(1) Who did Barun Law represent? We represented Company S, a local public corporation established under the Local Public Corporation Act and the Municipal Ordinance of the city of OO.

(2) Background of the case and details of the lawsuit: The plaintiffs are workers or retirees who are employed by the defendant to provide labor and are paid wages. The plaintiffs claimed that at least the minimum guaranteed portion of the allowance based on assessment ("assessment allowance") paid by the defendant to the plaintiffs (which is 100% of the monthly remuneration for 2019-2021 and 75% of the monthly remuneration for 2022) constitutes ordinary wages because it is paid on a regular, uniform and fixed basis, and filed a lawsuit to recover the unpaid amount of alleged statutory allowance calculated by including the assessment allowance in ordinary wages, as well as damages for payment delay.

On November 23, 2023, the 15th Civil Division of the Seoul Eastern District Court ruled, “The plaintiffs' assessment allowance is a wage for the previous year and is paid only in the current year. Therefore, it cannot be said that a minimum payment is guaranteed at the time of providing the work, and therefore, it is difficult to consider it as ordinary wages because it is not recognized as being fixed. Therefore, the plaintiffs' claims filed under a different premise have no merit and need not be examined further." The court then entered judgment dismissing all of the plaintiffs' claims.

Based on our experience in winning a number of cases related to ordinary wages, we actively argued and presented evidence on behalf of the defendant, Company S.

In particular, we proactively argued and proved the contradictions and legal flaws in the plaintiffs’ claims regarding the assessment allowance, such as (1) the regulations on which the assessment allowance was based (analyzing the Employment Rules, the Remuneration Regulations and their implementing regulations, and the budgeting standards for local public corporations), (2) the period for which the assessment allowance was payable (whether it was the current year's wages), and (3) whether the assessment allowance guaranteed the payment of a certain percentage of the monthly salary (remuneration).

The current wage system has a dichotomous structure that is largely divided into ordinary wages and average wages. In the case of ordinary wages, the concept, scope, and method of calculation are not clear, making it a key issue of conflict of interest in labor relations practice.

In this case, the court confirms that the assessment allowance of a local public corporation does not constitute ordinary wages. If it is confirmed as such, it will be an important benchmark for judging the legal nature of allowances paid on the basis of evaluation results in other local public corporations.

□ Attorneys in charge: Moon Ki-joo, Lee Jong-hwa