Top court sides with Ssangyong Motors on 2009 layoffs

The Supreme Court ordered an appeals court Thursday to reconsider its ruling that annulled the massive layoffs of Ssangyong Motor employees in 2009.

In the lawsuit filed by 153 dismissed workers of the automaker, the Supreme Court sent the case back to the Seoul High Court with an opinion that the layoffs were legitimate.

“There was an urgent management need to carry out the layoffs,” the court said in its ruling, citing that the global financial crisis of 2008 seriously hurt the automaker’s sales.

The court further acknowledged that the company management did take necessary steps to avoid the layoffs, such as freezing wages, recommending paid leaves and downsizing its subcontractors.

The plaintiffs, who have been fighting a legal battle for five years, will not be able to return to their workplace unless the appeals court overturns its previous decision.

Ssangyong cut 2,646 jobs, approximately 37 percent of the total workforce, in April 2009 after it was put under court receivership in the aftermath of the 2008 global financial crisis.

The layoff sparked a 77-day-long strike by 5,500 unionists at the company’s factory in Pyeongtaek, some 70 kilometers south of Seoul.

Some 1,700 employees chose to retire, while 164 were dismissed and 455 were forced to take unpaid leave.

In 2012, the company agreed with its union to reinstate the workers who had been on unpaid leave, saying its financial status has improved to the point where it can embrace the workers as its sales were recovering and its deficit was narrowing.

However, the retired and dismissed workers were not subject to the reinstatement plan.

Of the 164 dismissed, 153 former employees filed a lawsuit against their former employer, arguing that a sales loss is not a just reason to lay off employees.

A lower court earlier sided with the carmaker, saying that the company did make enough efforts to overcome management difficulties.

The Seoul High Court overturned the decision, however, declaring the management’s decision invalid, and ordered the reinstatement of the former employees.

The carmaker is now owned by Indian automotive group Mahindra & Mahindra, which acquired Ssangyong Motor from Chinese automobile manufacturer Shanghai Automotive Industry Corp. in 2010. (Yonhap)