We wish to update you concerning a recent decision by the Seoul Regional Labor Relations Commission ("SRLRC"), which upheld a company's practice of paying fixed bonuses to its fixed-term employees, but not to its dispatched workers.  In arriving at this outcome, the SRLRC found that the company's action rested on reasonable grounds, as described below: 

• In light of the different wage structures in place at the company and the manpower supply company, the aggregate pay amount (rather than each pay item) should be considered in assessing whether there was discrimination against the dispatched workers;

• The company directly hired some of the dispatched workers as fixed-term employees after undergoing an evaluation process, considering attributes such as work experience;

• The annual salaries of the dispatched workers were determined by reference to the duration of their experience, age, job duties, etc.;

• The dispatched workers were entitled to a number of allowances, which were not paid to the fixed-term employees; and

• The pay scale and the wage structure of the dispatched workers were determined by the manpower supply company.

• In short, the SRLRC concluded that there were reasonable grounds for the company's decision not to pay fixed bonuses to the dispatched workers, as it arose from the difference in the wage regimes. 

The significance of the above SRLRC decision is that it makes concrete the criteria for evaluating the presence of wrongful discrimination.  It also follows on the heels of an earlier Korean Supreme Court case which held that, in connection with the analysis of whether discriminatory treatment lacked reasonable grounds or not, the details of the discriminatory treatment and the background for such discriminatory treatment should be considered in tandem with the type of employment arrangement, the workers’ roles and responsibilities, the wage regime, and the other working terms and conditions of the workers in question. 

There is a wide range of disputes concerning the discriminatory treatment of contract workers, fixed-term employees, dispatched workers, etc., and it is anticipated that such disputes will increase in the near future.  Although the above-described SRLRC case is a decision of a Regional Labor Relations Commission, it is worth mentioning that the case reflects the holding of an earlier decision of the Korean Supreme Court.  Accordingly, it would be prudent for businesses to check whether there may be any potential discriminatory practices in their workplace and to make appropriate preparations in response to potential disputes that may arise.