[Plaintiff, Appellant] Plaintiff's litigation counsel, Attorney Kim Kwang-jeong
[Defendant, Appellee] Lotte Chilsung Beverage Co., Ltd., litigation counsel, Attorney Song Myeong-gwan
[Court Below] Seoul High Court Decision 92Na58252 rendered on March 9, 1993
[Order]
The appeal is dismissed. The costs of the appeal are to be borne by the Plaintiff.
[Reasoning]
The grounds of appeal are examined.
As to Ground 1
The court below, based on the evidence it cited, found that the Plaintiff had worked at Dongbang Cheongryang Eumryo Hapmyeong Hoesa (hereinafter "Dongbang Beverage") from around 1953 as a temporary factory worker (paid on a daily wage basis) who was hired every March and worked only until August, not working during the off-season from September to February of the following year, and that from around September 1965, the Plaintiff was hired as a regular employee ("wongong"), working continuously without distinction between peak and off-seasons and being paid on a monthly salary basis. Upon comparing the evidence adopted by the court below against the record, the above factual findings of the court below are found to be justified and acceptable, and there is no illegality of misapprehending the facts in violation of the rules of evidence as argued in the grounds of appeal. This ground is without merit.
As to Ground 2
According to the reasoning of the judgment below, the court below found the following facts: as sales of Dongbang Beverage's products, Chilsung Cider and Speci Cola, grew from 1966 onward, Dongbang Beverage began construction of a large-scale factory in Yangpyeong-dong, Yeongdeungpo-gu, Seoul around 1967, while at the same time pursuing a technical cooperation agreement with the American Pepsi-Cola Company in order to compete with Coca-Cola. Since Pepsi-Cola Company demanded, as a precondition for the technical cooperation, that Dongbang Beverage produce Pepsi-Cola as its main product, the management of Dongbang Beverage decided to establish a separate company that would handle Pepsi-Cola as its main product in order to meet Pepsi-Cola's demand, while maintaining the existing business foundation built up around Chilsung Cider and Speci Cola. Accordingly, on November 29, 1967, Dongbang Beverage established Hanmi Food Industry Co., Ltd. (hereinafter "Hanmi Food") as the company to handle Pepsi-Cola as its main product, using the large-scale production plant built in the above Yangpyeong-dong as a dedicated plant to produce Pepsi-Cola, and on November 27, 1968, established Chilsung Eumryo Gongeop Co., Ltd. (hereinafter "Chilsung Beverage"), based on Dongbang Beverage's existing sales network and production facilities, to focus on the production of Chilsung Cider and Speci Cola. In the process, among the approximately 300 employees of Dongbang Beverage, some had their affiliation changed to Hanmi Food or Chilsung Beverage; Dongbang Beverage had some of its employees transferred to the newly established Hanmi Food or Chilsung Beverage, having them go through the process of retiring from Dongbang Beverage and newly joining each of the above newly established companies, and paying them the prescribed severance pay. As a result, Dongbang Beverage was, in substance, dissolved and existed only on paper, until it was absorbed into Hanmi Food on January 5, 1970; thereafter, Hanmi Food absorbed Chilsung Beverage as well on February 28, 1973, changing its name to Chilsung Hanmi Eumryo Gongeop Co., Ltd., and then changed its name again to the Defendant company on December 30, 1974. Meanwhile, the Plaintiff, having worked at Dongbang Beverage as a temporary factory worker from around 1953 as described above, was hired as a regular employee ("wongong") from September 1965; as Dongbang Beverage was dissolved and Chilsung Beverage was established, the Plaintiff retired from Dongbang Beverage on December 31, 1968, receiving severance pay of KRW 55,890, equivalent to three months' salary, corresponding to his slightly more than three years of service as a regular employee, and newly joined Chilsung Beverage on January 1 of the following year; thereafter, the Plaintiff continued to work as an employee, including as a general affairs section chief, even after Chilsung Beverage was absorbed into Hanmi Food and its name was changed to the Defendant company, until he retired from the Defendant company upon reaching the mandatory retirement age at the end of October 1990.
Based on these findings, the court below addressed the Plaintiff's argument that, since Dongbang Beverage transferred almost all of its business facilities and personnel to Chilsung Beverage around the end of December 1968, and the Plaintiff, though retiring from Dongbang Beverage and joining Chilsung Beverage, continuously worked in the same place performing the same duties without interruption, and since what he received upon retiring from Dongbang Beverage was merely a consolation payment amounting to only 20 percent of the proper severance pay, the Defendant should calculate severance pay based on a period of continuous service commencing from 1953, when the Plaintiff joined Dongbang Beverage. The court below rejected this argument, holding that, as found above, since the Plaintiff worked only during the six-month peak season from March to August each year from 1953 to August 1965 as a temporary factory worker paid on a daily basis, it is difficult to view that during that period of slightly over 12 years the Plaintiff maintained a continuous relationship of employment and subordination with the company and continuously worked for the company; therefore, the Plaintiff's period of service at Dongbang Beverage was merely the slightly more than three years he served as a regular employee from September 1965 to the end of December 1968, and the three months' salary the Plaintiff received upon retiring from Dongbang Beverage should be regarded as having been paid as severance pay. Furthermore, in light of the fact that, while part of Dongbang Beverage's business organization was absorbed into Chilsung Beverage, the remaining part was absorbed into Hanmi Food, and only some of Dongbang Beverage's employees were transferred, it is difficult to view, as the Plaintiff argues, that the entirety of Dongbang Beverage's personnel and physical organization related to its business was taken over by Chilsung Beverage. On these grounds, the court below determined that the Plaintiff's period of continuous service ultimately amounted to 21 years, running from January 1, 1969, when he joined Chilsung Beverage, until October 31, 1990, when he retired from the Defendant company.
A transfer of business refers to the transfer, as a unified whole while maintaining its identity, of an operation organized for a certain purpose, that is, a personnel and physical organization (see this Court's Decision 91Da15225 rendered on August 9, 1991), and a transfer of only part of a business is also possible; where such a transfer of business has occurred, in principle the employment relationships of the relevant employees are succeeded to by the acquiring enterprise, as argued in the grounds of appeal (see this Court's Decisions 90Da16801 rendered on May 28, 1991; 91Da12806 rendered on November 12, 1991; 91Da40276 rendered on July 14, 1992, etc.). However, even if, as found by the court below, Chilsung Beverage came to produce Chilsung Cider and Speci Cola based on Dongbang Beverage's existing sales network and production facilities, it is difficult to conclude from this alone that there was an agreement between Dongbang Beverage and Chilsung Beverage regarding a transfer of business, whereby the whole or part of Dongbang Beverage's business, as an organic organization including employment relationships with employees, was to be transferred. Moreover, in light of the fact that some of Dongbang Beverage's employees were made to retire from Dongbang Beverage and were hired in the form of new employment, it cannot be said that Chilsung Beverage took over the employees of Dongbang Beverage related to the above business as they were, with their previous working conditions or job ranks intact; furthermore, according to the record, it is found that some of Dongbang Beverage's employees remained with Dongbang Beverage as they were. In addition, there is no evidence to find that Chilsung Beverage took over all of Dongbang Beverage's other assets, liabilities, claims, and obligations related thereto, and thus it is difficult to view that Chilsung Beverage substantially and comprehensively acquired the whole or part of Dongbang Beverage's business (indeed, as found by the court below, Dongbang Beverage was absorbed into Hanmi Food on January 5, 1970, after Chilsung Beverage had already been established). This being so, although the court below's reasoning was somewhat insufficient in its explanation, its holding that it is difficult to view that the entirety of Dongbang Beverage's personnel and physical organization related to its business was taken over by Chilsung Beverage should ultimately be understood as holding that there was no transfer of business as argued in the grounds of appeal. Furthermore, the precedents relied upon in the grounds of appeal all concern cases in which there was an agreement on a transfer of business, and are cases with facts different from the present case, and thus are not appropriate to invoke in this case.
Moreover, even assuming that Chilsung Beverage's establishment based on Dongbang Beverage's production facilities and sales network, and its production of the same type of products, constituted a so-called corporate split or a transfer of business as argued by the Plaintiff's litigation counsel, according to the findings of the court below, it appears that at the time the Plaintiff's affiliation was changed from Dongbang Beverage to Chilsung Beverage, Dongbang Beverage had not separately established severance pay regulations, and Chilsung Beverage also paid severance pay on a single-rate basis from the time of its establishment until it introduced a progressive severance pay system in 1972. Therefore, it cannot be found that it was disadvantageous to the employees, given the economic circumstances of the time, for Dongbang Beverage or Chilsung Beverage to have some of Dongbang Beverage's employees retire as described above and change their affiliation to Chilsung Beverage while receiving severance pay calculated on a single-rate basis in accordance with the Labor Standards Act (근로기준법); nor can it be said that this constituted unreasonable treatment of the employees concerned; nor is there any basis for criticism to the effect that there was an intent to evade the Labor Standards Act or that it was contrary to equity. Furthermore, in light of the fact, as noted above, that some employees remained with Dongbang Beverage as they were, it appears that the Plaintiff's retirement from Dongbang Beverage and receipt of the prescribed severance pay was based on his own voluntary intention, and it does not appear that this was compelled by the company's management policy or carried out merely as a formality. This being so, the employment relationship with Dongbang Beverage was severed by the Plaintiff's voluntary retirement, and therefore the court below's measure of calculating the Plaintiff's period of continuous service starting from January 1, 1969, when he newly joined Chilsung Beverage, is justified. Accordingly, it cannot be said that the judgment below contains any illegality of misapprehending the legal principles concerning the succession of employment relationships following a transfer of business or the legal principles concerning the continuity of employment relationships, as argued in the grounds of appeal. This ground is also without merit.
Therefore, the appeal is dismissed, and the costs of the appeal are to be borne by the losing party, in accordance with the unanimous opinion of the Justices participating in the judgment, as stated in the Order.
Supreme Court Justices: Ahn Yong-deuk (Presiding Justice), Cheon Gyeong-song, Ji Chang-gwon, Shin Seong-taek (Justice in charge)