[Plaintiffs, Appellants] Plaintiff 1 and 4 others (Attorneys Choi Sang-mu and 8 others, Counsel for the Plaintiffs)
[Defendant, Appellee] Hyundai Mipo Dockyard Co., Ltd. (Attorneys Lee Jae-hong and 6 others, Counsel for the Defendant)
[Judgment Below] Busan High Court Decision 2015Na1956 decided January 13, 2016
[Order]
The part of the judgment of the court below against the Plaintiffs, excluding the portions concerning claims for incentive pay (격려금), performance pay (성과금), bonus overtime pay (상여O/T), summer vacation expenses (하기휴가비), and monthly leave allowance (월차휴가수당), is reversed, and this part of the case is remanded to the Busan High Court. The remainder of the Plaintiffs' appeal is dismissed.
[Reasoning]
The grounds for appeal (including the supplementary briefs on grounds for appeal submitted after the expiration of the period for submitting the appellate brief, to the extent they supplement the original grounds) are examined as follows.
1. The part of the judgment against the Plaintiffs, excluding the claims for incentive pay, performance pay, bonus overtime pay, summer vacation expenses, and monthly leave allowance
가. Article 2(1) of the Civil Act (민법) provides, with respect to the principle of good faith (hereinafter "the principle of good faith"), that "the exercise of rights and the performance of obligations shall be done in good faith." The principle of good faith is an abstract norm requiring that a party to a legal relationship, giving consideration to the other party's interests, must not exercise rights or perform obligations in a manner or with content that is inequitable or contrary to good faith, and it functions as a general principle permeating the entire legal order. In order to deny the exercise of a right on the ground that it violates the principle of good faith, the other party must have been given trust, or must objectively be in a position where such trust is justified, and the exercise of the right in violation of such trust of the other party must reach a degree that cannot be tolerated in light of the concept of justice (see Supreme Court Decision 2003Da2390, 2406 decided April 22, 2003; Supreme Court Decision 2017Da52712 decided June 10, 2021).
Where the content of a labor-management agreement, such as a collective agreement, is null and void for violating a mandatory provision of the Labor Standards Act (근로기준법), if an assertion of such nullity were rejected on the ground that it constitutes an exercise of rights in violation of the principle of good faith, this would result in defeating the legislative purpose of the mandatory provision; therefore, in principle, such an assertion cannot be deemed to violate the principle of good faith. However, it is not the case that the application of the principle of good faith is excluded without exception with respect to an assertion of nullity of a labor-management agreement on the ground that its content violates a mandatory provision of the Labor Standards Act. Only in exceptional cases where, in addition to meeting the general requirements for application of the principle of good faith as set out above, there exist special circumstances warranting the priority application of the principle of good faith notwithstanding the mandatory nature of the Labor Standards Act, can an assertion of nullity of the labor-management agreement be found to violate the principle of good faith and thus be impermissible.
Where, in a labor-management agreement, the parties agreed to exclude regular bonuses from the calculation basis for ordinary wages on the premise that regular bonuses do not themselves constitute ordinary wages, and set the wage level on that basis, if the employees add the regular bonuses to ordinary wages and, on that basis, claim additional statutory allowances, thereby imposing on the employer an unforeseen new financial burden that causes serious managerial difficulties or threatens the survival of the enterprise, such conduct may be found to be significantly contrary to good faith in light of the concept of justice and equity (see Supreme Court en banc Decision 2012Da89399 decided December 18, 2013).
However, in determining whether to apply the principle of good faith in preference to the mandatory provisions governing labor relations, it is necessary to fully consider the legislative purpose of the Labor Standards Act, etc., which is to guarantee and improve the basic livelihood of workers by establishing minimum standards for working conditions. The entity that manages an enterprise is the employer, and the management situation of an enterprise may change from time to time depending on various economic and social circumstances inside and outside the enterprise. If an employee's claim for additional statutory allowances resulting from the recalculation of ordinary wages were rejected on the ground that it causes serious managerial difficulties or threatens the survival of the enterprise, this could effectively result in shifting the risks of enterprise management onto the employee. Therefore, whether an employee's claim for additional statutory allowances violates the principle of good faith by causing serious managerial difficulties for the employer or threatening the survival of the enterprise must be determined carefully and strictly (see Supreme Court Decision 2015Da217287 decided February 14, 2019).
Whether an employee's claim for additional statutory allowances resulting from the recalculation of ordinary wages causes serious managerial difficulties for the enterprise or threatens its survival must be determined by comprehensively considering various circumstances surrounding the operation of the enterprise, such as the scale of the additional statutory allowances, the rate of increase in real wages resulting from the payment of the additional statutory allowances, the rate of increase in ordinary wages, the enterprise's net income for the period and its trend, the scale of funds that can be mobilized, the total amount of labor costs, sales revenue, the continuity and profitability of the enterprise, and the overall trends of the industry to which the enterprise belongs. Even if an enterprise is temporarily in managerial difficulty, if the employer could have sufficiently foreseen such deterioration of the management situation through a reasonable and objective management forecast, and there is a possibility of overcoming the managerial difficulties in the future, the employee's claim for additional statutory allowances should not be readily rejected on the ground of the principle of good faith.
나. Examining the following circumstances, which can be found in the reasoning of the judgment below and the record, in light of the legal principles set out above, it cannot be said that the Plaintiffs' claims for the shortfall in unpaid statutory allowances and retirement pay, recalculated on the premise that the bonus at issue in this case constitutes ordinary wages, violate the principle of good faith.
The Defendant's management indicators, such as sales revenue, operating profit, and net income, were generally favorable until around 2012. Although the Defendant's gross profit margin, operating profit margin, and net profit margin showed a declining trend after 2007 due to factors such as the continuous decline in ship prices, the Defendant's main manufacturing field, it is difficult to view the Defendant's management condition as having been at a poor level.
The Defendant's management condition, including sales and profit and loss, deteriorated around 2013 and 2014. The causes thereof may be found in factors such as the decrease in exports due to the economic recession in Europe, the Defendant's major export destination, starting around 2012, the decline in export market share due to the rapid growth of Chinese companies, and intensified competition within the same industry.
However, it is difficult to view such deterioration of the management condition as a circumstance that the Defendant could not have foreseen. The risks and disadvantages arising from fluctuations in the domestic and foreign economic situation fall within the range that an enterprise, such as the Defendant, which has long conducted large-scale business, could foresee or should bear, and in light of the Defendant's business scale, etc., this may be viewed as a temporary difficulty that could be overcome.
In fact, in its management status explanatory materials, the Defendant predicted that the shipbuilding industry would gradually recover from 2014, and the Defendant's operating profit and net income for 2015 increased substantially, which is consistent with such prediction.
Although it appears that the rate of increase in ordinary wages and the wage increase rate of the Defendant's employees would be considerable as a result of the recalculation of ordinary wages, comprehensively considering various circumstances surrounding the operation of the enterprise—such as the scale of additional statutory allowances expected to be borne by the Defendant as of the closing of arguments in the fact-finding proceedings (on the premise that the portion for which the extinctive prescription period has run is excluded and that no overlapping premium for holiday work is applied), the ratio of the additional statutory allowances to the total annual labor costs and net income by year, the Defendant's business scale, and the trend or cumulative state of profit and loss, such as sales, operating profit, and net income over the years—it is difficult to find that the payment of the additional statutory allowances and the additional retirement pay reflecting them would cause a serious managerial crisis for the Defendant or threaten the very survival of the enterprise.
The Defendant's management condition sharply deteriorated after the Plaintiffs filed the instant lawsuit, but showed some recovery by the time of the closing of arguments in the fact-finding proceedings. The court below should have determined whether to grant the claims for additional statutory allowances, etc., by considering not only the Defendant's temporary managerial deterioration but also the continuity and profitability of the enterprise, and the possibility of foreseeing or overcoming the managerial difficulties.
다. Nevertheless, the court below determined that the Plaintiffs' claims for the shortfall in unpaid statutory allowances and retirement pay were impermissible as violating the principle of good faith, citing circumstances such as the fact that the Defendant's additional burden would amount to approximately KRW 86.8 billion over four years and six months. The judgment of the court below contains an error that affected the conclusion of the judgment, by misapprehending the legal principles concerning the principle of good faith, among other errors.
2. As to the claims for incentive pay, performance pay, bonus overtime pay, summer vacation expenses, and monthly leave allowance
The Plaintiffs did not state grounds for appeal with respect to the above portions in either the petition of appeal or the appellate brief.
3. Conclusion
The part of the judgment below against the Plaintiffs, excluding the portions concerning the claims for incentive pay, performance pay, bonus overtime pay, summer vacation expenses, and monthly leave allowance, is reversed, and this part of the case is remanded to the court below for further hearing and determination; the remainder of the Plaintiffs' appeal is without merit and is dismissed in its entirety. This Judgment is rendered by the unanimous opinion of the Justices as set forth in the Order.
Justice Noh Jeong-hui (Presiding Justice), Kim Jae-hyung (Justice in Charge), Ahn Cheol-sang, Lee Heung-gu