[Plaintiffs, Appellees] As listed in the attached list of plaintiffs. (Plaintiff 1 and 290 others) (Attorneys Kim Ki-deok and 2 others for the plaintiffs)
[Defendant, Appellant] Korea Housing & Urban Guarantee Corporation (Attorneys Ki Young-seok and 1 other, Law Firm Shin & Kim, for the defendant)
[Lower Court Judgment] Seoul High Court Decision 2015Na2054828, decided June 29, 2016
[Order]
All of the appeals are dismissed. The costs of the appeal are to be borne by the Defendant.
[Reasoning] The grounds of appeal (including the supplementary brief on the grounds of appeal filed after the expiration of the period for submitting the grounds of appeal, to the extent that it supplements the grounds of appeal) are examined as follows.
1. As to the misapplication of law regarding ordinary wages and the failure to fully examine the case
A. In order for a certain wage to fall within the scope of ordinary wages, it must be paid regularly, uniformly, and in a fixed manner. Where the payment or amount of a wage is determined by evaluating an employee's work performance during the period to which the payment relates, fixedness is generally denied for that wage. However, if a minimum amount of payment is guaranteed—such as where a fixed amount is paid even to an employee who receives the lowest grade in the performance evaluation—that minimum amount constitutes a fixed wage. Furthermore, where whether a particular wage is to be paid, or the amount thereof, in a given year is determined based on the employee's work performance in the preceding year, since the payment or the amount thereof becomes fixed for that year, such wage constitutes a fixed wage for that year (see, e.g., Supreme Court en banc Decision 2012Da89399, decided December 18, 2013).
B. According to the reasoning of the lower court's judgment and the record, the following facts may be found.
1) The Defendant had previously paid its employees performance-based pay (performance-based additional pay, management evaluation performance pay) in addition to basic pay, and around 2010, upon introducing an annual salary system, changed its wage structure to one consisting of basic annual salary and performance annual salary (performance-based additional pay, management evaluation performance pay), and has since paid performance annual salary.
2) Among the Defendant's performance annual salary, the performance-based additional pay consists of: (i) self-assessed performance pay, paid once a year in the year of payment in an amount equal to 50% of the monthly basic pay, based on an evaluation of the previous year's work performance; (ii) management evaluation conversion money, paid once, from 2012 onward, in the year of payment in an amount equal to 250% of the previous year's monthly basic pay, based on an evaluation of the previous year's work performance; (iii) the amount corresponding to abolished various allowances, paid once, to managerial-grade employees, in the year of payment in an amount equal to 80% of the previous year's monthly basic pay, based on an evaluation of the previous year's work performance; (iv) the amount corresponding to abolished adjustment allowance, paid monthly on each pay day in the year of payment in an amount equal to 40% of the previous year's monthly basic pay, based on an evaluation of the previous year's work performance; and (v) the amount incorporated into job-grade pay, paid to managerial-grade employees monthly on each pay day in the year of payment in an amount fixed according to job grade, based on an evaluation of the previous year's work performance.
3) Article 30 of the Defendant's Remuneration Regulations provides that "the President may pay performance-based additional pay according to the results of internal evaluation, and the criteria for such payment shall be separately determined by the President," and Article 22 of the Annual Salary System Regulations provides that "the President shall pay performance-based additional pay according to the results of the interim evaluation by department, and the criteria for payment shall be determined by the Standing Board of Directors."
4) The Defendant has paid performance-based additional pay in accordance with the Government's "Guidelines for Budget Execution of Public Enterprises and Quasi-Governmental Institutions," and the Government has set the criteria for payment of performance-based additional pay in those guidelines every year.
5) From 2011 to 2015, the Defendant's Standing Board of Directors resolved, each year in January or February, on the recipients and the criteria for payment of performance-based additional pay to be paid in the year of payment to employees who had worked in the previous year, based on their work performance in the previous year, and the payment rate for the lowest grade, Grade D, of the performance-based additional pay has consistently been determined to be 66% or more.
C. In light of the foregoing legal principles, and considering the above facts, the performance-based additional pay that the Defendant has paid to the Plaintiffs is one for which the obligation to pay is provided for in the Remuneration Regulations and the Annual Salary System Regulations, has been paid continuously and regularly, and, based on the Plaintiffs' work performance in the previous year, the payment and the amount thereof were fixed for the current year in accordance with the resolution of the Standing Board of Directors; moreover, even for the lowest grade in the performance evaluation, a minimum amount of payment was guaranteed. In addition, there are no special circumstances from which it may be found that the Defendant merely delayed the timing of payment of performance-based additional pay that was to be paid for the previous year.
Therefore, the above performance-based additional pay should be regarded, for the year in question, as a fixed wage included in ordinary wages. The lower court's determination to the same effect contains no error, as alleged in the grounds of appeal, of misapplying the law regarding ordinary wages, or of failing to conduct the necessary examination, or of violating the rules of logic and experience in violation of the principle of free evaluation of evidence, such as to have affected the outcome of the judgment.
2. As to the misapplication of law regarding average wages and the failure to fully examine the case
A. Where a public enterprise or quasi-governmental institution, pursuant to the Act on the Management of Public Institutions (hereinafter the "Public Institutions Management Act"), pays performance-based pay (hereinafter "management evaluation performance pay") to its employees based on the results of the management performance evaluation conducted by the Minister of Economy and Finance, the issue in this part of the case is whether the management evaluation performance pay falls within the wages that constitute the basis for the calculation of average wages.
Wages that form the basis for the calculation of average wages refer to money and valuables paid by the employer to the employee as consideration for labor, which are paid continuously and regularly to the employee, and for which the employer's obligation to pay is imposed by a collective agreement, employment rules, remuneration regulations, employment contract, labor practice, or the like (see, e.g., Supreme Court Decision 2001Da53950, decided October 23, 2001).
If management evaluation performance pay is paid continuously and regularly, and the recipients, conditions of payment, etc. are fixed such that the employer is obligated to pay it, then it should be regarded as having the nature of wages paid as consideration for labor, and therefore should be included in the wages forming the basis for the calculation of average wages. Even if the payment or the payment rate thereof may vary depending on the results of the management performance evaluation, this fact alone does not mean that the management evaluation performance pay is not paid as consideration for labor (see Supreme Court Decision 2015Du36157, decided October 12, 2018).
B. According to the reasoning of the lower court's judgment and the record, the following facts may be found.
1) The Defendant has paid management evaluation performance pay since before 2010, and such pay, based on an evaluation of employees' work performance in the previous year, has been paid twice a year in the year of payment, in an amount up to 500% of basic pay or basic annual salary until 2011, and up to a maximum of 250% from 2012 onward.
2) Article 30-3 of the Defendant's Remuneration Regulations provides that "the President shall pay management evaluation performance pay according to the results of the management performance evaluation, and the criteria for differential payment thereof shall be separately determined by the President," and Article 23 of the Annual Salary System Regulations provides that "management evaluation performance pay shall be paid on a differential basis according to the grade calculated pursuant to Article 14 of the Comprehensive Work Performance Rating Regulations, and the criteria for differential payment shall be determined by the Standing Board of Directors."
3) Article 48(1) of the Public Institutions Management Act provides that the Minister of Economy and Finance shall evaluate the management performance of public enterprises and quasi-governmental institutions. The Government has established, through the "Guidelines for Budget Execution of Public Enterprises and Quasi-Governmental Institutions," criteria for payment such as the number of payments of management evaluation performance pay, the number of differential grades, the ratio of personnel by grade, and the level of differentiation, and has determined the performance pay rate applicable to the Defendant according to the results of the management performance evaluation under the Public Institutions Management Act.
4) As described above, the Defendant, based on the performance pay rate determined by the Government each year, calculated the remaining performance bonus for its employees in accordance with the criteria and calculation methods set forth in the Remuneration Regulations, the Annual Salary System Regulations, and by the Standing Board of Directors, and paid it to its employees.
C. In light of the foregoing legal principles, and considering these facts, the management evaluation performance pay at issue, which the Defendant paid to the Plaintiffs from around 2011 to around 2015, was paid continuously and regularly, and, since the recipients, conditions of payment, etc. were fixed such that the employer was obligated to pay it, should be regarded as having the nature of wages paid as consideration for labor. The lower court's determination, to the same effect, that the remaining performance bonus at issue is included in the total amount of wages forming the basis for the calculation of average wages, is justified, and there is no error therein, as alleged in the grounds of appeal, of misapplying the law regarding average wages, or of failing to conduct the necessary examination, such as to have affected the outcome of the judgment.
3. As to the failure to state reasons regarding the defense of completion of extinctive prescription
Even if a court's judgment does not contain a specific and direct determination as to a matter asserted by a party, if it can be discerned from the overall tenor of the reasoning of the judgment that such assertion was accepted or rejected, this does not constitute an omission of determination; and even where no determination was actually made, if it is clear that the assertion would have been rejected, this does not affect the outcome of the judgment, and thus does not constitute an unlawful omission of determination (see Supreme Court Decision 2009Da88631, decided April 29, 2010).
It is true, as the Defendant asserts, that the reasoning of the lower court's judgment does not contain a specific and direct determination regarding the Defendant's defense of completion of extinctive prescription; however, in light of the tenor of the lower court's judgment, it can readily be discerned that the lower court rejected the Defendant's above assertion. Moreover, since the effect of interruption of extinctive prescription extends to the right to claim unpaid retirement allowance itself, upon examination of the record, it does not appear, as the Defendant asserts, that part of the right to claim retirement allowance has been extinguished by the completion of the prescription period.
Therefore, the lower court's judgment contains no error, as alleged in the grounds of appeal, of failing to state the reasons for the judgment, or of failing to conduct the necessary examination, such as to have affected the outcome of the judgment.
4. As to the misapplication of law regarding Article 3(1) of the Act on Special Cases Concerning Expedition of Legal Proceedings (소송촉진 등에 관한 특례법)
Upon examination in light of the relevant legal principles and the record, with respect to the plaintiffs for whom "0" is indicated in the delay damages column of the amount-recognized table in Attached List 2 to the lower court's judgment, the lower court's determination ordering the payment of delay damages under the Act on Special Cases Concerning Expedition of Legal Proceedings, from July 11, 2015, the day following service of the application to modify the purport and grounds of the claim in the first instance, on the respective amounts indicated in the "Partially Recognized Amount 1" column of Attached List 3, on the ground that it was not reasonable for the Defendant to contest such amounts, contains no error, as alleged in the grounds of appeal, of misapplying the law, such as to have affected the outcome of the judgment.
5. Conclusion
Therefore, since the Defendant's grounds of appeal are without merit, all of them are dismissed, and the costs of the appeal are to be borne by the losing party. This judgment is rendered as stated in the Order, by the unanimous opinion of the participating Justices.
[Attached List] List of Plaintiffs: omitted
Justice Lee Ki-taek (Presiding Justice), Kwon Soon-il, Park Jung-hwa, Kim Sun-soo (Justice in charge)