[Plaintiff, Appellant]
[Defendant, Appellee] Daewoo Corporation, Attorneys Hwang Ju-myeong and 2 others, Counsel for the Defendant
[Judgment Below] Seoul High Court Decision 92Na26927 rendered on February 18, 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.
The court below found the following facts: the non-party Daewoo Trading Co., Ltd. (hereinafter “the non-party company”), which the Plaintiff had joined and worked for prior to its merger into and absorption by the Defendant company, consisted of office workers working at the head office located in Seoul and production workers working at the Busan factory; among the businesses operated by the non-party company, trade-related business, etc., was mainly carried out by employees of the head office, while the Busan factory produced textile products, etc., in accordance with the instructions of the head office, such that the head office and the Busan factory were organically and organizationally operated as one; and in terms of management as well, the head office and the Busan factory were operated as an integrated whole under the same representative director and in accordance with the resolutions and instructions of the same board of directors. The court below also found that, pursuant to Article 28(2) of the Labor Standards Act (Labor Standards Act, 근로기준법) (as amended by Act No. 3349 of December 31, 1980) and the latter part of Paragraph 2 of the Addenda, as of April 1, 1981, the progressive rate of severance pay that had been applied to head office employees was amended to be identical to the flat (non-progressive) rate applicable to employees of the Busan factory, to which the largest number of employees of the non-party company belonged, provided that the previous progressive rate would continue to apply to the period of service rendered before the amendment.
Based on these findings, the court below held that “one business” as referred to in Article 28(2) of the Labor Standards Act means, absent special circumstances, the business entity itself that constitutes a single management unit, and that, in light of the management structure of the non-party company as found above, it was reasonable to view the Seoul head office and the Busan factory of the non-party company as constituting “one business” under the aforementioned statutory provision. The court below further held that the non-party company was required, pursuant to Article 28(2) of the Labor Standards Act, to unify its previously differentiated severance pay systems into one; that if it were to leave the systems unchanged, then pursuant to the latter part of Paragraph 2 of the Addenda, the flat rate applicable to the employees of the Busan factory, to which the largest number of employees belonged, would also apply to the employees of the Seoul head office; and that, considering that the previous progressive rate was to continue to apply to the existing period of service, the amended severance pay regulation should be deemed valid regardless of whether the employees consented thereto or whether it was reported to the relevant authorities. The court below also held that even if the regulation had not been amended as above, the same result would follow, since, pursuant to the aforementioned Paragraph 2 of the Addenda, the flat-rate severance pay regulation applicable to the employees of the Busan factory, who constituted the largest group of employees of the non-party company, would equally apply. On this basis, the court below dismissed the Plaintiff’s claim seeking payment of the difference between the amount of severance pay calculated under the previous progressive rate and the amount of severance pay actually paid to the Plaintiff under the flat rate.
Upon examination, the legislative purpose of Article 28(2) of the Labor Standards Act is to prohibit discriminatory treatment through the maintenance of different severance pay systems by job type, position, or type of business within a single business, and to require the application of a single severance pay system. Accordingly, the term “business” as used therein means, absent special circumstances, the business entity itself that constitutes a single management unit (see this Court’s Decision 91Da21381 rendered on February 9, 1993). It is acceptable that the court below, based on the facts as found, viewed the Seoul head office and the Busan factory of the non-party company as constituting “one business,” and, in light of the circumstances set forth in its reasoning, held the amended regulation to be valid. There is no error of misapprehension of the applicable law, as argued in the grounds of appeal.
The argument is without merit.
Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. This judgment is rendered as set forth in the Order by the unanimous opinion of the Justices involved.
Chief Justice Choi Jong-yeong (Presiding Justice), Justice Bae Man-woon, Justice Kim Seok-su (Justice in charge)