The Seoul Metro union holds a rally in front of the Government Complex Seoul calling for the abolishment of the peak wage system in this 2019 file photo. Yonhap

By Park Jae-hyuk

Business lobby groups expressed concerns, Thursday, about potential side effects from the Supreme Court's ruling against the peak wage system, which has been implemented by many domestic companies to gradually reduce the salaries of older workers before retirement.

The lobby groups claimed that nullifying the system will weigh further on employers, causing job instability.

Earlier that day, Korea's Supreme Court ruled in favor of a former research institute worker, who had filed a lawsuit to demand reimbursement for wages lost before his retirement.

The top court judged the peak wage system to be illegal, saying that workers and people who want to work should not be discriminated against on the basis of age without a reasonable cause.

The Act on Prohibition of Age Discrimination in Employment and Aged Employment Promotion prohibits discrimination against workers on the basis of age.