[Plaintiffs, Appellants] Plaintiff 1 and 4 others (Counsel Shin Young-hoon)
[Defendant, Appellee] Kumho Tire Co., Ltd. (Counsel Ju Wan and 2 others)
[Judgment Below] Gwangju High Court Judgment 2017Na10826, decided August 18, 2017
[Order]
The judgment below is reversed, and the case is remanded to the Gwangju High Court.
[Reasoning] The grounds of appeal (to the extent that the content of the supplementary brief on grounds of appeal submitted after the expiration of the period for submitting the grounds of appeal supplements the grounds of appeal) are examined.
1. As to the Second Ground of Appeal
A. In this case, in which the Plaintiffs sought payment of additional statutory allowances on the basis that regular bonuses should be added to ordinary wages, the court below invoked the legal principles set forth in the Supreme Court en banc Decision 2012Da89399, decided December 18, 2013, regarding cases where a claim for additional statutory allowances is rejected as inadmissible on the ground that it violates the good faith principle. Taking into account the circumstances stated in its reasoning as a whole, the court below determined that the Plaintiffs' claim for additional wages resulting from the inclusion of the bonus at issue in ordinary wages sought unexpected benefits far exceeding the wage level agreed upon between labor and management, and that this would impose upon the Defendant an unforeseen new financial burden causing serious managerial difficulty or endangering the survival of the enterprise, and thus, in light of the concepts of justice and equity, was clearly contrary to the good faith principle and could not possibly be tolerated.
B. However, this part of the judgment below is difficult to accept as it stands.
1) As the court below determined, where labor and management, on the premise that regular bonuses do not themselves constitute ordinary wages, agreed to exclude regular bonuses from the basis for calculating ordinary wages, and set the wage level on that premise, it may be clearly contrary to good faith, in light of the concepts of justice and equity, for the employee side to seek payment of additional statutory allowances by adding the regular bonus to ordinary wages, thereby imposing a new financial burden on the employer that causes serious managerial difficulty or endangers the survival of the enterprise (see Supreme Court en banc Decision 2012Da89399, decided December 18, 2013).
A. Article 56, and Article 50, Paragraphs 1 and 2 of the former Labor Standards Act (Act No. 15513, before the amendment of March 20, 2018; hereinafter the same) provide that for overtime work exceeding 40 hours per week and 8 hours per day, overtime allowance calculated by adding at least 50/100 of the ordinary wage must be paid, and Article 15 of the former Labor Standards Act provides that a labor contract setting working conditions below the standards set forth in the former Labor Standards Act shall be void only with respect to that part, and the part rendered void shall be governed by the standards set forth in the former Labor Standards Act. Accordingly, the provisions of the former Labor Standards Act requiring at least 50% of the ordinary wage to be added for overtime, night, and holiday work set the minimum standard for calculating wages for each type of such work; therefore, where labor and management have agreed on a method for calculating additional wages for overtime, night, and holiday work, if the amount calculated pursuant to such labor-management agreement falls short of the above standard set forth in the former Labor Standards Act, the labor-management agreement is void to the extent of such shortfall, and the void portion must be governed by the standards set forth in the former Labor Standards Act (see Supreme Court en banc Decision 2012Da89399, decided December 18, 2013).
However, in determining whether the good faith principle should be applied in preference to mandatory provisions governing labor relations, it is necessary to fully consider the legislative purpose of the Labor Standards Act (근로기준법) and other statutes, which is to guarantee and improve the basic livelihood of workers by setting minimum standards for working conditions. Furthermore, since the entity managing an enterprise is the employer, and the business circumstances of an enterprise may change from time to time depending on various economic and social conditions inside and outside the enterprise, if a worker's claim for additional statutory allowances arising from the recalculation of ordinary wages is rejected on the ground that it causes serious managerial difficulty or endangers the survival of the enterprise, this could result in effectively shifting the risks of business management onto the workers. Therefore, whether a worker's claim for additional statutory allowances violates the good faith principle by causing serious managerial difficulty to the employer or endangering the survival of the enterprise must be determined carefully and strictly (see Supreme Court Decision 2015Da217287, decided February 14, 2019).
2) Examining the following circumstances, which can be known from the reasoning of the judgment below and the record, in light of the above legal principles, it is difficult to conclude that paying additional statutory allowances by including the bonus at issue in this case in ordinary wages would cause serious managerial difficulty to the Defendant or endanger the survival of its enterprise.
A) As stated in the judgment below, even if including the bonus at issue in this case in ordinary wages would considerably increase the Defendant's employees' ordinary wages compared to the contractually agreed ordinary wages, and thereby considerably increase the total amount of wages the Defendant must pay, resulting in an unforeseen new financial burden, in light of the scale and trend of the annual sales revenue, gross profit, net income, total liabilities, and total capital, which have stably remained far in excess of 2 trillion won, the scale of the additional statutory allowances recognized in this case cannot provide sufficient grounds to conclude that the payment of such additional statutory allowances would directly cause serious managerial difficulty to the Defendant or endanger the survival of the enterprise.
B) The claim period in this case, from 2010 to 2014, corresponds to the Defendant's workout period, and although the Defendant's business situation somewhat worsened after the workout ended, such as an increase in net loss for the period, according to the audit reports on the Defendant's financial statements, semi-annual reports, and data organizing debt ratios submitted to and examined by the court below, the Defendant's debt ratio decreased considerably during the workout period, and the Defendant showed stable annual sales revenue and substantial net income for the period, such that its business situation improved and the workout was terminated. It is thus difficult to conclude that the payment of the additional statutory allowances recognized in this case would cause the Defendant the same serious managerial difficulty as at the time the workout commenced, or endanger the survival of the enterprise.
C. Nevertheless, the court below determined, based solely on circumstances such as the Defendant's financial situation as stated in its reasoning, that the Plaintiffs' claim for unpaid statutory allowances was not permissible as it violated the good faith principle. This determination by the court below erred by misunderstanding the legal principles concerning the good faith principle in relation to claims for additional statutory allowances arising from adding regular bonuses to ordinary wages. The ground of appeal pointing this out is well-founded.
2. Conclusion
Therefore, without examining the remaining grounds of appeal, the judgment below is reversed, and the case is remanded to the court below for further hearing and determination. This judgment is rendered as set forth in the Order by the unanimous opinion of the participating Justices.
Justice Roh Tae-ak (Presiding Justice), Kim Jae-hyung, Min Yu-suk (Justice in Charge), Lee Dong-won