The Lee Jae-myung government is reportedly preparing a plan to improve the total personnel cost system for public institutions, as of the 14th. This comes as the Supreme Court ruled that bonuses must be included in the standard wage, leading to an increased demand for improvements to the total personnel cost system.
The Presidential Committee on Policy Planning is said to be examining related matters through a public sector task force.
The total personnel cost system is a system in which the government sets the annual total amount that can be spent on wages and welfare expenses for public institutions, and expenditures are made within this limit. Labor unions in the financial sector are demanding improvements to this system, arguing that it does not align with the intent of the Supreme Court's standard wage ruling.
Last year, the Supreme Court ruled to exclude the fixed condition from the standard wage criteria. The ruling states that if there is merely 'regularity,' it should be recognized as standard wage. The standard wage is the salary that serves as the basis for calculating overtime and holiday allowances. Previously, workers had to receive wages 'regularly' and 'fixedly' to be classified as standard wage.
By excluding the fixed condition, bonuses or performance pay that were tied to conditions of employment and number of working days can now also be recognized as standard wages. If the standard wage increases, various allowances and severance pay based on this will also increase.
The issue lies with financial public institutions that are subject to the total personnel cost system. The Industrial Bank of Korea's labor-management has also engaged in a standard wage lawsuit, and the workers' side won the final ruling in January. As a result, the Industrial Bank of Korea has paid 20.9 billion won to employees, which includes overdue overtime pay, unused annual leave compensation, and severance pay, since December of last year.
Until now, the Industrial Bank of Korea has been unable to provide additional payments such as overtime pay due to being subject to the total personnel cost system. The annual total amount of personnel costs was fixed, so even if employees worked additional hours, they could not receive extra pay. The same applies to other financial public institutions such as the Korea Development Bank and the Export-Import Bank of Korea.
Recently, the financial labor union reportedly communicated its opinion on the need to improve the total personnel cost system to government and ruling party lawmakers, following the Supreme Court ruling.
A source from a financial public institution stated, 'Opinions have been conveyed regarding strengthening the independence of the public institution operation committee and establishing a compensation committee, and I understand that the government is positively reviewing these matters.'