CONTENTS
- 1. Wage Claim Lawsuit, the Detailed Circumstances?
- - Wage Claim Lawsuit, the Relevant Statutes?
- 2. Wage Claim Lawsuit, the Court's Determination?
- 3. Wage Claim Lawsuit, Daeryun's Strategy?
1. Wage Claim Lawsuit, the Detailed Circumstances?
A, the plaintiff who filed the wage claim lawsuit, was an undocumented worker of Indonesian nationality.
A had worked as a production-line employee at B, a manufacturing company, for about three years and six months.
To avoid paying severance pay, B reportedly did not prepare employment contracts with its undocumented workers and instead paid their wages in cash each month.
After leaving the company, A did not receive severance pay and reported the matter to the labor office, but B's representative claimed that A was a person he did not know. However, once a record showing that one month's wages had been transferred to A's account was confirmed, B's representative claimed that A had been a part-time worker who worked for only about 20 days.
When the labor office closed its review of the suspected violation of the Employee Retirement Benefit Security Act by B as “no suspicion of crime due to insufficient evidence,” B's representative claimed that there was no obligation to pay severance pay to A.
Although A had lived in B's dormitory and had been on close enough terms with the company's representative to take photographs together, A found it absurd and unfair that the company denied A's very existence, and A filed the wage claim lawsuit.
A submitted as evidence a video of attending a B company dinner, photographs taken with B's representative, and videos recording the work performed.
Wage Claim Lawsuit, the Relevant Statutes?
Severance pay is paid when a worker who has continuously worked for one year or more retires, and the employer must pay the severance pay within 14 days from the date on which the ground for payment arises.
▣ Employee Retirement Benefit Security Act, Article 9 (Payment of Severance Pay, etc.)
(1) Where a worker retires, the employer shall pay the severance pay within 14 days from the date on which the ground for payment arises. Provided, that where there are special circumstances, the due date for payment may be extended by agreement between the parties.
The extinctive prescription for a claim for severance pay is three years. There is a method of interrupting the extinctive prescription by urging the employer to pay the severance pay, such as by sending a certified content-proof letter, before three years pass from the date of retirement.
In that case, it is important to proceed with litigation within six months.
A claim for severance pay is possible even where the worker has intentionally caused serious disruption to the business or inflicted financial harm. Even if a worker has caused losses to the company in connection with the work, the amount may not be deducted from the severance pay, and the matter must be resolved through a separate lawsuit for damages or similar means.
If a company refuses to pay severance pay on the ground of the worker's negligence, the worker may bring a legitimate claim for severance pay. An employer who refuses a claim for severance pay and fails to pay it may be subject to imprisonment for up to three years or a fine of up to 30 million won.
▣ Employee Retirement Benefit Security Act, Article 44 (Penalty Provisions)
A person who falls under any of the following subparagraphs shall be punished by imprisonment for up to three years or a fine of up to 30 million won.
1. A person who fails to pay severance pay in violation of Article 9(1)
2. A person who fails to pay benefits when a worker retires, or fails to pay contributions or delay interest
2. Wage Claim Lawsuit, the Court's Determination?
The district court that heard the wage claim lawsuit upheld the claim, stating that “it is recognized that A was employed by B and continuously worked there,” and ordered B to “pay severance pay of approximately 10.5 million won.”
This judgment appears to be a precedent that may serve as a warning against the practice of companies that keep no objective records, such as employment contracts, for undocumented foreign workers and then deny the fact of their employment.
3. Wage Claim Lawsuit, Daeryun's Strategy?
This was an analysis of a district court judgment holding that, in connection with a wage claim lawsuit, severance pay must be paid even to an undocumented worker if continuous employment is proven.
A worker who has not received severance pay even after the deadline for payment has passed may, in this manner, file a wage claim lawsuit under civil law. To obtain the desired outcome in litigation, gathering evidentiary materials is critical.
The fact of employment can be proven through evidence such as an employment contract, bank account records of wage payments, pay statements, and commuting records, and if 🔗no employment contract was prepared or only one copy was prepared and the company kept it, this constitutes a violation of the Labor Standards Act, so you may consider devising a response together with a labor attorney.
Daeryun Law Firm LLP operates a 🔗Labor and Industrial Accident Group and has many case studies relating to severance pay, including a 🔗case in which the full amount of unpaid severance pay was recovered, and it forms strategies to resolve cases together with its labor consultants. If you need assistance with a wage claim lawsuit, you are welcome to request a legal consultation.
