terms of human rights, the right not to be forced to work by the state is very important, and
if such right is to be restricted, very strict requirements in line with the Constitution and
international human rights standards are necessary.
3) Significance of the Supreme Court Ruling on the Wage Peak System
A) Supreme Court Decision and Impact on the Wage Peak System Based on Age
Only
On May 26, 2022, the Supreme Court upheld the judgment of the lower court in favor of
some of the plaintiffs in the trial of the wage claim filed by a retired researcher.554)
Prohibiting discrimination on the grounds of age for recruitment, employment and wage,
etc. under Article 4-4(1) of the Act on Prohibition of Age Discrimination in Employment
and Elderly Employment Promotion (hereinafter referred to as the ‘Elderly Employment
Act’) is compulsory, and any contrary terms in the employment contract is null and void. In
conclusion, if the retirement age wage peak system is implemented without countermeasures
to the wage cuts solely based on age without a reasonable reason, then it is invalid.
The research institute changed the employment rules through labor-management
agreement in 2008 and introduced a wage peak system that reduces the wages of researchers
aged 55 or older from 2009. Since the introduction of the system, the monthly salary of
researchers aged 55 and older has decreased by between 930,000 and 2.83 million KRW,
depending on the results of performance evaluation. The wage peak system is a system that
adjusts wages in exchange for guaranteeing employment to workers until they reach a
certain age.555)
This is the first time the Supreme Court has presented criteria for determining the
effectiveness of the wage peak system. The lower court precedents have recognized the
554) Supreme Court, Decided on May 26, 2022, 2017Da292343
555) The types of wage peak systems are the retirement age maintenance type (reducing or freezing wages while
guaranteeing the retirement age set by labor-management agreement), the retirement age extension type (a type
of wage reduction from a certain point while extending the existing retirement age), and the re-employment type
(retirees after the retirement age). Re-employment while reducing wages after retirement) and working hour
reduction (reducing the prescribed working hours per week in conjunction with the extension of retirement age or
re-employment and reducing wages by 30% or more compared to peak wages).
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