The American Chamber of Commerce in Korea on Wednesday urged the Korean government to carefully handle the base wage policy, ahead of the court‘s ruling on Kia Motors’ case scheduled for Thursday.
AmCham expressed concerns that the Seoul Central District Court ruling against Kia Motors may bring in great impacts on the overall competiveness of the nation‘s economy. The court is to rule on whether to acknowledge the workers‘ demand to recognize their bonuses as part of their ordinary wages.
(Yonhap)
“Well-intended policies may have unexpected influence on the competiveness of an economy,” the group said in a statement. “Increased labor costs will have significant impacts on international companies’ investments in Korea,” it added.
According to a recent survey conducted by AmCham, almost half of all international companies currently operating in Korea have reported that they would consider reducing investments in Korea if rigid regulations continue to persist.
“Wage levels should be determined based on the trust between workers and management,” AmCham also said. “The government, corporations and the labor community must work closely in order to implement policies that facilitate a business community that abides by the global standard and makes a ‘business-friendly’ Korea,” it added.
The Seoul Central District Court‘s ruling can cost the company 3 trillion won ($2.65 billion) if it orders the company to count bonuses as part of workers’ basic wages. The ruling is likely to set a precedent for other Korean companies that are facing similar lawsuits.
By Shim Woo-hyun (
ws@heraldcorp.com)
