“All Samsung affiliates have fixed OT (overtime pay) as an allowance item. The Supreme Court ruling is expected to affect the regular wage status of (Samsung) fixed OT.”

A lawyer at a large law firm predicted that similar disputes could continue following the Supreme Court ruling three years ago recognizing the fixed OT paid by Samsung SDI to production workers (hourly wage) as ordinary wages. This prospect has become a reality.

Supreme Court approves fixed OT normal wage for Samsung SDI production workers

Fixed OT is a salary item that assumes that a certain number of additional hours have been worked and is paid accordingly. For example, if you decide to pay 20 hours of fixed OT, you will be paid an allowance equivalent to 20 hours even if you work 15 hours.

The Samsung SDI case is known as a precedent in which the regular wage status of fixed OT was denied, but the opposite judgment was made only for production workers. Ordinary wages are money and valuables paid in return for specific work that the company and the worker have agreed upon in advance. It became an issue in the trial to determine whether fixed OT was compensation for regular work or overtime work.

In the case of Samsung SDI office workers (salary system), fixed OT was paid in return for overtime work. Even if they actually worked overtime, they were only paid fixed OT without any additional allowance.

Production work was different. If you worked overtime or at night while receiving the fixed OT allowance, you received the corresponding allowance separately. This means that fixed OT was not money or valuables paid in return for overtime work.

On November 11, 2021, the Supreme Court made different rulings in the wage claim lawsuit filed by two Samsung SDI office workers and production workers against the company. It was determined that the fixed OT paid to office workers was not ordinary wages, but the fixed OT paid to production workers was judged to be equivalent to ordinary wages.

After Samsung SDI ruling, fixed OT dispute spread to affiliates

The reason workers file ordinary wage lawsuits is ultimately to receive more overtime, night, and holiday work allowances and annual leave allowances. These allowances are calculated based on ordinary wages. The structure is such that as the number of salary items corresponding to ordinary wages increases, the allowance also increases.

Immediately after the Samsung SDI ruling, only the point that fixed OT is not included in ordinary wages was highlighted, leading to speculation that similar disputes would subside. However, even the lawyer who represented Samsung SDI in the case of fixed OT for production workers expressed the opinion, “This ruling cannot determine that all companies’ fixed OT is not ordinary wage.”

In fact, the dispute surrounding fixed OT transferred to Samsung Fire & Marine Insurance and Samsung Display. Last year, a lower court ruled that Samsung Fire & Marine Insurance’s fixed OT cannot be considered ordinary wages. The same conclusion was reached as for the Samsung SDI office workers.

A ruling was made that fixed OT at Samsung Display falls under normal wages, just like production workers at Samsung SDI. The 17th Civil Division of the Suwon District Court (Presiding Judge Maeng Joon-young) ruled in August that “fixed OT is also ordinary wage” in a wage claim lawsuit filed against the company by 3,850 former and current Samsung Display workers. At the same time, it ruled that overtime and night work allowances should be recalculated based on regular wages, including fixed OT, and the difference should be paid.

Samsung Electronics is also on fire… Jeon Sam-no announces recruitment of litigants this month

As the Samsung Display ruling came out, concerns grew among companies that pay fixed OT instead of comprehensive wages. If you are involved in a similar dispute and lose the case, the burden of labor costs will increase accordingly.

The spark flew to Samsung Electronics. The National Samsung Electronics Workers’ Union (Jeonsamno) announced last September that it would pursue a lawsuit to the effect that fixed OT should be included in ordinary wages. Jeon Samno argues that not only fixed OT but also holiday bonuses and personal pension company subsidies should be included in ordinary wages.

Jeon Samno gathered 406 applicants and sent a letter (certification of contents) containing these claims to the company. People to participate in the event are scheduled to be recruited within this month. Jeon Samno said in a recent newsletter, “As a result of the legal review, there is a possibility of winning the ordinary wage lawsuit, so we decided to proceed with the lawsuit by sending a letter to the company through advance recruitment.” He added, “Recently, Samsung Fire & Marine Insurance and Samsung Display have partially ruled in favor of the lawsuit.” “I received it,” he said.

An official from Jeon Samno said, “This is a debate over what is included in ordinary wages, so not only fixed OT will be included, but also various things will be included, so we believe that the outcome of the trial may result in some wins and some losses.”

Kim Dae-young, Hankyung.com reporter kdy@hankyung.com