[Plaintiffs, Appellees] Plaintiff 1 and 37 others (Attorneys Kim Jun-hyo and 3 others, Counsel for the Plaintiffs)
[Defendant, Appellant] Jung-gu, Seoul Metropolitan City (Cho Rim Law Firm, Attorney Park Sang-gi, Counsel for the Defendant)
[Judgment Below] Seoul District Court Judgment 2002Na33020, decided January 16, 2003
[Order]
Of the portion of the judgment below concerning delay damages, the part in which the Defendant lost, insofar as it exceeds the amount calculated at the rate of 5% per annum from October 31, 2001 to May 31, 2003, and at the rate of 20% per annum from the following day until the date of full payment, on each amount stated in the column "Amount Claimed by Each Plaintiff" in the attached table to the first instance judgment, is reversed, and the corresponding part of the first instance judgment is vacated, and the Plaintiffs' claims corresponding thereto are each dismissed. The remainder of the Defendant's appeal is dismissed in its entirety. The total costs of the litigation shall be borne by the Defendant.
[Reasoning] The grounds of appeal are examined.
1. Regarding the average wage forming the basis for calculating retirement allowance
If a family allowance is one that the employer is obligated to pay, and has been uniformly paid to workers who meet certain requirements, then it does not constitute a discretionary or gratuitous payment, but rather is of the nature of remuneration for labor and thus constitutes wages (see Supreme Court Decision 2000Da18127, decided May 31, 2002; Supreme Court en banc Decision 93Da26168, decided July 11, 1995, etc.).
In the same vein, the court below was justified in rejecting the Defendant's argument that the family allowance, as a discretionary or gratuitous payment, should not be included in the average wage forming the basis for calculating retirement allowance, on the ground that the Defendant uniformly paid the family allowance to all environmental sanitation workers who met certain requirements, and there is no error of law in misunderstanding the legal doctrine on average wage in this regard.
The Supreme Court precedents cited in the grounds of appeal concern different facts and are not appropriate to be invoked in this case.
2. Regarding the agreement to exclude the family allowance from the average wage
According to the reasoning of the judgment below, the court below determined as follows regarding the Defendant's argument that "at the 1993 Labor-Management Council, there was an express or implied agreement not to include the family allowance in the average wage": it is recognized that at the Labor-Management Council held on September 14, 1993, it was resolved to include the transportation subsidy, which began to be paid from 1993, in the average wage, and that the Seoul Metropolitan City Labor Union, in reporting to its members on October 22, 1993 that the Labor-Management Council had resolved to include the transportation subsidy in the average wage, stated in its report "Items excluded from average wage (2 types) - family allowance, child tuition subsidy allowance"; however, this merely confirmed the practice, existing up to that time, whereby the Defendant had not included the family allowance in the average wage when calculating retirement allowances, in the context of the Labor-Management Council's decision at that time to include the transportation subsidy within the scope of wages forming the basis for calculating the average wage, and it is difficult to view this as an implied agreement to exclude the family allowance from the scope of wages forming the basis for calculating the average wage. Moreover, there is no other evidence to support the Defendant's argument; rather, according to the evidence cited in the judgment, it can be recognized that at the said Labor-Management Council, only the question of whether to include the transportation subsidy in the average wage was at issue, and no discussion whatsoever took place regarding whether to exclude the family allowance from the average wage. On this basis, the court below rejected the Defendant's above argument.
Upon examining the relevant evidence in light of the record, the above findings and determination of the court below are acceptable, and there is no error of law in misapprehending the facts in violation of the rules of evidence.
Meanwhile, according to the record, it is recognized that in February 1996, the Seoul Metropolitan City Labor Union sent a document to the Seoul Metropolitan City entitled "Request for Notification of Agreement on Retirement Allowance Calculation Method (Example)," stating: "Pursuant to the Ministry of Home Affairs' (1996 Local Government Budget Formulation Guidelines), the wage payment items and amounts for union members have changed, causing confusion as the retirement allowance calculation methods differ among each autonomous district. Please review the attached retirement allowance calculation (example), and if there are matters to be corrected or if there is no objection, please regard this as a labor-management agreement and notify each autonomous district accordingly." The Seoul Metropolitan City accepted this as is and notified each autonomous district, and the family allowance was not mentioned among the items in the average wage forming the basis for calculating the retirement allowance therein. However, this appears merely to reflect the changed wage payment items and amounts in the calculation of retirement allowance, and it is difficult to view this as constituting an agreement to exclude the family allowance from the average wage forming the basis for calculating the retirement allowance. Therefore, even though the court below did not explicitly rule on this portion of the Defendant's argument, this cannot be deemed an omission of judgment that affected the outcome of the judgment.
3. Ex officio determination regarding the portion on delay damages
Upon ex officio examination, the Constitutional Court rendered a decision of unconstitutionality on April 24, 2003 regarding the portion "the interest rate prescribed by Presidential Decree" in the main text of Article 3, Paragraph 1 of the former Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings (소송촉진등에관한특례법) (before its amendment by Act No. 6868 of May 10, 2003). Thereafter, the amended provision of the said Act and the corresponding amended Regulation on the Statutory Interest Rate under the Main Text of Article 3, Paragraph 1 of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings (소송촉진등에관한특례법제3조제1항본문의법정이율에관한규정) (wholly amended by Presidential Decree No. 17981 of May 29, 2003) provide that, for cases pending before the courts at the time the amended Act takes effect, the statutory interest rate to be applied on and after June 1, 2003 shall be 20% per annum. Accordingly, for the amounts awarded by the court below, delay damages should have been ordered at the civil statutory interest rate of 5% per annum until May 31, 2003, before the amended Act took effect, and at the rate of 20% per annum pursuant to the amended Act from June 1, 2003 until the date of full payment. However, the judgment below, having applied the pre-amendment statutory provision to the entire period from October 31, 2001 onward and awarded delay damages at the rate of 25% per annum, consequently contains an error of law in misapplying the statutory interest rate for delay damages, which affected the judgment.
4. Conclusion
Therefore, of the portion of the judgment below concerning delay damages, the part in which the Defendant lost, insofar as it exceeds the delay damages calculated at the rate of 5% per annum prescribed by the Civil Act (민법) from October 31, 2001 to May 31, 2003, and at the rate of 20% per annum prescribed by the amended Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings from the following day until the date of full payment, on each amount stated in the column "Amount Claimed by Each Plaintiff" in the attached table to the first instance judgment, is reversed. As this Court finds it sufficient to render judgment directly on this portion, this Court renders its own judgment thereon: the portion of the first instance judgment corresponding to the reversed portion is vacated, and the Plaintiffs' claims corresponding thereto are each dismissed. The remainder of the Defendant's appeal is without merit and is dismissed in its entirety. It is so decided by the unanimous opinion of the participating Justices as set forth in the Order.
Presiding Justice Kang Shin-uk
Justice Byun Jae-seung (Justice in charge)
Justice Yoon Jae-sik
Justice Ko Hyun-chul