Permanent Special Prosecutor Team for Kwan Bong-kwon and Coupang summons former Coupang CFS head Eom Sung-hwan as suspect over unpaid severance

[The Financial News] The Permanent Special Prosecutor Team for Kwan Bong-kwon and Coupang, led by Special Prosecutor Ahn Gwon-seob, has summoned former Coupang Fulfillment Services (CFS) CEO Eom Sung-hwan as a suspect on charges of violating the Act on the Guarantee of Employees' Retirement Benefits, as part of its investigation into allegations that Coupang failed to pay severance benefits.
In a press notice on the 26th, the special prosecutor team stated, "From 10 a.m. today, we have been questioning former CEO Eom, who has been summoned as a suspect," announcing the move.
Eom is suspected of having changed the work rules of Coupang Fulfillment Services (CFS) in May 2023 in a way that was disadvantageous to employees, and of failing to pay money that was in effect severance benefits.
At the time, Coupang revised its rules on severance-related payments from "even daily workers are entitled to severance if they work for more than one year, excluding only periods when their weekly working hours are less than 15 hours" to "workers who have been employed for more than one year and whose weekly working hours are at least 15 hours." Under the new rule, if there was even a single day during the employment period when the weekly working hours fell below 15 hours, the period used to calculate severance pay would be reset from that day. This was also referred to as the "severance reset rule."
Internal documents produced by Coupang around this time, including those on the so-called "improvement of the daily worker system," described the purpose of the rule change on severance payments and also stated, "We will not separately communicate to daily workers the concepts of annual leave, severance pay, or interruption of service, and in the event of objections, we will respond on a case-by-case basis."
Earlier, when the special prosecutor team raided Coupang's headquarters, the offices of Coupang Fulfillment Services (CFS), and locations linked to former CEO Eom, the search warrants specified suspected violations of the Act on the Guarantee of Employees' Retirement Benefits.
The allegation is that the company failed to fulfill its obligation to pay severance within 14 days after an employee leaves the company.
Under the Act on the Guarantee of Employees' Retirement Benefits, employees are entitled to severance pay if they have worked continuously for at least one year and their average weekly working hours over four weeks are at least 15 hours.
The special prosecutor team believes that workers at Coupang's logistics centers were under the direct instruction and supervision of the employer and that, due to repeated renewals of their employment contracts, they provided labor for more than one year. On this basis, the team considers them eligible for severance pay.
The special prosecutor team plans to question former CEO Eom about the background to the change in work rules and the decision-making process that led to it.
kyu0705@fnnews.com Kim Dong-gyu Reporter