Exclusive: 27 Former and Current Hyundai Motor Company Executives File Damages Lawsuit Over 'Holiday Discrimination'

[Financial News] Former and current managerial employees of Hyundai Motor Company have filed a lawsuit for damages against the company, citing discrimination in holiday regulations. They argue that a separate set of Rules of Employment, applicable only to managerial employees, resulted in holiday discrimination.
According to the legal community on the 22nd, 27 current and former managerial employees of Hyundai Motor Company filed a complaint with the Seoul Central District Court on the 17th. They claimed that 'the Rules of Employment for managerial employees violated Article 94, Paragraph 1 of the Labor Standards Act and that the discriminatory acts against managerial employees constitute a civil tort.' The plaintiffs are seeking compensation for wage differences and interest due to holiday discrimination, with individual claims ranging from 2 million to 20 million KRW.
The plaintiffs argue that Hyundai Motor Company has gained an unfair benefit of about 2 to 3 million KRW per person annually by discriminating between union and non-union members in terms of holidays through unlawful Rules of Employment. Specifically, they point out that seven paid holidays—including the company’s founding anniversary, the union’s founding anniversary, one day during the New Year’s holiday, one day during Lunar New Year, one day during Chuseok, Constitution Day, and Arbor Day—were removed from the previous Rules of Employment. In recent years, about three days, such as the company’s founding anniversary, have reportedly been reinstated as paid holidays.
Previously, around 2004, Hyundai Motor Company established separate Rules of Employment for managerial employees at the level of section chief and above, citing the revision of the Labor Standards Act (Act No. 6974). According to the plaintiffs, this process reduced seven holidays, eliminated monthly paid leave, and reduced annual paid leave, thereby worsening working conditions.
Hyun Seung-geon, one of the plaintiffs who won a Supreme Court Grand Bench ruling in May 2023 and a former head of the Hyundai Motor Company Research and General Staff Branch of the Korean Metal Workers' Union, stated, "No other company in Korea has established multiple Rules of Employment due to Act No. 6974."
He further explained, "Simply because they are non-union members, separate Rules of Employment were created for managerial employees, resulting in discrimination in holidays and annual leave, without obtaining consent through the collective decision-making process of workers." He added, "The introduction of the peak wage system in 2015 also discriminated against non-union members without reasonable grounds, constituting a civil tort."
The plaintiffs emphasized that, for the seven days of holiday discrimination that would have been calculated if the Rules of Employment for managerial employees had not been applied, 150% of the corresponding days should be paid as damages.
Seong-Uk An, an attorney at Soul Law Firm representing the plaintiffs, argued, "Discrimination in working conditions between union and non-union members due to multiple Rules of Employment (Rules of Employment for managerial employees) violates Article 11 of the Constitution of the Republic of Korea, Article 6 of the Labor Standards Act, Article 33 of the Trade Union and Labor Relations Adjustment Act, and other laws." He cited the Supreme Court Grand Bench’s decision, which held that unfavorable changes to Rules of Employment without collective consent from workers are invalid.
He continued, "Article 19, Paragraph 2 of the Rules of Employment for managerial employees, which considers only the base salary as ordinary wages for the payment of various allowances such as performance bonuses, also violates Article 6 of the Enforcement Decree of the Labor Standards Act." He added, "As a global company, it would be more desirable to ensure equal working conditions between union and non-union members to boost morale among non-union employees."
In response, Hyundai Motor Company stated that it would review the details of the complaint and check the progress.
This lawsuit includes employees scheduled to retire in 2025 and a retiree born in 1955 who previously won a lawsuit over unfair gains from annual and monthly leave at the Supreme Court. There is a possibility that about 12,000 current and former managerial employees of Hyundai Motor Company may file additional lawsuits in the future.
Meanwhile, the Supreme Court Grand Bench ruled in May 2023 that, in principle, unfavorable changes to Rules of Employment without the consent of a majority of workers are prohibited. Previously, the Supreme Court had exceptionally recognized changed Rules of Employment as valid if there was 'socially accepted rationality,' even without workers’ consent, but this precedent has now been changed.
Last year, these individuals also filed a lawsuit seeking differences in wages and annual/monthly leave allowances due to the implementation of the peak wage system.
scottchoi15@fnnews.com Choi Eun-sol Reporter