[Plaintiffs, Appellees] Plaintiff 1 and 137 others (Counsel for the plaintiffs: Attorney Cho Chang-gi)
[Defendant, Appellant] Korea Electric Power Corporation (Counsel for the defendant: Segye General Law Firm, Attorney in charge Lee Im-seong)
[Judgment Below] Seoul High Court Decision 2000Na8009 rendered on August 10, 2000
[Order]
The judgment below is reversed, and the case is remanded to the Seoul High Court.
[Reasoning]
1. According to the reasoning of the judgment below, the court below found the following facts: the Plaintiffs joined and worked for the Defendant Corporation and retired between January 17, 1997 and November 16, 1997; since its establishment in 1961 until 1996, the year immediately preceding the Plaintiffs' retirement, the Defendant, in each year, concluded collective agreements with the labor union on a specific date providing for wage increases for that year, and accordingly amended its Remuneration Regulations, which constitute its rules of employment; in doing so, the Defendant retroactively calculated and additionally paid to employees still in service the difference between the wages actually paid according to the previous year's Remuneration Regulations during the period from December 16 of the immediately preceding year to the day before the date of conclusion of the collective agreement for the relevant year, and the wages that would have been paid during the same period under the amended Remuneration Regulations (the "wage increase differential"); the Defendant likewise paid, to employees who had retired from the Defendant Corporation during the same period, the wage increase differential as well as the difference between the retirement allowance actually received and the retirement allowance that would have been calculated based on the wage increase differential had it been paid on the original payment date (the "retirement allowance increase differential"); and until 1996, no objection was raised by either labor or management regarding these measures. However, the court below found that after the Defendant concluded a collective agreement on November 19, 1997 and amended the Remuneration Regulations accordingly, the Defendant paid, on December 12, 1997, the wage increase differential accrued from December 16, 1996 to the day before the date of conclusion of the said collective agreement to employees who were in service as of the date of conclusion of the said collective agreement, but did not pay the wage increase differential accrued during the same period, nor the retirement allowance increase differential based thereon, to the Plaintiffs who had retired during the same period.
Based on these facts, the court below determined that, since its establishment, a practice had existed between labor and management at the Defendant Corporation whereby, whenever a collective agreement providing for a wage increase for the relevant year was concluded, the wage increase differential calculated according to the collective agreement concluded for that year was additionally paid not only to employees in service as of the date of conclusion of the collective agreement, but also to employees who had retired between December 16 of the immediately preceding year and the day before the date of conclusion of the collective agreement for the relevant year, and further, that the retirement allowance increase differential as described above was additionally paid to such retired employees; and that since no objection was raised by either labor or management to this practice, it should be considered that a so-called labor practice had been established between labor and management at the Defendant Corporation, whereby the method of additional wage payment as described above came to be recognized and settled as an implicit norm. The court below further determined that, in order for the Defendant to discontinue payment in a manner contrary to this pre-existing labor practice of additionally paying the wage and retirement allowance increase differentials calculated according to the collective agreement, the Defendant should have obtained the consent of the labor union organized by a majority of the employees or gone through some similar procedure, and since there was no assertion or proof that such a procedure had been followed, the court below concluded that the Defendant was obligated to additionally pay to the Plaintiffs, in accordance with the pre-existing labor practice, the wage and retirement allowance increase differentials calculated pursuant to the collective agreement dated November 19, 1997.
The court below then addressed the Defendant's argument that, since a collective agreement does not extend its effect to employees who had already retired before its conclusion, the Defendant had no obligation to pay to the Plaintiffs, who had already retired before the conclusion of the collective agreement of November 19, 1997, the wage and retirement allowance increase differentials calculated pursuant to said collective agreement. The court below rejected this argument on the ground that, inasmuch as the labor practice described above existed at the time the Plaintiffs retired from the Defendant, the Plaintiffs already held, at the time of their retirement, a conditional claim against the Defendant to demand the wage and retirement allowance increase differentials that would be calculated in the future according to the content of the collective agreement to be concluded in 1997, by virtue of said labor practice, with only the timing of payment and method of calculation being determined at a point in time after the Plaintiffs' retirement.
2. However, this determination by the court below cannot be upheld, for the following reasons.
A. According to the facts found by the court below, it can be seen that the Plaintiffs, upon retiring from the Defendant, received the full amount of wages and retirement allowances lawfully calculated in accordance with the employment contracts, collective agreements, and Remuneration Regulations in effect at the time of their retirement. Therefore, absent special circumstances, the Plaintiffs should, in principle, be unable to claim any further payment of wages or retirement allowances from the Defendant. Moreover, a collective agreement is, by its nature, an agreement concluded between a labor union and an employer or employers' association concerning working conditions and other matters arising in labor-management relations; where the labor union and the employer conclude a collective agreement retroactively consenting to or approving the standards by which existing working conditions such as wages, working hours, and retirement allowances are determined, the effect of such consent or approval arises only with respect to union members or employees who are engaged in work at the enterprise and thus subject to the application of the agreement after its implementation, and there is no room for such effect to arise with respect to employees who had already retired before the conclusion of the collective agreement; this holds true even where the working conditions were changed in a manner favorable to the employees (see Supreme Court Decision 98Da13747 delivered on June 9, 2000; Supreme Court Decision 98Da13716 delivered on April 10, 2001, etc.). Accordingly, as a matter of law, the Plaintiffs cannot directly demand payment of the wage increase differential and retirement allowance increase differential by invoking the collective agreement of November 19, 1997, which was concluded after their retirement.
B. It is not clear on what facts the labor-management practice relied upon by the court below is based; however, if it refers to the fact that the Defendant retroactively paid the wage increase differential to employees still in service, this is clearly in accordance with the collective agreement concluded between labor and management and the Remuneration Regulations amended thereunder, and there is no room for any labor-management practice to be established with respect to that. Furthermore, if the labor-management practice relied upon by the court below refers to the fact that the Defendant voluntarily and additionally paid the wage increase differential and retirement allowance increase differential even to employees who had already retired, this is merely an external circumstance that existed between the already-retired employees and the Defendant Corporation as their former employer, rather than a fact that existed between the labor union or a group of employees and the employer, and therefore, a labor-management practice between the labor union or a group of employees and the employer cannot be established on that basis either.
C. Nevertheless, it may be recognized that the Plaintiffs, while still in service with the Defendant, held an expectation, based on the fact that the Defendant had paid the wage and retirement allowance increase differentials to already-retired employees as described above, that they too would receive the same treatment upon their retirement. However, in order for such an expectation to constitute a conditional claim as recognized by the court below, there must have been established, in a normative sense, between the Defendant and its employees in service, a labor-management practice to the effect that "the collective agreement also applies to retired employees." In order for a particular practice existing within an enterprise to be deemed to constitute part of the content of an employment contract, such practice must be clearly recognized generally within the business community as a normative fact governing labor relations, or must be supported by a sense of normative obligation to such an extent that it can be said to have been established as a de facto institution within the enterprise, having been accepted as a matter of course by the members of the enterprise generally without anyone raising any objection (see Supreme Court Decision 92Da11695 delivered on January 26, 1993). However, in light of the fact that a collective agreement, by its inherent nature, extends its effect only to the members who are parties to the agreement, and the fact that employees who have already retired cannot, in principle, participate in, or instigate or incite, collective bargaining between the labor union and the employer (Article 40 of the Trade Union and Labor Relations Adjustment Act (노동조합및노동관계조정법)), it must be concluded that the sense of normative obligation itself, which is a requirement for the establishment of a labor-management practice of the kind described above, cannot be recognized; and since there is no material in the record showing otherwise that such a sense of normative obligation existed, it cannot be concluded, on this premise, that the conditional claim set forth by the court below was established.
3. Nevertheless, the court below granted the Plaintiffs' claim in this case in full based solely on the reasons set forth above; this constitutes an error of law that misapprehends the legal principles concerning the effect of collective agreements and the establishment of labor-management practices, and such error has affected the judgment. The argument in the grounds of appeal pointing this out is with merit.
4. Therefore, without examining the remaining grounds of appeal, the judgment below is reversed, and the case is remanded to the court below. This judgment is rendered as set forth in the Order, with the unanimous consent of the participating Justices.
Justice Lee Yong-woo (Presiding Justice), Justice Seo Seong, Justice Bae Gi-won, Justice Park Jae-yun (Justice in charge)