[Plaintiff, Appellee] Plaintiff
[Defendant, Appellant] Hanjin Shipping Co., Ltd. (Attorneys Kim Hak-se and 1 other, for the litigation)
[Lower Court Judgment] Seoul District Court, Judgment rendered on May 25, 1995, Case No. 94Na36345
[Order]
The part of the lower court judgment against the Defendant is reversed, and this part of the case is remanded to the Panel Division of the Seoul District Court.
[Reasoning]
The grounds of appeal submitted by Defendant's litigation counsel (including, to the extent supplementary, the supplementary brief of grounds of appeal filed by Attorneys Yoo Kyung-hee and Kim Hak-se after the deadline) are examined together.
1. A transfer of employment (jeonjeok), whereby a worker is moved from the enterprise by which he is employed to a separate and distinct enterprise so as to engage in the work of that other enterprise, in principle takes effect only with the consent of the worker. However, in the case of a transfer between affiliated companies within a corporate group in which affiliated companies engaged in diverse types and forms of business conduct their economic activities with a certain degree of close relationship in terms of capital, composition of executives, business activities, and the like, such a transfer may be validly effected without obtaining the worker's specific consent, only where special circumstances exist, such as: (i) where the affiliated company to which the transfer is to be made has been specified in advance and prior consent has been obtained by clearly stating the basic working conditions, including matters concerning the duties to be performed at that company; or (ii) where there exists, within the corporate group, a practice of transferring workers to other affiliated companies without obtaining the workers' consent, and such practice has been clearly recognized within the enterprise as a normative fact governing the employment relationship in general, or has been generally accepted by the members of the enterprise without raising any objection thereto as a matter of course, thereby becoming established as a de facto system within the enterprise and recognized as constituting part of the content of the employment contract (see this Court's Decisions 95Da42270, rendered on May 10, 1996, and 92Da11695, rendered on January 26, 1993, among others).
Furthermore, since such a transfer of employment consists of a mutual agreement to terminate the employment relationship with the former enterprise and the conclusion of a new employment contract with the enterprise to which the worker is to be transferred, in a case where a valid transfer of employment has been effected, the worker's employment relationship with the former enterprise is severed, unless there exist special circumstances such as a special agreement between the parties to succeed to the employment relationship with the former enterprise, or a provision in the rules of employment, etc. of the enterprise to which the worker is to be transferred providing for the aggregation of the period of service with the former enterprise; and the enterprise to which the worker is transferred does not succeed to the worker's employment relationship with the former enterprise (see the above Decision 95Da42270, and this Court's Decisions 92Da19316, rendered on June 11, 1993, and 94Da20198, rendered on July 14, 1995, among others).
2. According to the reasoning of the lower court judgment, the lower court found the following facts: that the Plaintiff joined the Defendant company, an affiliate of the Hanjin Group, on December 15, 1980, worked there, and retired on November 30, 1986; that on the following day, he joined Korean Air Lines Co., Ltd. (hereinafter "the Non-party Company"), another affiliate of the same group, worked there until September 30, 1988, and retired; that starting from the following day, he rejoined the Defendant company, worked there, and finally retired on April 16, 1993; that the Hanjin Group, which has numerous affiliated companies including the Defendant company, the Non-party Company, and Hanjin Co., Ltd., decided around June 1986 to leave at the Defendant company only the minimum basic organization and personnel affiliated therewith, and to have the remaining organizational units and their affiliated personnel join eleven companies, including the shipping business division to be newly established within the Non-party Company (another affiliate within the same group), Hanjin Co., Ltd., and Dongyang Fire & Marine Insurance Co., Ltd.; that in accordance with the above decision, of the approximately 260 employees of the Defendant company, approximately 60 employees belonging to the Marine Affairs Department, Maintenance Department, Accounting Department, Materials Department, and general administrative departments remained with the Defendant company as they were, while among the remaining employees, 140 were transferred to the Non-party Company, approximately 30 to Hanjin Co., Ltd., and approximately 10 each to Dongyang Fire & Marine Insurance Co., Ltd., Korea Airport Co., Ltd., and Hanil Securities Co., Ltd., respectively; that the 140 employees, including the Plaintiff, who were transferred to the Non-party Company, went through the formal procedure of submitting letters of resignation to the Defendant company and joining the Non-party Company, but did not undergo any substantive procedure such as taking an entrance examination, and that these employees performed the same duties at the Non-party Company as they had performed at the Defendant company; that around September 1988, the Hanjin Group again decided to transfer the employees who had been transferred to the Non-party Company, etc., back to the Defendant company, and in accordance with this decision, most of the employees who had been transferred to the Non-party Company went through the formal procedure of submitting letters of resignation to the Non-party Company and joining the Defendant company, but did not undergo any substantive procedure such as taking an entrance examination, and these employees came to perform the same duties as before in their former departments at the Defendant company; and that the employees, including the Plaintiff, who were transferred back to the Defendant company, had their job rank, pay grade, and promotion recognized based on the time they had first joined the Defendant company, and had been receiving continuous service allowances calculated from that time. Based on these findings, the lower court determined that, although the Non-party Company and the Defendant company are separate companies with distinct legal personalities, both are affiliated companies belonging to the Hanjin Group; that the employees were not given a free opportunity to choose between continuing to work at the former company or being transferred, but were uniformly transferred according to their work departments pursuant to the management policy of the Hanjin Group, undergoing only the formal procedures of retirement from the former company and joining the new company; that throughout the period before and after the transfer, they performed the same duties, and their working conditions, including job rank, position, pay grade, and promotion, were handled based on the date of their initial employment; and that therefore, absent other special circumstances, the Plaintiff's periods of service at the Defendant company, the Non-party Company, and again at the Defendant company should be regarded as a single continuous period of employment in which continuity is maintained, such that it is appropriate for a single retirement allowance to be paid for the entire period; and that the mere fact that the Plaintiff received retirement allowances calculated solely based on his years of service at the Defendant company and the Non-party Company, respectively, at the time of each retirement, cannot be deemed to render the Plaintiff's claim in this case contrary to the principle of good faith.
3. However, according to the record, the Defendant argued, in addition to its assertion that the Plaintiff received the retirement allowances without any objection at the time of each retirement from the Defendant company and the Non-party Company, that at the time the Plaintiff retired from the Non-party Company and rejoined the Defendant company, the Plaintiff was given the choice of either receiving the retirement allowance calculated based solely on his years of service at the Non-party Company, or having that retirement allowance transferred to and accumulated with the Defendant company so as to receive aggregation of his periods of service; and that since the Plaintiff, of his own free will, chose to receive the retirement allowance, the continuity of his service should be deemed to have been severed. The testimony of Witness 1 and Witness 2, adopted by the lower court, is sufficient to establish the facts asserted by the Defendant as above.
If the facts are as stated above, then the Plaintiff's retirement from the Non-party Company was determined by the Plaintiff's own free will, and the employment relationship at the Non-party Company was concluded by the receipt of the aforementioned retirement allowance; absent other special circumstances, it is difficult to view that it was succeeded to and continued by the Defendant company. Moreover, in this case, where it is not recognized that there was a comprehensive succession of rights and obligations, including the employment relationship, between the Non-party Company and the Defendant company through a transfer of business, merger, division of enterprise, or the like, the mere fact that the Defendant company and the Non-party Company belong to the same corporate group, and that the Defendant company, in accordance with the personnel policy of the Hanjin Group, took into account the Plaintiff's work experience at the Non-party Company and recognized his job rank, pay grade, and period of service based on the time of his initial joining of the Defendant company, cannot be said to have any bearing on the severance of the employment relationship (see the above Decision 95Da42270, and this Court's Decision 91Da31753, rendered on November 24, 1992).
Nevertheless, the lower court, without conducting any examination or making any determination as to the Defendant's above assertion, determined that the Plaintiff's service at the Defendant company and the Non-party Company constituted a single continuous period of employment in which the continuity of the employment relationship was maintained, and that it was therefore appropriate for a single retirement allowance to be paid for the entire period. In so doing, the lower court committed an error of law that misapprehended the legal principles concerning the calculation of years of service or continuous employment, thereby affecting the outcome of the judgment; and the point of the argument raising this issue is well-founded.
4. Therefore, the part of the lower court judgment against the Defendant is reversed, and this part of the case is remanded to the lower court for further examination and determination, in accordance with the unanimous opinion of the participating Justices, as set forth in the Order.
Justice Cheon Gyeong-song (Presiding Justice), Justice Ahn Yong-deuk, Justice Ji Chang-gwon (Justice in Charge), Justice Shin Seong-taek