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[Representation] HR/Labor
A case in which Barun Law obtains the decision that the wage peak system is valid
1. Overview of the case
The defendant, represented by Barun Law, is a company engaged in manufacturing and selling alloy steel. The plaintiff is a retired employee who was subject to the wage peak system. The plaintiff claimed that the wage peak system applied to him was invalid and sought payment of wages and severance pay that were reduced due to the wage peak system.
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2. Issues
The issues in this case were whether (1) the wage peak system violated the principle of equal pay for equal work; (2) the wage peak system constituted wage discrimination based on age without reasonable cause and violated the the Employment of Senior Citizens Act; (3) there was an individual annual salary contract between the defendant and the plaintiff that was more favorable than the operating regulations of the wage peak system, so that the contract took precedence; and (4) the procedure for disadvantageous changes to employment rules was violated in the introduction of the wage peak system.
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3. Decision
The Seoul Southern District Court held that the wage peak system in this case did not violate the principle of equal pay for equal work, nor did it constitute age discrimination without reasonable cause, which is prohibited by the Employment of Senior Citizens Act. The court also dismissed the plaintiff's claim, finding that the defendant's introduction of the wage peak system did not constitute an unfavorable change to the employment rules, as there was no violation of the change procedure, but rather that all necessary procedures were followed, and that there was no evidence that the defendant and the plaintiff had a salary contract that was more favorable than the operating regulations of the wage peak system.
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4. Our argument and role
By explaining in detail the background and nature of the wage peak system, and extent of the wage reduction, as well as the legal basis in the relevant laws, we were able to argue that the wage peak system was not disadvantageous to the workers and was therefore justified, which led to a favorable outcome in which the introduction of the wage peak system was recognized as not constituting a disadvantageous change in employment rules.
□ Attorneys in charge: Jung Sang-tae, Hwang Seo-woong, Jeong Eun-ha