[Plaintiff, Appellant] Kum Kyo-yong, Attorney Jung Sang-cheon (Counsel for the Plaintiff)
[Defendant, Appellee] Kangwon Industries Co., Ltd., Attorneys Jang Kyung-chan and 1 other (Counsel for the Defendant)
[Original Judgment] Seoul High Court Decision 86Na3730 rendered on April 27, 1988
[Order]
The original judgment is reversed, and the case is remanded to the Seoul High Court.
[Reasoning]
As to the grounds for appeal:
Since a compromise (화해) is a contract that becomes effective when the parties agree to mutually concede and thereby terminate a dispute between them (Article 731 of the Civil Act (민법)), it is naturally the case that even if there was a mistake in the declaration of intent constituting the compromise contract, if the mistake concerns the very matter that the parties made the subject of the dispute and resolved through mutual concession, the compromise may not be rescinded on the ground of mistake (Article 732 and the main text of Article 733 of the Civil Act (민법)). On the other hand, it is equally clear that if the mistake does not concern a matter that was the subject of dispute between the parties, but rather concerns a matter that both parties presupposed as the premise or basis for the matter in dispute — such that it did not form part of the content of the mutual concession and was understood by both parties as a fact free from dispute or doubt — then this falls under "matters other than the dispute that is the object of the compromise" as provided in the proviso to Article 733 of the Civil Act (민법), and, absent other special circumstances, a party may rescind the compromise contract on the ground of mistake (see this Court's Decisions 4293Minsang101 rendered on December 14, 1961, and 64Da500 rendered on September 15, 1964).
However, in an actual compromise contract, the question of what was specifically disputed and resolved through mutual concession, and what was presupposed as the premise or basis of the compromise and thus constitutes a matter other than the dispute that is the object of the compromise, is a matter of interpreting the parties' intent that must be judged by examining the entire course of the conduct. In particular, where the degree of discrepancy between what was determined in the compromise contract and the truth significantly exceeds the scope of the parties' assertions, and it is clearly recognized that the parties had no particular doubt about, and did not treat as a subject of dispute, the portion exceeding the scope of their assertions — and accordingly did not make that portion part of the content of their mutual concession — then a mistake concerning matters exceeding the scope of such assertions falls under the case of a mistake concerning the premise or basis of the compromise. Accordingly, it is a reasonable interpretation, consistent with the specific intent of the parties who entered into the compromise, that the parties may dispute the validity of the compromise on the ground of mistake.
According to the reasoning of the original judgment, the court below, in response to the Plaintiff's claim for payment of a total of KRW 50,000,000 in retirement pay, etc. in this case, and the Defendant's defense that the Plaintiff had waived the entire claimed amount, found the following facts based on the evidence adopted: the Plaintiff joined the Defendant company on September 16, 1966 as a production department coal-transport worker and worked there; according to the Defendant company's records, the Plaintiff retired on October 31, 1972 and was rehired on December 1 of the same year, and again retired on January 15, 1982 and was rehired on February 1 of the same year; the Plaintiff finally retired from the Defendant company on October 2, 1984; thereafter, on November 7, 1984, the Plaintiff filed a petition (진정) with the Ministry of Labor (노동부) alleging that he had not been paid KRW 1,950,000 in holiday work and overtime work allowances and KRW 180,000 in retirement pay from the Defendant company; in the course of the investigation of that petition, on November 27 of the same year, the Plaintiff received a total of KRW 1,040,763 in additional retirement pay and holiday work allowances and other allowances from the Defendant, and prepared and delivered to the Head of the Taebaek Local Office of the Ministry of Labor a written withdrawal of the petition stating that he had received the full amount owed to him in overtime allowance, holiday work allowance, and the shortfall in retirement pay from the Defendant, and was accordingly withdrawing the petition. The court below then further reasoned as follows: where, in connection with a civil dispute, a person who filed a petition and the party against whom the petition was filed reach an agreement and the petition is thereupon withdrawn, it is the general practice, absent special circumstances, that all disputes related to that petition up to that point are resolved before the petition is withdrawn; as found above, at the time the Plaintiff reached an agreement with the Defendant company regarding retirement pay and other allowances and withdrew the petition accordingly, there is no evidence whatsoever showing that the Plaintiff reserved a claim for further retirement pay and allowances beyond the agreed amounts, or any special circumstance of a similar nature; therefore, the Plaintiff, through the above agreement and the consequent withdrawal of the petition, settled the dispute with the Defendant regarding the said retirement pay and allowances, and even if the agreed amount of retirement pay and allowances fell short of the amount actually owed, leaving a remaining debt corresponding to the difference, it should be regarded as having been agreed to be waived; accordingly, the court below held that the Defendant's above defense was well-founded. The court below then rejected the Plaintiff's claim in this case, holding, with respect to the Plaintiff's assertion that the above agreement should be rescinded on the ground of mistake as to an essential part of the content of the declaration of intent, that there was no evidence to support such assertion.
However, in the fact-finding portion in the earlier part of the reasoning of the original judgment, the court below merely found the fact that the Plaintiff filed a petition with the Ministry of Labor against the Defendant, received a total of KRW 1,040,763 in additional retirement pay, etc. from the Defendant, and prepared and delivered a written withdrawal of the petition to the Head of the Taebaek Local Office of the Ministry of Labor, without making any factual finding as to whether an agreement was actually reached between the Plaintiff and the Defendant regarding the amount of the remaining retirement pay and allowances. Nevertheless, in the concluding portion in the latter part of the reasoning of the original judgment, the court below determined that, since the Plaintiff and the Defendant reached an agreement on the amount of retirement pay and allowances and the petition was withdrawn, the Plaintiff should be deemed to have agreed to waive any remaining debt regarding retirement pay, etc., even if such debt still remained. In this respect, the original judgment cannot but be found to contain the illegality of inconsistency in reasoning or insufficiency of reasoning.
Furthermore, even assuming that it can be found, as stated in the concluding portion of the original judgment, that an agreement was reached between the Plaintiff and the Defendant regarding the amount of retirement pay, etc., the issue in this case is not whether an agreement or compromise was formed at all, but rather what matters constituted the content of the compromise. Taking together the purport of the Plaintiff's assertions, Defendant's Evidence No. 9, Defendant's Evidence No. 14-4, and Defendant's Evidence No. 16 (which the court below neither adopted nor rejected), and the testimony of Ju Jae-won, the labor supervisor (근로감독관) who investigated the above petition case, the following facts are recognized: as stated by the court below, the Plaintiff's records with the Defendant showed two instances of intermediate retirement processing; meanwhile, on December 29, 1972, the Defendant abolished the progressive-rate retirement pay payment regulation that had previously been applied to workers including the Plaintiff, and changed the retirement pay payment regulation to provide only 30 days' pay per year of service, in accordance with the Labor Standards Act (근로기준법), and implemented this change; the Plaintiff originally filed the petition with the Ministry of Labor asserting that, of his approximately 18 years of employment, he had not yet been paid, for the period of approximately 2 years and 9 months from around January 1982, when he was promoted to regular employee, until his final retirement around the end of September 1984, KRW 1,950,000 in holiday work and overtime work allowances and KRW 180,000 in retirement pay, totaling KRW 2,130,000; in the course of consultation with the Defendant, both the labor supervisor and the Defendant treated the Defendant's two instances of intermediate retirement processing of the Plaintiff and the change in the retirement pay payment regulation as naturally valid, and, on that premise, made the Plaintiff's asserted service period of 2 years and 9 months and the amount of KRW 2,130,000 in retirement pay, etc. the ceiling and scope of the dispute and negotiation, ultimately determining the remaining retirement pay, etc. to total KRW 1,040,763, which the Defendant then paid; and the Plaintiff, after withdrawing the petition, belatedly learned that both the intermediate retirement processing and the change in the retirement pay payment regulation were invalid, and accordingly filed this lawsuit, asserting that, if properly calculated, the additional retirement pay, etc. owed to him, after deducting the amounts already received, would amount to KRW 50,000,000. There appears to be no special circumstance warranting rejection of the above-mentioned testimony of the labor supervisor to this effect, whereas the contents of Defendant's Evidence No. 15, cited by the court below, do not appear to obstruct the above findings.
Now, where a worker submits a letter of resignation in accordance with the company's management policy and the company accepts it and processes the resignation, but the worker is immediately rehired in form, such that there is no substantial severance of the employment relationship before and after the retirement and the worker continues to work without interruption, the effects that would otherwise follow from the submission of the resignation letter and the retirement processing do not arise. Furthermore, where an employer amends provisions in the rules of employment (취업규칙) concerning retirement pay, which constitute working conditions, in a manner disadvantageous to workers compared to the existing rules of employment, such amendment constitutes an unreasonable disadvantageous amendment of the rules of employment, and such disadvantageous amendment of the rules of employment cannot take effect, and does not apply to the workers who were subject to the existing rules of employment, unless there is consent obtained through the collective decision-making method of the group of workers subject to the existing rules of employment (see this Court's Decision 87Daka2578 rendered on May 10, 1988, among others). Accordingly, if, as the Plaintiff asserts, the intermediate retirement processing and the change in the retirement pay payment regulation in this case meet the above requirements and can both be found invalid, it appears from the record that the number of days of retirement pay owed to the Plaintiff would be 1,410 days under the former retirement pay payment regulation (Plaintiff's Evidence No. 16-13), and that, even based on the average wage acknowledged by the Defendant (Defendant's Evidence No. 14-4), the retirement pay alone would amount to at least KRW 27,896,779 (19,784.95 × 1,410). Given that the amount actually owed to the Plaintiff by the Defendant thus significantly exceeds the amount asserted by the Plaintiff prior to reaching the above compromise, and given that it is clear that, in entering into this compromise, the Plaintiff and the Defendant did not intend, regardless of the true amount of retirement pay, etc. actually owed to the Plaintiff, to conclude the compromise contract with the intention that the Plaintiff would concede even as to amounts exceeding his asserted amount and thereby end the dispute, but rather that the compromise contract determined the amount of KRW 1,040,763 on the premise that the claimed amount of remaining retirement pay, etc. was capped at, and fell within the scope of, the KRW 2,130,000 originally asserted by the Plaintiff, then the mistake concerning this matter constitutes a mistake concerning a matter presupposed as the premise or basis of the compromise. Accordingly, it must be held that the Plaintiff may assert rescission of the compromise contract in this case on the ground of mistake concerning a matter other than the dispute that is the object of the compromise.
If so, the court below ought to have more closely examined whether the intermediate retirement processing and the change in the retirement pay payment regulation applied to the Plaintiff were valid, and the circumstances under which the Plaintiff received the amount stated by the court below from the Defendant and withdrew the petition in this case, and thereby carefully determined whether an agreement or compromise was indeed reached between the Plaintiff and the Defendant regarding the amount of the remaining debt for retirement pay, etc., and, if so, what matters were determined by that compromise contract. Nevertheless, without going into such matters, the court below readily rejected the Plaintiff's claim on the premise that, by the Plaintiff's receipt of a partial payment from the Defendant and withdrawal of the petition filed with the Ministry of Labor, an agreement had been reached regarding the entire amount of the remaining debt for retirement pay, etc. between the Plaintiff and the Defendant. This ultimately constitutes an illegality of insufficiency of reasoning or inconsistency of reasoning and insufficient examination, arising from a misunderstanding of the legal principles concerning the relationship between compromise and mistake, and affecting the judgment, which constitutes a ground for reversal under Article 12 of the Act on Special Cases Concerning Expedition of Legal Proceedings (소송촉진등에관한특례법). Accordingly, the argument pointing out this matter is well-founded.
Therefore, the original judgment is reversed, and the case is remanded to the Seoul High Court, which is the court below, for further examination, the opinions of the Justices involved being unanimous, and it is so decided as stated in the Order.
Justice Kim Ju-han (Presiding Justice), Lee Hoi-chang, Bae Seok, Kim Sang-won