With the Supreme Court ruling that Samsung Electronics' "target incentive" is included in the average wage used to calculate severance pay, similar lawsuits are following at Samsung affiliates.
According to the legal community on the 13th, 13 former employees of Samsung Electronics Service filed a lawsuit on the 12th with the Seoul Eastern District Court against Samsung Electronics Service to claim unpaid severance pay.
In addition, 38 former employees of Samsung Electronics filed an additional lawsuit with the Seoul Central District Court to claim management performance bonuses. At Samsung Electronics, a total of 164 former employees have filed additional lawsuits so far since the Supreme Court ruling.
Retirees from Samsung SDS, Samsung C&T, Samsung E&A, Samsung Biologics and other Samsung affiliates, as well as Dong-A Pharmaceutical Co., are reportedly reviewing lawsuits.
Former employees of Samsung Electronics said they filed suit, arguing that in June 2019 the company paid severance based on an average wage that excluded management performance bonuses such as target incentives and performance incentives, and asked for the unpaid portion.
The average wage is calculated by dividing the aggregates of wages received during the three months before retirement by the number of days in that period, and the higher the average wage, the more the severance pay increases.
On Jan. 1, the Supreme Court found that Samsung Electronics' criteria for paying target incentives were set in advance and that they were paid regularly, and therefore should be included in the average wage.
However, for performance incentives, it said they are "closer to an ex post distribution of management performance than an ex post settlement of work performance," and ruled they cannot be regarded as wages.
While the Supreme Court applies the same legal principles in judging whether management performance bonuses constitute wages, it is reaching different conclusions depending on the nature of the bonuses at each company. Previously, severance suits filed by workers at SK hynix and Hanwha Ocean were dismissed by the Supreme Court.