[Plaintiffs, Appellees]
[Defendant, Appellant] Korea Institute of Science and Technology, a foundation (Attorney Ko Seok-yun, Counsel for the Defendant)
[Lower Court Judgment] Seoul High Court Decision 94Na1809, decided May 17, 1994
[Order]
Among the portions of the lower court judgment that were decided against the Defendant, the portion concerning the Plaintiffs other than Plaintiff 2, Plaintiff 3, and Plaintiff 7 is reversed, and this portion of the case is remanded to the Seoul High Court. The Defendant's appeal against Plaintiff 2, Plaintiff 3, and Plaintiff 7 is dismissed in its entirety. The costs of appeal with respect to the portion in which the appeal was dismissed shall be borne by the Defendant.
[Reasoning]
The grounds of appeal submitted by counsel for the Defendant are examined as follows.
1. As to the grounds of appeal concerning the Plaintiffs other than Plaintiff 2, Plaintiff 3, and Plaintiff 7
A. According to the reasoning of the lower court judgment, the lower court found as follows: Articles 3 and 5 of the Defendant foundation's Retirement Allowance Payment Regulations (퇴직금지급규정) provide that retirement allowances shall be paid by applying the prescribed payment standard (progressive rate) according to years of service to the monthly wage amount; Article 4, Paragraph 3 provides that "monthly wage amount" means 30 days' worth of the average wage as defined in Article 19 of the Labor Standards Act (근로기준법); and Article 10 provides that, in the event of a serious situation arising that makes it impossible for the Defendant foundation to continue its operations (item 2), or any other situation that makes normal implementation of the above Regulations impossible (item 3), the application of the above Retirement Allowance Payment Regulations may be restricted, amended, or abolished. The reservation clause under Article 10 of the said Retirement Allowance Payment Regulations was a provision made in anticipation of a situation in which it would become financially impossible, due to budgetary constraints, to implement the retirement allowance system based on the progressive rate using the average wage under the Labor Standards Act as the basis for calculating retirement allowances pursuant to Articles 4 and 5 of the said Regulations, since the Defendant foundation, which had received operating expenses and other funds from the government budget every year since its establishment, was subject to the Government's Guidelines for Budget Support and Management of Specific Research Institutions (특정연구기관 예산지원관리준칙), which provided that reserves for retirement benefits could only be accrued up to 100% of the base salary. From around April 20, 1981, the Defendant foundation treated the budgetary limitation—namely, that reserves for retirement benefits could only be accrued up to 100% of the base salary—as falling under the grounds set forth in Article 10, item 3 of the above Retirement Allowance Payment Regulations, and decided to implement Article 4, Paragraph 3 in a restricted manner, such that only the taxed portions of the base salary, bonuses, annual/monthly leave allowances, and other allowances were included in the monthly wage amount serving as the basis for calculating retirement allowances. Then, on January 1, 1983, the Defendant foundation changed this policy and added research activity expenses, in addition to the above wages, to the calculation of retirement allowances. In accordance with this policy, when the Plaintiffs retired, only the base salary, research activity expenses, bonuses, and annual/monthly leave allowances were included as the basis for calculating retirement allowances. Having found these facts, the lower court held that Article 10 of the above Retirement Allowance Payment Regulations, in permitting the Retirement Allowance Payment Regulations to be changed to the disadvantage of employees without their consent, had the effect of circumventing Article 95 of the Labor Standards Act, which requires the consent of a labor union or a majority of employees when an employer changes the rules of employment, and thus was invalid in light of the purpose of Article 95 of the Labor Standards Act. The lower court further held that, even if this were not the case, the mere fact that the Defendant foundation could only accrue reserves for retirement benefits up to 100% of the base salary pursuant to the Government's Guidelines for Budget Support and Management of Specific Research Institutions could not be deemed to fall under the grounds prescribed in Article 10, item 3 of the above Regulations. Accordingly, the lower court concluded that, in paying retirement allowances to the Plaintiffs, the Defendant foundation could not exclude a portion of the Plaintiffs' wages from the basis for calculating retirement allowances pursuant to Article 10 of the above Retirement Allowance Payment Regulations, and that the Plaintiffs' retirement allowances must be calculated in accordance with Articles 3 through 5 of the above Retirement Allowance Payment Regulations.
B. The authority to draft and amend rules of employment lies, in principle, with the employer, and thus the employer may draft and amend the rules of employment according to its own will; however, where such amendment changes working conditions to the disadvantage of employees, the consent of the employees who were subject to the previous working conditions or rules of employment, obtained through a collective decision-making method, is required, and an amendment to the rules of employment made without such consent is invalid unless it can be recognized as having reasonableness in the light of social norms (see Supreme Court Decision 93Da14493, decided May 24, 1994). Meanwhile, where an employer changes working conditions prescribed in the rules of employment to the disadvantage of employees without obtaining the employees' consent, the amendment does not take effect as against existing employees whose vested interests are infringed by the change, and thus the previous rules of employment continue to apply as they are with respect to such employees; however, as against employees who, after the amendment, entered into an employment relationship accepting the working conditions under the amended rules of employment, the amended rules of employment must naturally apply, and there is no basis for holding that the previous rules of employment should apply even to employees hired after the amendment, for whom there exists no ground—namely, infringement of vested interests—for denying the effect of the amendment (see Supreme Court en banc Decision 91Da45165, decided December 22, 1992).
However, as lawfully established by the lower court, if the Defendant foundation implemented Article 4, Paragraph 3 of the above Retirement Allowance Payment Regulations in a restricted manner based on the reservation clause of Article 10 of the same Regulations, this constitutes an amendment of the above Retirement Allowance Payment Regulations, and thus the legal principles concerning the amendment of rules of employment as examined above apply as they are. Even if, as held by the lower court, the reservation clause of Article 10 of the same Regulations, which the Defendant foundation relied upon in implementing the above Retirement Allowance Payment Regulations in a restricted manner, is invalid, this is, in light of the fact that the authority to draft and amend rules of employment lies, in principle, with the employer, no different from a case in which the retirement allowance regulations were implemented in a restricted manner without obtaining the consent of existing employees. Accordingly, with respect to the Plaintiffs (the Plaintiffs other than Plaintiff 2, Plaintiff 3, and Plaintiff 7) who entered into an employment relationship accepting the working conditions then in effect after the Defendant foundation implemented Article 4, Paragraph 3 of the above Retirement Allowance Payment Regulations in a restricted manner, the Retirement Allowance Payment Regulations, as thus restrictively implemented, must naturally be deemed to apply.
C. Nevertheless, the lower court held that the original Article 4, Paragraph 3 of the Retirement Allowance Regulations should apply to the above Plaintiffs, and thus the lower court judgment contains an error in misunderstanding the legal principles concerning the amendment of rules of employment. Such an error clearly affected the outcome of the judgment, and thus the argument pointing this out has merit.
2. As to the grounds of appeal concerning Plaintiff 2, Plaintiff 3, and Plaintiff 7
In light of the relevant evidence and the record, it is recognized as proper that the lower court calculated the retirement allowances of Plaintiff 2, Plaintiff 3, and Plaintiff 7, who joined the Defendant foundation before the above Retirement Allowance Payment Regulations were implemented in a restricted manner, in accordance with the original Article 4, Paragraph 3 and Article 5 of the Retirement Allowance Payment Regulations, and it cannot be found that the lower court judgment contains the error alleged in the argument. Accordingly, this argument is without merit.
3. Therefore, among the portions of the lower court judgment decided against the Defendant, the portion concerning the Plaintiffs other than Plaintiff 2, Plaintiff 3, and Plaintiff 7 is reversed, and this portion of the case is remanded to the court below; the Defendant's appeal against Plaintiff 2, Plaintiff 3, and Plaintiff 7 is dismissed; and it is unanimously agreed among the participating Justices that the costs of appeal with respect to the portion in which the appeal was dismissed shall be borne by the Defendant, and the judgment is rendered as set forth in the Order.
Justice Shin Seong-taek (Presiding Justice), Cheon Gyeong-song, Ahn Yong-deuk (Justice in Charge), Ji Chang-gwon