged, the current system still centers on traditional regular employment."
She added, "The law should be amended to impose joint responsibility on franchise headquarters for working conditions at their branches, and administrative support should be strengthened to ensure real changes on the ground. For wage arrears, effective penalties—such as allowing damages up to ten times the unpaid amount—are needed to raise employer awareness."
yesji@fnnews.com Kim Ye-ji Reporter