The Supreme Court has ruled that regular bonuses received by city bus workers from their bus companies are included in ordinary wages. Seoul city bus workers even went on strike last year and early this year, saying regular bonuses should be included in ordinary wages.
The Supreme Court's Third Division (presiding Justice Lee Suk-yeon) on the 30th partially reversed an appellate ruling that had partly sided with the plaintiffs in a wage lawsuit filed by employees of city bus company Donga Transportation against management, and sent the case back to the appellate court. The Supreme Court found that the allowances the workers are owed are greater than the appellate court had determined.
Donga Transportation workers filed suit in September 2016, arguing that regular bonuses should be included in ordinary wages and that overtime pay should be recalculated and paid on that basis. They also sought allowances recalculated based on actual working hours that reflect vehicle refueling time and other factors.
Management argued that regular bonuses do not constitute ordinary wages. It also claimed the workers miscalculated their actual working hours and therefore must return the allowances they were overpaid.
The court of first instance found it could not conclude that regular bonuses constitute ordinary wages. However, it partially granted the workers' claims related to actual working hours.
In October last year, the appellate court found that regular bonuses are included in ordinary wages. It followed the rationale of the Supreme Court en banc ruling at the end of 2024, which held that regular bonuses with a "incumbency condition" or a "number-of-working-days condition" also qualify as ordinary wages. The appellate panel also calculated overtime and night-work allowances based on actual working hours.
The Supreme Court held that allowances must be recalculated based on ordinary wages reflecting regular bonuses, and that management must pay workers the allowances they were underpaid.
Although the thrust is the same as the appellate ruling, the specific method of calculating allowances differs, so the case was partially reversed. The Supreme Court said that since labor and management had agreed that "regardless of actual working hours, a certain amount of time is deemed overtime or night work," the agreed guaranteed hours must be used as the standard even if actual working hours are less than the guaranteed hours. Once the remand judgment is finalized, management is expected to pay workers more than the amount calculated by the appellate court.
Since the Supreme Court en banc ruling in 2024, city bus workers nationwide have been staging strikes in various places seeking to have regular bonuses reflected in ordinary wages. On Jan. 13–14, Seoul city bus workers also went on strike.
At the time, the Seoul City Bus Labor Union demanded unpaid wages based on the appellate decision in the Donga Transportation case. The union said the management side, the Seoul Bus Transport Business Association, refused to pay wages on the grounds that it had appealed to the Supreme Court, and labor-management talks broke down in January, leading to a strike.
If regular bonuses are included in ordinary wages, allowances and other pay received by city bus workers will increase. In that case, the amount of financial support the Seoul Metropolitan Government must provide to Seoul's city bus companies, which are in chronic deficit, could also grow.