SK Telecom withdraws from ‘low performers expulsion system’, court “Pay wages”

▲ Capture of SK Telecom’s YouTube advertisement video

It is illegal for SK Telecom to cut the wages of employees who refused special retirement due to unfair personnel evaluation, such as forming a team based on low performers. The court judged that if a company created a work environment in which the results of the personnel evaluation were inevitably poor by assigning tasks that were difficult to achieve goals in order to expel low performers, it was illegal to issue a telegram.

Lowest grade for 3 years in a row for employees who refused special retirement
Wage lawsuit filed over Supreme Court ruling on ‘unfair job change’

The Civil Division 38-1 of the Seoul High Court announced on the 1st that it had won some of the plaintiffs in a wage claim lawsuit filed against the company by four SK Telecom employees, including Mr. A, of SK Telecom. If the judgment is confirmed as it is, the four employees will receive about 330 million won out of the 510 million won claim.

SK Telecom implemented a special retirement system in March 2015. Retirement applications were expanded to include those who have worked for more than 15 years and those who have worked for more than 10 years and are over 45. Of the 4,100 incumbents, 310 have retired.

Four people, including Mr. A, also joined the company between 1989 and 1996 and met the conditions for special retirement, but rejected the recommendation of their superiors for special retirement or all-out. Then, in December of that year, the company transferred them to the E team of the metropolitan area marketing headquarters.

Person A, who was transferred to Team E, received the ‘lowest grade’ in the personnel evaluation. Person A, who received the lowest grade from 2014 to 2017, did not receive a performance pay for 2015 to 2017, and was the lowest grade for three consecutive years, resulting in a 2% reduction in basic salary from 2017. B, C, and D also received the lowest grade from 2015 to 2017, and their basic salary was reduced. B and D received the lowest grade in 2018 as well. This is in accordance with the ‘differential performance pay’ system, which states that if the lowest grade is 3 years in a row, no performance pay is paid and the base pay is reduced by 2%.

Mr. A and others filed an application for relief with the Seoul Regional Labor Relations Commission in March 2016, claiming that the job was unfair. However, the Seoul Gino Committee rejected it, stating that “the issue of a telegram does not correspond to a change in the labor contract that requires the consent of the employees, and the necessity for work is recognized.” On the other hand, the Central Committee overturned the initial decision and recognized the job change as unfairly, and the company filed an administrative lawsuit, but in June 2018, the Supreme Court lost the decision. In December 2017, the company carried out organizational restructuring and abolished Team E, and Mr.

Judgment of ‘illegal’ in personnel evaluation in 2016~2017
“Wage reduction by giving the lowest grade violates social order”

When the judgment of ‘unfair job change’ was finalized, Mr. A and others filed a lawsuit in September 2018, saying, “Pay the difference between the wages and severance pay that you would have received if there had been no illegal personnel evaluation and the actual wages.” They argued that “the 2015 personnel evaluation was made for the purpose of discriminating against those who refused special retirement and forcing and coercing them to leave,” they argued. In the 2016-2017 HR evaluation, it was judged that it received the lowest grade due to the work method that maintained low performance. He emphasized that the 2018 personnel evaluation was a retaliatory measure for the unfair job change request.

Regarding the 2016-2017 personnel evaluation, the first trial judged, “The reduction in wages by giving the lowest level of personnel evaluation is a violation of social order beyond the acceptable limits in light of the purpose of the Constitution and the sound common sense and legal opinion of our society.” It was judged that it was an unfair personnel evaluation that abused discretion. The court said, “The difference in the ratio of the lowest HR evaluation between team E team members and general employees is due to the company’s discriminatory intention. It is difficult to see.”

However, it was not illegal for personnel evaluations in 2015 and 2018. It was due to the fact that it was evaluated that the work of Mr. A was inexperienced as well as the past personnel evaluation.

Based on this, the court ruled, “It is obligatory to pay the interim payment of wages, performance pay, and severance pay recalculated based on the 2016-2017 personnel evaluation grade B.” The appeals court also found that the first instance judgment was correct.

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