I. Rulings (Two Cases Related to Ordinary Wage)
1. First case (Supreme Court ruling on December 19, 2013, 2012da89399)
(1) Background: The defendant company (hereinafter, referred to as “the company”) has paid bonuses on every even month, in accordance with the company’s Bonus Payment Regulation, with the full amount paid to employees with more than two months of service. However, a different amount calculated by application of a pre-determined rate, according to the corresponding period of the bonus payment, is paid to new employees with less than two months of service, those who have just returned after taking at least two months of leave, and those who are on leave. As for those who resigned during the corresponding period of bonus payment, the company pays the pro-rated amount according to the number of days worked. When determining the amount of wages to be included in ordinary wages in the collective agreement concluded on October 8, 2008, the company and the labor union excluded the bonuses in the calculation of ordinary wage, assuming that the bonuses in this case were not included in ordinary wage in the Labor Standards Act.

(2) Controversial points related to this case:
1) Whether or not the bonuses in this case are included in “ordinary wage”; 2) Although the company and the union agreed to exclude the bonuses in the calculation of ordinary wages, if an employee applied for additional wage, claiming that the agreement was invalid, whether or not this claim violated the good-faith principle.
(3) Court ruling:
1) Even though the company paid the bonus for a period exceeding one month (every two months during each period of wage payment), this amount has satisfied the requirement of periodic payment, as this was paid periodically. Also, since whether or not the payment was made, and the amount of the payment had already been determined uniformly for all employees, the bonus qualifies as uniform and fixed. As the bonus payment varies according to the particular service period (as of two months), it could be misunderstood that there is no uniformity or it could incorrectly be regarded as money not previously determined. However, in considering it in the situation of overtime work (when the ordinary wage needs to be calculated), whether the employees concerned had served two months or not was already determined. As those who resigned received their bonus in proportion to the number of days they worked, the bonus is recognized as uniform and fixed. As explained above, those on leave were treated differently, due to their extraordinary situation, and so it is not an obstacle to admit that payment as ordinary wage. Accordingly, the regular bonus in this case shall be included in ordinary wage.
2) A labor contract which establishes working conditions that do not meet the standards provided for in the Labor Standards Act shall be null (Article 15 of the Labor Standards Act). Accordingly, even though the employer and the union agreed to exclude the regular bonus as legally included in ordinary wage, this mutual agreement is invalidated as being in violation of the Labor Standards Act. As the above agreement was invalid, it is a principle that the employer should recalculate the overtime work allowance, adding the wages included in legal ordinary wage, and that the employee can apply for retroactive payment of the variance from the amount already paid. However, the additional wage claim based upon the regular bonus can be restricted due to the good-faith principle. In those workplaces where there were no agreements on the exclusion of ordinary wages, additional wages for different amounts recalculated by including the regular bonus in the ordinary wage can be claimed. Provided, that this retroactive claim can be valid only for the amount payable for the past three years.
2. Second case (Supreme Court ruling on December 19, 2013, 2012da94643)
(1) Background and controversial points: 1) Whether the amount of Kimchi bonus should be determined based on whether it belongs to the ordinary wage or not; 2) Whether Lunar New Year and Chuseok (Korean Thanksgiving) bonuses, summer leave bonuses, gift allowances, birthday allowances, individual pension premium subsidies, group insurance, etc., which were paid to incumbent employees as of a particular time period, are included in ordinary wage or not.
(2) Court ruling: Even though there is a possibility that the above bonuses etc., which were paid only to those in active service as of a particular time period, may be seen as ordinary wage, the subordinate judicial ruling that considers them as ordinary wages is overturned as being incorrect.

II. Judgment Criteria for Ordinary Wages
1. The concept of “ordinary wage”
“Ordinary wage” is the wage determined to be paid uniformly when contractual labor service is provided. All allowances which legally qualify as ordinary wage shall be included in ordinary wage regardless of the title of the allowance. It is recognized as the basic wage when calculating additional wages for extended work, night-time and holiday work, allowance replacing advance notice of dismissal, and the unused annual leave allowance. Additional wages under the Labor Standards Act shall be 150%, calculated by adding 50% of ordinary wage.
2. Criteria for inclusion in “ordinary wage”
(1) Conceptual signs and requirements of ordinary wage: Since ordinary wage becomes the basic wage used to calculate additional wages, it should be considered a financial reward reflecting the value of labor service provided ordinarily for contractual working hours in accordance with the employment contract (remuneration for labor). Accordingly, the additional wages paid for special work provided, and not for assigned work as per the employment contract, shall not be considered ordinary wage. In addition, this ordinary wage must have been determined before providing actual overtime work. The reason for this is that the previously determined ordinary wage calculation shall be used immediately when the overtime work is actually provided. Requirements of the ordinary wage shall be comprised of all three components: ➀ periodicity; ➁ uniformity, and ➂ fixedness.
(2) Requirement of periodicity: It should be a wage which is paid periodically for a previously-determined period. Even if it is paid for a period exceeding one month, if it is paid periodically for a regular period, it is included in ordinary wage.
[Regular bonuses] Employees are paid their regular wage once a month in return for work, but their regular bonus is paid either every two months, once per quarter, or once a year, varying with the company. These bonuses are regarded as having a character of periodicity if they are paid periodically, despite being paid every two months, every quarter, every half year or each year. Accordingly, the regular bonus normally paid for a period exceeding one month can be included into the ordinary wage.

(3) Requirement of uniformity: It is “ordinary wage” only when it is paid to “all employees” or “all employees meeting the identical conditions or criteria.” Even though the bonus is not paid to all employees, but only to those employees who meet the identical conditions or criteria, it is considered to have a characteristic of uniformity. Accordingly, “identical condition” here means that it is not changeable from time to time, but must be fixed. Even though there may be some restrictions concerning payment of a particular wage to an employee on leave, returning from leave, or under disciplinary measures, these restrictions are designed to consider the individual special circumstances, but cannot deny the uniformity of wages to normal empl