The Seoul High Court has ruled that Hana Securities' salary peak system is valid, resolving conflicting lower court decisions on the same workplace policy.
According to legal sources on Wednesday, the Seoul High Court's 15-2 Civil Division and 1-3 Civil Division both ruled against former Hana Securities employees in separate wage lawsuits. The 1-3 Civil Division notably overturned a lower court ruling that had partially favored the plaintiffs.
Hana Securities extended its mandatory retirement age from 58 to 60 in March 2017. The company simultaneously introduced a salary peak system that adjusted wages based on employee age, with varying application periods and reduction rates.
Lower courts had reached opposite conclusions on the system's validity. The Seoul Central District Court upheld the salary peak system, while the Seoul Southern District Court invalidated it as age-based discrimination. The Southern District Court noted the system actually reduced real wages during the extended employment period.
The appellate courts, however, focused on the financial industry's performance-based compensation structure and reached identical conclusions in both cases. The courts found that the financial sector offers higher wages than other industries and that Hana Securities' reduction rates were not unusually high compared to similar financial firms.
"The salary peak system reduces only fixed salary components, while performance bonuses remain unchanged or may even increase," the court stated. "Workers subject to the salary peak system appear to have received higher total compensation, including performance bonuses, than they would have without the system."