Hyundai has been ordered by a South Korean court to include regular bonuses as part of base wages for some employees, a decision that will increase the automaker's annual labor cost in 2015.
The ruling, made by Seoul Central District Court, will affect 8.7 percent of Hyundai's employees in South Korea, according to Bloomberg. The automaker must now count regular bi-monthly bonuses as part of workers' base salary.
Hyundai will also pay three years of retroactive pay in order to avoid jeopardizing the company's financial "stability" according to the ruling.
The decision will also affect Hyundai's affiliates like Hyundai Mobis and Kia Motors, which face similar lawsuits.
"Hyundai may have dodged the worst-case scenario but affiliates like Kia may not be so lucky," said Lee Sang Hyun, an analyst at IBK Investment & Securities Co, in a company statement. "There are concerns that this partial ruling could trigger labor issues as workers resist the results that only benefit some of the employees."
Hyundai Motor union spokesman Hwang Ki Tae confirmed that nearly 5,700 Hyundai workers in South Korea will be able to include their regular bi-monthly bonuses in base pay, according to Bloomberg.
Other workers were denied that right because of a term in their contracts that regular bonuses will not be paid to workers who work fewer than 15 days of the month.
The automaker would have had to pay an 500 billion won ($460 million) more in 2015 in wages if the court applied the ruling to all of its workers.
The labor union is considering appealing the decision and negotiating with Hyundai on what should be considered as base pay. The company wants a decision by the end of March, according to Bloomberg.
Company shares dropped 2 percent to 171,000 won at the close in Seol trading after the announcement was made.
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