A wave of lawsuits demanding the inclusion of performance bonuses in severance pay calculations is spreading across Samsung affiliates following a Supreme Court ruling on Samsung Electronics' "target incentive" program.
According to law firm Apro on the 13th, 13 former employees of Samsung Electronics Service filed a lawsuit at Seoul Eastern District Court the previous day seeking unpaid severance pay related to management performance bonuses.
Beyond Samsung Electronics Service, former employees of Samsung SDS, Samsung C&T, Samsung E&A, Samsung Biologics, and Dong-A Pharmaceutical are currently reviewing similar legal action.
"Samsung affiliates have wage structures similar to Samsung Electronics, which gives them a high probability of winning," said Park Chang-han, managing partner at Apro, which represents former employees of Samsung Electronics Service and other Samsung affiliates. "Given that the statute of limitations for wage claims is only three years, swift action is necessary."
An additional 38 former Samsung Electronics employees have filed performance bonus claims at Seoul Central District Court. Since the Supreme Court ruling, 164 former Samsung Electronics employees have filed lawsuits through Apro.
The cascade of follow-up lawsuits stems from the Supreme Court's January ruling that Samsung Electronics' "target incentive" must be included in average wages used for severance pay calculations. The court determined that the target incentive qualifies as wages because payment criteria are predetermined, continuous, and constitute regular compensation for labor, thus warranting inclusion in average wage calculations.
However, the Supreme Court has reached different conclusions for different companies based on the specific nature of their bonus programs while applying the same legal principles to determine wage classification of performance bonuses. Former employees of SK Hynix and Hanwha Ocean lost their severance pay lawsuits at the Supreme Court.