North Korea has refused to accept a protest letter from South Korea over its unilateral decision to amend the wage system for its workers at a joint industrial zone in its border city of Kaesong, a Seoul official said Tuesday.

The North earlier said it has scrapped the 5-percent cap on the annual increase rate in minimum wages for around 53,000 employees at the Kaesong Industrial Complex. It also announced plans to relax requirements for overtime and severance pay for them.

The South said the North's measure is unacceptable, becasue the working conditions for the Kaesong workers should be decided through inter-Korean agreement.

“The (South Korean) government tried to deliver a fax message regarding its formal position on the matter but the North refused to accept it,” the unification ministry official told reporters.

Pyongyang claims the revision of the wage and other regulations on the industrial complex  is an exercise of its sovereign rights, he added.

The official said Seoul will deal resolutely with Pyongyang's unilateral move.

The Kaesong Industrial Complex, launched in 2004, is a by-product of the historic inter-Korean summit in 2000. It currently houses about 120 South Korean garment and other labor-intensive plants. (Yonhap)