SPC Group, the operator of South Korea's largest bakery franchise, Paris Baguette, said Wednesday that it has dropped it suit against the government over an employment dispute following a recent deal with the country's two umbrella union organizations.

The franchise's operator filed the case against the Ministry of Employment and Labor in October seeking to nullify the ministry's order to directly hire more than 5,300 outsourced bakers and cafe workers, to whom the firm had been giving direct work orders.

The ministry said the practice was illegal and warned that it would levy up to 53 billion won ($48.75 million) in fines -- 10 million won per worker -- if the hiring condition was not adjusted.

SPC's decision came less than two weeks after it reached a deal with the umbrella union organizations to set up an affiliate to hire the bakers, effectively ending the monthslong controversy. SPC said it will own at least 51 percent of the affiliate. (Yonhap)