[Plaintiff, Appellant]
[Defendant, Appellee] Korea Electric Power Maintenance Co., Ltd., Attorney Ham Jeong-ho, Litigation Representative
[Judgment Below] Seoul High Court Decision 90Na45108 rendered on March 22, 1991
[Order]
The judgment below is reversed and the case is remanded to the Seoul High Court.
[Reasoning]
The grounds of appeal by the Plaintiff's litigation representative are examined.
1. The court below, citing the reasoning of the first instance judgment, found as follows: Non-party Korea Electric Power Maintenance Corporation (hereinafter "the non-party corporation") continued its business primarily focused on power generation facility maintenance for Korea Electric Power Corporation, and on December 31, 1981, was absorbed and merged into non-party Korea Heavy Industries Co., Ltd. (hereinafter "Korea Heavy Industries"). Subsequently, in order to specialize in power facility maintenance, the Defendant company was established on March 27, 1984, and on March 31, 1984, it acquired the power generation facility maintenance business division from Korea Heavy Industries and has continued that business since then. This fact is not disputed between the parties. Based on the evidence presented, the court below found that the Plaintiff joined the aforementioned non-party corporation on May 14, 1978, and worked there; that when Korea Heavy Industries absorbed and merged with the non-party corporation on December 31, 1981, the Plaintiff retired from the non-party corporation on the same date and received 3,027,289 won as retirement pay for the period from the date of joining to December 31, 1981; that the Plaintiff then went through the formality of rejoining Korea Heavy Industries on January 1, 1982, and worked at Korea Heavy Industries thereafter; that subsequently, when the Defendant company acquired the power generation facility maintenance business division from Korea Heavy Industries on March 31, 1984, the Plaintiff retired from Korea Heavy Industries on the same date and received 1,420,159 won solely as retirement pay for the period from January 1, 1982, to March 31, 1984; that the Plaintiff then worked at the Defendant company from April 1, 1984; that the Plaintiff retired from the Defendant company upon reaching mandatory retirement age on November 14, 1988; and that the Plaintiff received 7,681,119 won as retirement pay for the period from April 1, 1984, to November 14, 1988.
The Plaintiff argued that since the Defendant company had comprehensively succeeded to all of the property, claims, obligations, and employment relationships of the original non-party corporation via Korea Heavy Industries, which had merged with the non-party corporation, the Plaintiff had, despite having gone through the formalities of joining and retiring during the process of the merger and business transfer and having received retirement pay, in reality worked continuously without interruption from the non-party corporation through to the Defendant company. The Plaintiff thus sought payment of 7,524,948 won, which is the amount remaining after deducting the 12,128,558 won already received from the total retirement pay of 19,653,506 won calculated, in accordance with the Defendant company's regulations, for the 10 years and 6 months of service from May 14, 1978, when the Plaintiff joined the non-party corporation, to the date of retirement from the Defendant company.
In response to this argument, the court below held that there was no evidence to support the Plaintiff's assertion that the Defendant company had comprehensively succeeded to the employment relationship with the non-party corporation via Korea Heavy Industries, which had absorbed and merged with the non-party corporation. Rather, the court below found, based on the fact that the Defendant company had acquired only the power generation facility maintenance business division from Korea Heavy Industries, together with the evidence presented, that in acquiring the aforementioned power generation facility maintenance business from Korea Heavy Industries, the Defendant company comprehensively acquired the power generation facility maintenance business of Korea Heavy Industries, all assets, liabilities, and related contracts pertaining to that business, claims and obligations, all employees engaged in that business, and all rights and obligations of Korea Heavy Industries with respect thereto (Article 1 of the said transfer agreement), provided, however, that with respect to the period for calculating employees' retirement pay, it was agreed that the period of service at Korea Heavy Industries would not be included in the years of service at the Defendant company (proviso to Article 9, Paragraph 3 of the said transfer agreement). Based on these findings, the court below determined that the Plaintiff's employment relationship with Korea Heavy Industries terminated when the Plaintiff retired from Korea Heavy Industries on March 31, 1984, and received retirement pay, and that a new employment relationship with the Defendant company commenced simultaneously with the Plaintiff's personnel appointment to the Defendant company on April 1, 1984. Accordingly, the court below held that the Plaintiff's argument, which was premised on the position that the Plaintiff's original employment relationship with the non-party corporation had been comprehensively succeeded via Korea Heavy Industries to the Defendant company and should therefore be treated as continuous service for the purpose of calculating retirement pay, was without merit, without any need for further examination.
2. However, even based on the facts as found by the court below itself, it is clear that since the non-party corporation was absorbed and merged into Korea Heavy Industries, all rights and obligations of the non-party corporation were comprehensively succeeded to by Korea Heavy Industries. Furthermore, although the Defendant company acquired from Korea Heavy Industries only the power generation facility maintenance business division, which was a part of Korea Heavy Industries' business, the parties agreed to comprehensively transfer all assets, liabilities, related contracts, claims and obligations pertaining to that business, as well as all employees engaged in that business and Korea Heavy Industries' rights and obligations with respect to them, and in accordance with this agreement, the Plaintiff and other employees continued to work. Therefore, the employment relationship between Korea Heavy Industries and the Plaintiff and other employees must be regarded as having been comprehensively succeeded to by the Defendant company pursuant to the said agreement. It should not be concluded, merely on the ground that the Plaintiff received retirement pay at the time of the merger or business transfer as found by the court below, that the employment relationship with the said company terminated at that time and a new employment relationship with the Defendant company commenced.
It is true that the Defendant company, at the time of the said comprehensive succession agreement with Korea Heavy Industries, inserted a proviso clause stating that, solely with respect to the period for calculating employees' retirement pay, the period would not be included in the years of service at the Defendant company. However, this constitutes an exception clause that restricts an employee's vested rights concerning the length of service while comprehensively succeeding to the prior employment relationship, and therefore should be regarded as not binding on the employee absent the employee's consent. Examining the judgment below and the record, there is no trace that the court below examined or determined whether such consent existed.
Furthermore, the court below found that the Plaintiff went through the formality of retiring and rejoining each time the aforementioned merger and business transfer occurred, receiving retirement pay and continuing to work. If the Plaintiff had voluntarily submitted a letter of resignation and received retirement pay, there may be room to view this as the Plaintiff having consented to the discontinuation of continuous service. However, if, to the contrary, the non-party corporation or Korea Heavy Industries merely adopted the internal formality of retirement and rejoining as a means of paying retirement pay to the Plaintiff, then the mere fact that retirement pay was received through such formality cannot be deemed to constitute consent to the discontinuation of continuous service.
Yet, examining the record, while it is established that the Plaintiff received interim retirement pay, there is no material whatsoever from which to ascertain whether the formality of retirement and rejoining was in fact followed, or whether this was done upon receipt of a voluntarily submitted letter of resignation from the Plaintiff. (The court below stated in its judgment that the Plaintiff himself argued that he went through the formality of joining and retiring during the process of the merger and business transfer and received retirement pay; however, examination of the record reveals no trace that the Plaintiff made such an argument.)
Ultimately, the judgment below contains errors of law regarding the length of continuous service that forms the basis for calculating retirement pay, insufficient examination, and errors in the assessment of evidence, which affected the judgment and constitute unlawfulness. The relevant grounds of appeal are well-founded.
3. Therefore, the judgment below is reversed and the case is remanded, and this judgment is rendered as stated in the Order by the unanimous opinion of the participating Justices.
Justice Lee Jae-seong (Presiding Justice), Lee Hoi-chang, Bae Man-un