"Busan High Court Dismisses Hyundai's Compensation Claims Against Irregular Workers", 10 February 2025.

In a landmark decision on Feb. 10, the Busan High Court ruled that irregular workers at Hyundai Motor Co. are not obligated to compensate for halting factory production lines during protests. This ruling, stemming from a retrial regarding a lawsuit filed by Hyundai Motor against its Irregular Workers' Union, has sent ripples of confusion and concern through South Korea's corporate sector.

The case dates back to August 2012, when the Hyundai Motor Irregular Workers' Union staged an illegal strike at the Ulsan plant, demanding direct employment for in-house subcontracted irregular workers. This action led to a significant disruption in production, with Hyundai Motor reporting a shortfall of 16,150 units compared to its annual target. The company argued that this disruption resulted in decreased sales and increased fixed costs, prompting them to seek compensation from the union.

Initially, lower courts had partially ruled in favor of Hyundai Motor, but the Supreme Court overturned these decisions in June 2023, ordering a reassessment of the damages. In the retrial, the Busan High Court's Civil Division 6... dismissed Hyundai Motor's claims, concluding that the production shortfall was compensated through additional production after the strike. The court also assessed Hyundai's production method as "make-to-order," suggesting that temporary delays did not significantly impact sales due to the low likelihood of contract cancellations.

This decision has sparked criticism from the business community, which views the ruling as conflicting with existing legal principles that mandate recovery for damages caused by illegal strike actions...

The ruling is part of a broader trend in recent judicial decisions that have favored unions, raising alarms within the industry...

The Busan High Court's decision to exempt workers from liability for illegal strike actions marks a significant moment in South Korea's labor relations landscape. As companies express their frustration, stating, "Even if the union illegally halts the production line, no compensation required," the ruling underscores the ongoing tension between protecting workers' rights and ensuring business continuity in a challenging economic environment.