GM Korea to count regular bonuses as ordinary wages

By Korea Herald
  • Published : Jul 20, 2014 - 21:21
  • Updated : Jul 20, 2014 - 21:21
GM Korea, the local unit of U.S. automaker General Motors, offered to count regular bonuses paid to its employees as part of their ordinary wages, company officials said Friday, becoming the first in the car industry to settle one of the most contentious issues in management-union negotiations this year.

The proposal, made Thursday during wage talks, was welcomed by the union, company officials said.

The new wage system is expected to go into force from Aug. 1, although the company union wants it to be applied retroactively from January. The two sides plan to resume their negotiations next week.

The Supreme Court had ruled last December that bonuses paid on a regular basis should be counted as ordinary wages, which are used as the basis for setting allowances such as overtime pay, holiday shift pay and paid annual leave, as well as pension.

Most companies have been reluctant to apply the ruling, citing higher labor costs at a time of poor business performance.

Last Friday, unionized workers at GM Korea voted to go on strike for the new wage system.

Hyundai Motor, South Korea’s largest carmaker, and Hyundai Heavy Industries, the world’s No. 1 shipbuilder, also have been in negotiations with their labor unions to discuss the scope of ordinary wages. (Yonhap)