This is a case commentary on a matter in which South Korean courts confirmed that denying internal performance bonuses and seniority allowances to fixed-term commissioned workers performing the same core duties as indefinite-term employees — solely on the basis of job classification — constitutes unlawful discriminatory treatment under Article 8(1) of the Act on the Protection of Fixed-Term and Part-Time Workers.
Case Background
Worker X and colleagues served as fixed-term commissioned workers at institution Y, performing security-related information-gathering duties in the same department as indefinite-term employees. The indefinite-term employees received an internal performance bonus amounting to 210–270% of their monthly base salary each year, while the fixed-term workers received nothing — for one stated reason: a different job classification. The dispute proceeded through regional and central labor commissions and two rounds of administrative litigation before courts confirmed the differential treatment was unlawful under the Fixed-Term Workers Act (Seoul Administrative Court Case No. 2020Guhap67650; Seoul High Court Cases No. 2021Nu52688 and No. 2021Nu58570).
Fixed-Term Worker Status
Institution Y argued that the commissioned workers were effectively indefinite-term employees because their contracts were routinely renewed up to the maximum work age. Courts rejected this. The employment contracts expressly provided for automatic termination upon expiration unless renewed, and performance evaluations could affect renewal decisions. Given this structure, the stated contract term could not be treated as a mere formality, and the workers were held to be fixed-term workers entitled to protection under the Act.
Identifying the Comparator Worker
South Korean courts assess comparator selection based on work actually performed, not job titles or contract descriptions. In this case, both groups allocated approximately 80% of their working time to security information-gathering. Despite differences in the precise targets or methods of collection, the core purpose and content of the duties were not fundamentally different. The indefinite-term employees were therefore accepted as valid comparators under the standard articulated in Supreme Court Decision 2011Du5391 (November 27, 2014).
Wage Comparison: Item-by-Item as the Default Rule
Institution Y argued that total compensation should govern the comparison, pointing to the absence of a wage peak system for fixed-term workers and differing salary growth rates. Courts disagreed: because the two groups’ wage structures were essentially the same and the only meaningful difference was the presence or absence of the internal performance bonus, item-by-item comparison was fully viable. Total compensation comparison remains an exceptional and supplementary tool, not the default, as confirmed in Supreme Court Decision 2016Du47857 (September 26, 2019).
Employer Justifications — All Rejected
Courts rejected all four justifications offered by institution Y. The claim that the bonus compensated indefinite-term employees for wage peak reductions failed because the bonus predated the wage peak system and was paid to all indefinite-term employees regardless of whether they were subject to it. The collective bargaining argument failed because the relevant agreement addressed only a general principle on wage growth and did not constitute a specific quid pro quo arrangement for the seniority allowance. The retirement age differential and elderly employment classification arguments failed because neither has a logical connection to an internal performance bonus calculated by departmental evaluation scores rather than individual tenure or retirement age.
Limits of the Elderly Employment Re-Hire Provision
Some workers had originally been indefinite-term employees before retiring and returning as commissioned workers. Institution Y invoked Article 21(2) of the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion, which permits employers to set different wage terms upon rehiring retired workers by agreement. The Seoul High Court held that this provision requires a specific and explicit mutual agreement on wage conditions — not merely the worker’s awareness of prior pay levels — before an employer may reduce compensation. Absent such an agreement, excluding a rehired worker from bonus payments cannot be justified under this provision (Seoul High Court Decision 2021Nu52688).
Legal Expertise
Atlas Legal advises corporate clients on employment law compliance and workforce structuring in South Korea, including fixed-term worker discrimination claims, wage item classification analysis, and comparator selection strategy. The firm’s practice spans corporate advisory, corporate disputes, and corporate criminal defense, with operations based in Incheon Songdo within the international business district.
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Job Classification Cannot Justify Bonus Denial to Fixed-Term Workers
This is a case commentary on a matter in which South Korean courts confirmed that denying internal performance bonuses and seniority allowances to fixed-term commissioned workers performing the same core duties as indefinite-term employees — solely on the basis of job classification — constitutes unlawful discriminatory treatment under Article 8(1) of the Act on the Protection of Fixed-Term and Part-Time Workers.
Case Background
Worker X and colleagues served as fixed-term commissioned workers at institution Y, performing security-related information-gathering duties in the same department as indefinite-term employees. The indefinite-term employees received an internal performance bonus amounting to 210–270% of their monthly base salary each year, while the fixed-term workers received nothing — for one stated reason: a different job classification. The dispute proceeded through regional and central labor commissions and two rounds of administrative litigation before courts confirmed the differential treatment was unlawful under the Fixed-Term Workers Act (Seoul Administrative Court Case No. 2020Guhap67650; Seoul High Court Cases No. 2021Nu52688 and No. 2021Nu58570).
Fixed-Term Worker Status
Institution Y argued that the commissioned workers were effectively indefinite-term employees because their contracts were routinely renewed up to the maximum work age. Courts rejected this. The employment contracts expressly provided for automatic termination upon expiration unless renewed, and performance evaluations could affect renewal decisions. Given this structure, the stated contract term could not be treated as a mere formality, and the workers were held to be fixed-term workers entitled to protection under the Act.
Identifying the Comparator Worker
South Korean courts assess comparator selection based on work actually performed, not job titles or contract descriptions. In this case, both groups allocated approximately 80% of their working time to security information-gathering. Despite differences in the precise targets or methods of collection, the core purpose and content of the duties were not fundamentally different. The indefinite-term employees were therefore accepted as valid comparators under the standard articulated in Supreme Court Decision 2011Du5391 (November 27, 2014).
Wage Comparison: Item-by-Item as the Default Rule
Institution Y argued that total compensation should govern the comparison, pointing to the absence of a wage peak system for fixed-term workers and differing salary growth rates. Courts disagreed: because the two groups’ wage structures were essentially the same and the only meaningful difference was the presence or absence of the internal performance bonus, item-by-item comparison was fully viable. Total compensation comparison remains an exceptional and supplementary tool, not the default, as confirmed in Supreme Court Decision 2016Du47857 (September 26, 2019).
Employer Justifications — All Rejected
Courts rejected all four justifications offered by institution Y. The claim that the bonus compensated indefinite-term employees for wage peak reductions failed because the bonus predated the wage peak system and was paid to all indefinite-term employees regardless of whether they were subject to it. The collective bargaining argument failed because the relevant agreement addressed only a general principle on wage growth and did not constitute a specific quid pro quo arrangement for the seniority allowance. The retirement age differential and elderly employment classification arguments failed because neither has a logical connection to an internal performance bonus calculated by departmental evaluation scores rather than individual tenure or retirement age.
Limits of the Elderly Employment Re-Hire Provision
Some workers had originally been indefinite-term employees before retiring and returning as commissioned workers. Institution Y invoked Article 21(2) of the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion, which permits employers to set different wage terms upon rehiring retired workers by agreement. The Seoul High Court held that this provision requires a specific and explicit mutual agreement on wage conditions — not merely the worker’s awareness of prior pay levels — before an employer may reduce compensation. Absent such an agreement, excluding a rehired worker from bonus payments cannot be justified under this provision (Seoul High Court Decision 2021Nu52688).
Legal Expertise
Atlas Legal advises corporate clients on employment law compliance and workforce structuring in South Korea, including fixed-term worker discrimination claims, wage item classification analysis, and comparator selection strategy. The firm’s practice spans corporate advisory, corporate disputes, and corporate criminal defense, with operations based in Incheon Songdo within the international business district.
Click here for detailed information