validity of the wage peak system for extending the retirement age, as long as it was
introduced through labor-management discussion as a measure accompanying the extension
of the retirement age in accordance with Article 19-2 of the Elderly Employment Act, it does
not fall under age discrimination.556) Even in the case of the wage peak system for
maintaining the retirement age like the current case, there are many precedents that have
recognized that the wage peak system is valid considering the purpose of introducing the
wage peak system, although the degree of disadvantage is greater than that of extending the
retirement age.557)558)
The labor groups generally welcomed the Supreme Court ruling, saying they plan to
encourage the abolition or abolition of the wage peak system. Until now, the labor groups
have argued that the wage peak system should be abolished as it has little effect on promoting
new employment of young people, while only reducing the wages of the workers.559)
On the other hand, the business groups assert that if ruling on the illegality of the wage
peak system is maintained, the burden on the businesses will increase and it will cause job
insecurity. In the case of large companies, there is a prospect that there will not be a big
impact as they are already adjusting the working hours and workloads for employees who
apply the wage peak system. However, there are assertions that confusion is expected in the
labor-management negotiation process due to ambiguity with the Supreme Court’s judgment
criteria.560)
On the other hand, the NHRCK decided, through related complaints in November and
December, that if a worker, whose retirement age is set according to relevant regulations,
applies the wage peak system without any reduction in work intensity or working hours, the
‘principle of equal pay for equal work’ will be violated, and if it operates as a means of
expelling employees by excessively reducing wages after a certain age, it may be considered
556) Seoul High Court, Decided on Dec. 14, 2021, 2019Na2029394; Seoul High Court, Decided on Dec. 8, 2021,
2020Na2021662; Incheon District Court, Decided on Feb. 23, 2022, 2019GaHap61600
557) Ulsan District Court, Decided on Dec. 23, 2021,2020GaDan106120; Seoul High Court, Decided on Aug. 18, 2021,
2020Na2027769; Ulsan District Court, Decided on Feb. 5, 2021, 2019GaDan14560
558) Legal Times, Meaning of the recent Supreme Court decision regarding the wage peak system, Jun. 21, 2022.
559) Yonhap News, The labor community welcomes the ruling on the invalidity of the age discrimination wage peak
system ... “Encourage abolition,” May 26, 2022.
560) Donga Ilbo, The business groups welcoming the invalidation of the wage peak system, May 26, 2022.
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