K&P Law Firm, Songdo, Incheon
Attorney Tae Jin Kim
I. Conclusion
The court has ruled that it's discriminatory for a company to withhold the payment of internal evaluation salaries from employees who perform similar work, yet hold different job titles within the organization.
Companies should not discriminate between permanent and fixed-term employees without a valid reason.
A 'valid reason' is defined as the following:
- A recognized need to treat fixed-term employees differently, or, even if there is a need for differential treatment, the method and degree of such treatment are deemed inappropriate. The determination of a 'valid reason' is case-specific and will depend on the nature of the unfavorable treatment in question, the reasons cited by the employer for the unfavorable treatment, the type of employment of the fixed-term worker, the content, scope, authority, and responsibility of the work, wages, and other working conditions.
(See, for example, the Supreme Court's decision of November 27, 2014, 2011 Du 5391).
II. Case Details
(This blog post is an adaptation from the Seoul High Court's judgment of October 21, 2022, 2021 Nu 52688).
'A' joined the Korea Horseracing Association as a commissioned worker, transitioned to a permanent position with an indefinite contract in January 2010, and after reaching the retirement age for permanent employees, left the organization and was rehired as a commissioned worker.
A's responsibilities included gathering information on horse racing irregularities and assisting in investigations.
In January 2020, 'A' lodged a complaint with the Gyeonggi Provincial Labor Commission, alleging that the Korea Horseracing Association had practiced discrimination by not providing an internal evaluation salary and fixed-term salary compared to permanent employees executing similar work.
The Gyeonggi Provincial Labor Commission approved the remedial application, ruling it discriminatory for the Korea Horseracing Association to withhold internal evaluation salary and regular salary for 2017 and 2019 respectively, from A, and ordered monetary compensation.
The Korea Horseracing Association appealed this decision to the Central Labor Commission. In July 2020, the Central Labor Commission partially overturned the Gyeonggi Provincial Labor Commission's decision, determining that while there was unfavorable treatment as the Korea Horseracing Association did not pay A the internal evaluation salary and regular salary in comparison to comparable workers, there were valid reasons for not providing A with the internal evaluation salary and regular salary.
'A' then filed a lawsuit, asserting that "there was no agreement with the Korean Horseracing Association to withhold internal evaluation salary and regular salary, hence there's no valid reason for the discriminatory treatment."
III. Court's Judgment
The court ruled in favor of 'A', stating that "the main duties of the full-time employee and the commissioned employee, 'collecting information on horse racing irregularities,' are the same, with minor differences in the method and object of collecting irregularities. Both roles gather information on horse racing security to ensure the fairness of horse racing. Despite organizational and personnel changes, it's challenging to see that the main tasks of a full-time employee and a commissioned employee have changed to the extent that there is a fundamental difference."
The relevant legal principles are as follows:
(1) Article 8(1) of the Act on the Protection of Fixed-term and Short-term Employees (hereinafter referred to as the "Fixed-term Employment Act") provides as follows.
Article 8 (Prohibition of Discriminatory Treatment) ① An employer shall not discriminate against a worker who is a fixed-term worker on the grounds that he/she is a fixed-term worker compared to a worker who has signed a labor contract without a fixed period of time engaged in the same or similar work in the business or workplace. <Revised May 26, 2020>
The employer shall not discriminate against a worker engaged in the same or similar work at the business or workplace on the grounds that he/she is a short-time worker. <Revised 2020. 5. 26.>
The work of a worker selected as a comparative worker should be judged based on the actual work they are performing, not on the work specified in the employment rules or labor contract. Even if the work they perform isn't completely identical, and there are some differences in the scope of work or responsibilities and authority, if there's no fundamental difference in the content of the main work, they shall be considered to be engaged in the same or similar work unless there are special circumstances (see, for example, the Supreme Court's judgment of November 27, 2014, 2011 Du 5391).
(2) Article 2(3) of the Fixed-term Employment Act defines discriminatory treatment as "unfavorable treatment without reasonable cause in wages or other working conditions." Here, unfavorable treatment refers to the overall disadvantage caused to a fixed-term worker by an employer treating a fixed-term worker and a comparable worker differently in terms of wages and other working conditions (see, for example, the Supreme Court's judgment of October 25, 2012, 2011 Du 7045).
The absence of a reasonable reason implies that the need to treat a fixed-term worker differently is not recognized, or even if the need to treat a fixed-term worker differently is recognized, the method and degree of treatment are not appropriate. Whether there is a reasonable reason shall be determined by comprehensively considering factors such as the type of employment of the fixed-term worker, the content, scope, authority, and responsibility of the work, wages, and other working conditions, based on the content of the unfavorable treatment in question in each case and the circumstances that the employer used as the reason for the unfavorable treatment (see, for example, the Supreme Court's judgment of November 27, 2014, 2011 Du 5391).
(3) If a fixed-term employee claims wage discrimination compared to a comparable worker because he or she is a fixed-term employee, it shall be determined whether there is unfavorable treatment compared to the comparable worker by detailed wage items in which the fixed-term employee claims unfavorable treatment. However, if there are special circumstances that make it difficult or inappropriate to make an item-by-item comparison, such as when the wages of a fixed-term employee and a comparable employee are composed of different items, or when a fixed-term employee is treated less favorably than a comparable employee in certain items but more favorably in other items, the interrelated items should be categorized and compared.
The amount of wages received by the fixed-term employee and the amount of wages received by the comparable employee in each category should be compared to determine whether unfavorable treatment exists. In such cases, the determination of which category an item of wages belongs to must be made rationally and objectively by considering the basis for payment of the itemized wages received by the comparator, the object and its nature, the composition and calculation basis of the itemized wages received by the fixed-term worker, the reason or circumstances why the wages of a particular item were not paid to the fixed-term worker or were paid less, and the wage payment practices (see, for example, the Supreme Court's judgment of September 26, 2019, 2016 Du 47857).
===
Tel. +82 32 864 8300
Email: info@kimnpark.com
Please Visit our Website:
