SEOUL– South Korea’s finance chief said Friday that the government will push to revise the country’s Labor Standards Act to fundamentally address the controversial issue of ordinary wages.

Finance Minister Kim Dong-yeon said in a meeting with economy-related ministers that the proposed revision is meant to clearly set the legal scope of ordinary wages.

The move came amid a strong backlash by the business community over a court ruling that regular bonuses should be included in the “ordinary wage” used as the basis for calculating overtime, severance and other payments.

On Thursday, the Seoul Central District Court ruled that fixed bonuses and meal allowances are part of ordinary salaries and that Kia Motors Corp., South Korea’s second-largest carmaker by sales, should pay an overdue amount of 422.4 billion won (US$376 million), or 38.7 percent of what the Kia Motors labor union originally requested.

Some claim the ruling will set an example for a barrage of other similar suits that are ongoing or will likely follow.

In South Korea, most businesses pay their employees a lump-sum bonus on a regular basis, aside from their ordinary salary. Firms argue that if a bonus is counted as ordinary wages, they will be forced to shoulder much greater financial burden, as the level of other benefits and allowances, such as overtime or retirement pay, must be based on the adjusted ordinary pay.

Kim said his government will strengthen its efforts to ensure there are no unnecessary disputes between labor and management as companies move to reform their wage systems.

Kim did not provide any further details of a proposed revision. It remains unclear whether the government can win the parliamentary blessing for a revision.

President Moon Jae-in’s ruling Democratic Party holds only 120 seats in the 299-member parliament, meaning that the ruling party cannot pass a bill without cooperation from opposition parties.

Kim also said the economy is on track for 3 percent economic growth this year due to increased exports, though he said the North Korea risk and diplomatic row with China will weigh on Asia’s fourth-largest economy.

Tensions have been running high on the Korean Peninsula over North Korea’s long-range missile and nuclear programs.

On Tuesday, North Korea fired an intermediate-range ballistic missile that flew over Japan in what North Korean leader Kim Jong-un says was a prelude to containing the U.S. Pacific territory of Guam.

In response, four U.S. F-35B stealth jets, two B-1B strategic bombers and four F-15K fighter jets from South Korea staged air-to-ground precision-strike drills on a shooting range near the tense inter-Korean border in the latest show of force against the North.

Adding to the woes, China has taken retaliatory steps against South Korea over its deployment of a U.S. missile defense system, dealing a blow to South Korean companies.

Lee also said the government will reform the management system of chemical substances to alleviate public concerns following a controversy over the safety of sanitary pads.

In March, an activist group and a team led by a college professor said that 22 kinds of harmful components were detected from 10 different sanitary pads. The manufacturers of the sanitary pads in question deny any use of harmful components.

 

 

 

Source: Yonhap News Agency