[Plaintiffs, Appellants] Plaintiff 1 and 3 others (Attorneys at Law, Ansan Comprehensive Law Office, in charge attorney Im Jong-in and 5 others)
[Defendant, Appellee] Korea Electric Power Corporation (Attorney Song Geun-myeong)
[Judgment Below] Daejeon High Court Judgment 97Na9121 rendered on July 29, 1998
[Order]
The judgment below is reversed, and the case is remanded to the Daejeon High Court.
[Reasoning]
The grounds of appeal are examined.
1. According to the reasoning of the judgment below, the court below, comprehensively considering the evidence it adopted, found the following facts: the deceased Non-party 1 (hereinafter referred to only as "the deceased") joined the Defendant Corporation on February 24, 1965, and while working as the head of the substation division at the ○○○ Power Station of the Daejeon Power Management Office under the Defendant, he applied for honorary retirement on June 30, 1994, designating August 16, 1994 as his desired honorary retirement date; that under the Defendant Corporation's personnel management regulations, an employee wishing to take honorary retirement must apply for honorary retirement to the head of the personnel department at the head office through the head of his affiliated department (Article 107), and honorary retirees are to be determined by the president after deliberation by the standing personnel committee, targeting qualified persons (Article 106, Paragraph 1); that since implementing the honorary retirement system around 1987, the Defendant Corporation, upon receiving applications for honorary retirement from employees who wished to retire, had them designate their desired honorary retirement date, and accordingly approved the employee-designated desired honorary retirement date as the scheduled honorary retirement date; that under the Defendant Corporation's remuneration regulations, the wage calculation period runs from the 16th of the previous month to the 15th of the current month, but upon retirement, the full amount of wages for the final month is to be paid; that the deceased, together with Non-party 2 and Non-party 3, applied for honorary retirement, and in order to receive the salary for September 1994, they designated August 16, 1994 as their desired honorary retirement date; that the Defendant Corporation, on August 9, 1994, through a resolution of the standing personnel committee, finalized them as honorary retirees on that same day and approved their designated desired date as the scheduled honorary retirement date, whereupon the aforementioned non-parties other than the deceased received both the honorary retirement allowance and the salary for the final month, September 1994; that the deceased, however, died on August 14, 1994, of liver cancer and other causes, prior to the scheduled honorary retirement date; and that accordingly, the Defendant Corporation, pursuant to the provision of its employment rules (Article 58, Item 2) stipulating that an employee is automatically retired upon death, treated the deceased's retirement not as honorary retirement but as ordinary retirement, and paid only the ordinary retirement allowance to the Plaintiffs, who are the bereaved family.
Having found these facts, the court below rejected the Plaintiffs' argument that the scheduled honorary retirement date is merely a date set for the mutual convenience of both parties—for arranging the retiree's personal affairs and remaining work, and for the Defendant Corporation's batch processing of administrative matters—and that the effect of honorary retirement arises on the date the person is finalized as a subject of honorary retirement, such that the effect of the deceased's honorary retirement arose on August 9, 1994, when the Defendant Corporation finalized the deceased as a subject of honorary retirement, and therefore, even though the deceased died before the arrival of the scheduled honorary retirement date, this could not affect the original effect of the honorary retirement, so that the Defendant Corporation was obligated to pay the Plaintiffs the honorary retirement allowance prescribed by its remuneration regulations. In light of the procedure and circumstances for designating the scheduled honorary retirement date and the actual practice of paying honorary retirement allowances as found above, the court below held that the scheduled honorary retirement date cannot be regarded merely as a date set for the convenience of both parties as argued by the Plaintiffs, nor can it be said that the effect of honorary retirement arises on the date the person is finalized as a subject of honorary retirement; rather, its effect arises only on the scheduled honorary retirement date of August 16, 1994, and since the deceased died before that date, the deceased does not fall under the category of an honorary retiree. On this basis, the court below dismissed all of the Plaintiffs' claims.
2. In the case of honorary retirement, it is reasonable to view that the effect of retirement does not arise at the time a person is finalized as a subject of honorary retirement, but rather arises only on the scheduled honorary retirement date (see Supreme Court Decision 96Da56306 rendered on September 12, 1997). Therefore, the argument in the grounds of appeal to the contrary is without merit.
However, there is doubt as to the lower court's determination that, simply because the effect of honorary retirement arises only on the scheduled honorary retirement date, the honorary retirement allowance cannot be paid in a case where the person died before that scheduled date.
Honorary retirement means the termination of the employment relationship by agreement, whereby an employee makes an application (offer) for honorary retirement, and the employer, after examining the requirements, approves (accepts) it; once such an agreement has been reached, neither party may unilaterally withdraw the declaration of intent, and once the scheduled honorary retirement date arrives pursuant to this agreement, the employee is naturally retired and the employer bears the obligation to pay the honorary retirement allowance. However, in light of the purpose of the honorary retirement system—which is to provide monetary compensation to induce employees who have not yet reached the mandatory retirement age to retire early, in the context of reducing the workforce for cost-cutting management or resolving personnel congestion—as well as the actual operational practice of the honorary retirement system at the Defendant Corporation as revealed in the record, the circumstances leading to the agreement on honorary retirement in this case, and the period between the date of approval of honorary retirement and the scheduled honorary retirement date, there is doubt as to whether the intention of the parties at the time of the agreement was that, even in a case where retirement occurs due to a cause not attributable to the employee, such as death, before the scheduled honorary retirement date, the honorary retirement allowance would not be paid on the ground that honorary retirement could not take effect on the scheduled honorary retirement date.
Therefore, the court below should have examined whether the intention of the parties at the time of the agreement on honorary retirement was that the payment of the honorary retirement allowance was conditioned, in any and all circumstances including even the case of death, on the continuation of the employment relationship until the scheduled honorary retirement date, and should have determined the merits of the Plaintiffs' claims based on such examination. However, without conducting such examination, the court below rejected the Plaintiffs' claims on the premise that such a condition existed. Accordingly, the judgment below has a defect in that it failed to fully examine the matter, which affected the judgment, and the argument in the grounds of appeal pointing this out is well-founded.
3. Therefore, without the need to further examine the remaining grounds of appeal raised by the Plaintiffs' litigation representative, the judgment below is reversed and the case is remanded to the court below, by the unanimous opinion of the participating Justices, as set forth in the Order.
Justice Kim Hyeong-seon (Presiding Justice), Justice Cho Mu-je, Justice Lee Yong-woo (Justice in Charge)