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Photo = Coupang |
[Alpha Biz= Paul Lee] Seoul, South Korea — [Date] — Coupang Fulfillment Services (CFS) is under renewed scrutiny as allegations mount over unpaid severance for day laborers, with critics raising concerns about a “lenient investigation” by prosecutors. The Ministry of Employment and Labor has announced a review of CFS’s revised employment rules, a move that could challenge the legal basis for prosecutors’ earlier decision not to indict.
Ministry of Labor to Re-examine Coupang’s Employment Rules
According to Rep. Kim Joo-young of the Democratic Party, the Ministry of Employment and Labor is currently reviewing whether CFS’s 2023 amendments to its employment rules—particularly provisions excluding severance eligibility and introducing a controversial “reset” clause—violate mandatory labor laws. The ministry said it would consider issuing corrective orders to prevent recurrence if legal violations are confirmed.
Controversy Over “Severance Reset” Clause
CFS amended its employment rules in May 2023 and again in April 2024. Under the new provisions, if a worker’s average weekly hours fall below 15 in any four-week period, the severance calculation period resets to “day one,” even if the employee has worked continuously for more than a year.
This change has led to a sharp increase in cases where day laborers are denied severance pay. Under Supreme Court precedent, workers employed for more than one year who average at least 15 hours per week over a four-week period are entitled to severance pay, regardless of their employment type.
Growing Financial and Legal Stakes
As of July 2024, CFS employed approximately 100,960 day laborers. If each were entitled to an estimated severance of KRW 2 million, the total liability could reach KRW 200 billion (approx. USD 150 million). Reports filed with the labor ministry have surged: from around 20 complaints annually before the rule change, to 90 in 2023, and 75 cases by August 2024 alone.
The controversy began in late 2023, when eight warehouse workers filed complaints and lawsuits against former CFS CEO Eom Sung-hwan, alleging widespread unpaid severance.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
