The standing special prosecutor's office investigating allegations of unpaid severance at Coupang has sent former and current heads of Coupang Fulfillment Services (CFS) and the corporation to trial.
On the 3rd, the special prosecutor said it indicted former CEO Eom Seong-hwan, current CEO Jeong Jong-cheol, and the CFS corporation on charges of violating the Employee Retirement Benefit Security Act. The office said Eom and others changed the standard for paying severance to a method disadvantageous to day laborers starting in Apr. 2023 and are accused of failing to pay about 120 million won in severance that should have been paid to a total of 40 people.
According to the special prosecutor, the point of contention is the change to the "15 hours per week" standard. The company is identified as having changed its rules related to severance payment from "for day laborers, if they work more than one year, only periods with fewer than 15 hours per week are excluded" to "for those who work more than one year and have at least 15 hours per week." Because it required recalculating the severance calculation period from the time any day within the employment period included a week with 15 hours or fewer, it was also called the "severance reset rule."
The special prosecutor determined that although the rule change was finalized through a revision of the employment rules in May 2023, the payment standard was unilaterally changed and implemented without hearing workers' opinions by altering internal guidelines starting on Apr. 1, 2023. It also said there were procedural defects in the process of revising the employment rules in May 2023.
Considering Coupang's hiring scale and future hiring outlook, the special prosecutor defined this case as "a serious matter in which the company pursued profit through an attempt at massive infringement of workers' rights and interests." It also suggested that, given the group structure listed in overseas capital markets, there was a possibility it could lead to "overseas outflow of national wealth." In addition, it said the case could become an important milestone in determining the status of platform workers hired and working in a form similar to CFS as regular employees.
Meanwhile, the special prosecutor said it is continuing to investigate allegations that external pressure was exerted to dispose of the case as no charge. The focus includes allegations that then-Bucheon District Prosecutors' Office chief Um Hee-jun and others pressed for a case that the Bucheon branch of the Seoul Regional Employment and Labor Office had referred with a recommendation to indict to be dismissed. Citing suspicions of excluding the lead prosecutor at the time and ordering key materials to be left out of investigation reports, the special prosecutor said it had secured numerous pieces of evidence sufficient to prove the charges, contrary to the Bucheon office's opinion of "no suspicion."