* Hyundai Motor shares close up 0.2 pct after rising 3.5 pct
* Court says fixed bonuses should be calculated as ordinary
(Add comments from chief justice, reaction from business,
SEOUL Dec 18 South Korean businesses may face
an increase in labour costs after the country's Supreme Court
ruled on Wednesday that fixed bonuses should be included in the
calculation of regular wages.
The decision could affect a series of other lawsuits filed
by workers at major manufacturers like Hyundai Motor
and General Motors, which demand changes to their wage
"We acknowledge that the ruling will have a significant
impact on South Korea's labour relations and business
activities," said Chief Justice Yang Sung-tae, expressing hopes
that the decision would help resolve other legal disputes
regarding so-called "ordinary wages".
He said ordinary wages referred to a fixed sum paid
periodically and uniformly, and therefore regular bonuses should
be recognised as part of ordinary wages.
The ruling threatens to increase various statutory benefits,
such as overtime allowance and severance pay, which are adjusted
in proportion to ordinary wages, and will cost Korean businesses
13.8 trillion Korean won in the first year, and 8.9 trillion won
annually after that, according to a business lobby group.
The Korea Employers Federation raised concerns that the
latest decision would cause confusion in future annual wage
talks between businesses and labour unions.
The court ruled, however, that other bonuses such as a
summer vacation allowance do not qualify as regular wages, which
helped send Hyundai Motor shares briefly higher before the
closed nearly flat.
Some workers at automakers and shipbuilders, which rely
heavily on overtime work, have already lodged separate lawsuits
related to ordinary wages, demanding changes in their wage
plans. About 150 cases have been filed regarding ordinary wages
as of the end of September, according to estimates by labour
"It certainly is a negative news as it means unexpected
expenses for Hyundai and Kia, hurting future profits," said Song
Sun-jae, an analyst at Hana Daetoo Securities.
GM chief executive Dan Akerson told South Korean President
Park Geun-hye in August that the ongoing wage case was a major
barrier to maintaining operations in South Korea, according to
GM expects its South Korean production to fall by as much as
20 percent by 2015 after which it plans to stop selling
Chevrolet cars in Europe, one of the key destinations for South
($1 = 1051.6000 Korean won)
(Reporting by Hyunjoo Jin and Joyce Lee; Additional reporting
by Jungmin Jang; Editing by Matt Driskill and Jeremy Laurence)