Appeals court nullifies Ssangyong Motor layoff

An appellate court on Friday ordered Ssangyong Motor to reinstate 153 fired workers, overturning a lower court ruling which backed the carmaker’s mass layoff in 2009.

The Seoul High Court said that the company’s decision should be invalidated citing its failure to make every effort to avoid the dismissal. The court also said it was based on an incorrect audit report.

The nation’s smallest carmaker was also ordered to pay 1 million won in compensation to each of the former employees.

The firm conducted a massive layoff in 2009 when it was under court receivership. But the employees have claimed the company exaggerated its sales slump to justify the job cuts.

“While Ssangyong Motor did go through difficulties due to a liquidity squeeze, it is unclear if it was serious enough to jeopardize the company’s financial soundness,” the court said.

Ssangyong Motor said it will appeal the case at the nation’s top court.

If the Supreme Court upholds the ruling, the plaintiffs will be able to return to their workplace after a legal battle that lasted more than three years.

Opposition parties welcomed the high court ruling.

“The ruling shows that justice still prevails,” said Han Jeoung-ae said of the main opposition Democratic Party. “I hope this will become an opportunity for expanding the rights of the disadvantaged of our society.”

The United Liberal Party and the Justice Party also welcomed the court’s decision and urged Ssangyong to humbly accept it.

Friday’s ruling was the latest in a years-long confrontation between the management and the workers that was sparked by large-scale restructuring in April 2009. Ssangyong laid off some 2,600 workers after it was put under court receivership in the aftermath of the financial crisis that shook the globe a year earlier.

The decision touched off a 77-day strike by unionized workers at the company. Out of the 2,600 that lost their jobs, some 1,700 voluntarily left while 455 were placed on unpaid leave. The remaining 165 were fired.

Out of the 165 that had been sacked, 153 sued the company in November 2010 for exaggerating its financial difficulties in order to cut more than one-third of the total workforce.

In January of 2013, Ssangyong Motor’s management and union leaders agreed to reinstate 455 that were forced to take unpaid leave. The company, however, said that the agreement did not apply to those who voluntarily resigned or were fired during the restructuring process.

The union claimed 24 workers and families have lost their lives from suicide or stress-related diseases to date.

By Yoon Min-sik (minsikyoon@heraldcorp.com)