[Plaintiff, Appellee]
[Defendant, Appellant] Korean Air Service Co., Ltd. (주식회사 한국항공), Litigation Representative Hanmi Joint Law Office, Attorneys Yu Gyeong-hui and 3 others
[Judgment Below] Busan High Court Decision 91Na4300 delivered on September 27, 1991
[Order]
The appeal is dismissed.
The costs of the appeal shall be borne by the Defendant.
[Reasoning]
We examine the grounds of appeal.
The court below, citing the reasoning of the first instance judgment, found as follows: the Plaintiff joined non-party Seoul Wasa Co., Ltd. (hereinafter "Seoul Wasa") on June 1, 1969, and worked at its Busan sales office; on June 1, 1971, in accordance with the company's management policy, the Plaintiff was transferred, without going through the procedures of resignation and re-employment, to non-party Korean Air Lines Co., Ltd. (hereinafter "Korean Air Lines"), an affiliated company within the same Hanjin Group as Seoul Wasa, and worked at the Busan Fueling Station of the Aviation Fuel Supply Depot; the content of his duties was identical to that at Seoul Wasa, and his job grade, pay step, and promotion were determined based on his date of hire at Seoul Wasa; thereafter, as Korean Air Lines decided to transfer its aircraft fueling business department to the Defendant company, another affiliate within the same group, and accordingly decided to transfer the business of the aforementioned Busan Fueling Station as well, transferring both the physical facilities and the affiliation of the employees, including the Plaintiff, the Plaintiff resigned from Korean Air Lines on May 15, 1978, and, in the form of joining the Defendant company the following day, May 16, received retirement pay of 2,686,281 won for his period of continuous service up to that point. The court below further found that although the Plaintiff formally submitted a letter of resignation, since he in fact continued to handle the same content of work at the same location, the Defendant company processed his personnel matters as if he had merely been transferred through a change of post, and continued to calculate his job grade, pay step, and promotion by aggregating the period from his original date of hire at Seoul Wasa through his period of service at Korean Air Lines; and that the Plaintiff retired from the Defendant company upon reaching the mandatory retirement age on June 23, 1990.
Based on these findings, the court below determined that although the three companies at which the Plaintiff worked were separate corporate entities with distinct legal personalities, they were all affiliated companies belonging to the Hanjin Group, and the Plaintiff was transferred to work at another company within the same group of affiliated enterprises not by his own need or wish but in accordance with the management policy of the Hanjin Group; that with respect to the transfer from Seoul Wasa to Korean Air Lines, no separate procedure of resignation and re-employment was undertaken at all; and that with respect to the transfer from Korean Air Lines to the Defendant company, the forms of resignation and re-employment were merely adopted as a means of achieving the substantive purpose of adjusting business operations among affiliated companies within the group. The court below further found that the content of the work performed by the Plaintiff was identical both before and after the transfer, and that with respect to working conditions such as job grade, pay step, promotion, and long-service commendation, matters were processed based on the Plaintiff's original date of hire at Seoul Wasa; whereas, in the absence of any other evidence establishing that there was a separate agreement providing that the period of continuous service serving as the basis for calculating the Plaintiff's retirement pay would not be aggregated but would instead be calculated based solely on the period after the transfer, the Plaintiff's work at the aforementioned three companies must be regarded as a single continuous period of employment maintaining continuity, and it is appropriate that a single retirement pay be paid for the entirety of that period.
As found by the court below, where an enterprise transfers a portion of its business division to another enterprise together with the physical facilities thereof, and in doing so also changes the affiliation of the employees working in the transferred business division, in principle the employment relationship of the relevant employees is succeeded to by the transferee enterprise and its continuity is maintained. In such a case, if an employee, with the intention of voluntarily severing the continuous employment relationship, submits a letter of resignation to the transferor enterprise, receives retirement pay, and then joins the transferee enterprise, the employment relationship with the former is thereby severed, and if the employee subsequently retires after working at the transferee enterprise, the employee will receive only the retirement pay corresponding to the period of service at that enterprise. However, if this is not due to the employee's own volition, but is merely a device for the transferor enterprise to pay retirement pay, or a matter of undergoing the forms of retirement and re-employment pursuant to a unilateral decision made in accordance with the management policy of the transferor and transferee enterprises, then even though retirement pay was received through such forms, it cannot be said that the employee had the intention to sever the employment relationship, and accordingly the continuous employment relationship is not severed either. In such a case, when the employee finally retires from the enterprise that ultimately took over the business, that enterprise is obligated to pay the remainder after deducting the retirement pay already paid from the retirement pay corresponding to the aggregated years of continuous service.
The first instance judgment, as cited by the court below, is deemed to have made a determination to the same effect, and is therefore justified. It cannot be said that there is an error of law therein, as argued in the grounds of appeal, in misunderstanding the legal principles concerning the continuity of employment relationships. The argument is without merit.
Therefore, the appeal is dismissed, and the costs of the appeal are to be borne by the losing party. This judgment is rendered as stated in the Order by the unanimous opinion of the participating Justices.
Justice Lee Hoi-chang (Presiding Justice), Bae Man-woon, Kim Seok-su