[Plaintiff, Appellant] Choi Kyu-seong, Attorney Cho Jeong-je as counsel
[Defendant, Appellee] Korea Coal Corporation (대한석탄공사), Attorneys Kang Seo-ryong and Gye Chang-eop as counsel
[Original Judgment] Seoul High Court Decision 76Na2596 rendered on February 10, 1977
[Order]
The original judgment is reversed, and the case is remanded to the Seoul High Court.
[Reasoning]
The Court examines the grounds of appeal raised by the Plaintiff.
According to the original judgment, the court below rejected the Plaintiff's counsel's argument that the Defendant's special measures dated January 5, 1972 (Seokgong-Chongno 1240-5) and March 12, 1973 (Seokgong-Chongno 1240-314) concerning the calculation of retirement allowances (measures which lowered the standard for calculating the number of payment days by providing that, notwithstanding the previous progressive-day-rate provisions, the number of payment days for the period of continuous service after the last day of the month in which the amount calculated by multiplying the number of payment days under the previous retirement allowance regulations by the average wage came closest to 5,500,000 won would be set at 30 days per year) unilaterally and disadvantageously altered the working conditions under the previous retirement allowance regulations, which had become part of the employment contract, without hearing the opinions of the labor union or of a representative of the majority of the workers and without reporting this to the Labor Office, as required under Articles 94 and 95 of the Labor Standards Act (근로기준법), and that therefore, even if the Plaintiff had expressed consent thereto, such measures were void as being in violation of the collective agreement and the previous rules of employment.
The court below rejected this argument, holding as follows: rules of employment concerning working conditions, etc., are originally private autonomous rules of a discretionary nature; even if the Defendant, in implementing the above special measures, failed to hear the opinions of the labor union or of a representative of the majority of the workers and failed to carry out the reporting procedure to the Labor Office, this may result in sanctions under the Labor Standards Act, but it cannot be interpreted as negating the general validity of the rules of employment as such; rather, only where the amended rules of employment unilaterally alter, to the disadvantage of the workers, the previous rules of employment which have already become part of the employment contract, does such amendment become ineffective in relation to the employment contract unless the consent of the worker concerned, or consent through labor-management consultation, is obtained; since the Plaintiff consented to the amendment of the retirement allowance regulations made by the above special measures, the Plaintiff's argument that the number of payment days under the previous retirement allowance regulations should apply cannot be accepted.
However, rules of employment are drawn up by the employer, based on the employer's right to manage the enterprise, in order to uniformly and consistently establish the standards for workers' service discipline and working conditions within the workplace; and since the Labor Standards Act, in light of the reality of subordinate labor relations, mandates the preparation of such rules and confers upon them the character of legal norms as part of its purpose of protecting and strengthening the position of workers, who are in a substantively unequal position, and of protecting and improving their basic livelihood, it is in principle the employer who holds the authority to draw up and amend the rules of employment. However, where an amendment to the rules of employment unilaterally alters the content of existing working conditions to the disadvantage of the workers, the consent of the group of workers subject to the previous rules of employment, obtained through a method of collective decision-making by that group, is required. As for the method of obtaining such consent, where there exists a labor union organized by a majority of the workers, the consent of that union is required; where no such union exists, the consent of a majority of the workers obtained through a meeting-style procedure is required; without such consent, the amendment cannot have effect as a valid amendment of the rules of employment, and therefore, even as to a worker who individually consented to such amendment of the rules of employment, the amendment has no effect on that worker either.
The reason is as follows: for an employer unilaterally to alter existing working conditions to the disadvantage of workers is impermissible in light of the protective spirit of the Labor Standards Act as noted above, the principle of protection of vested rights, and the provision of Article 3 of the Labor Standards Act, which requires that working conditions be determined by the free will of the worker and the employer standing on equal footing. Moreover, if it were held that such a disadvantageous amendment is effective as against a worker who individually consented thereto, but ineffective as against a worker who did not consent, this would mean that, contrary to the basic premise of all labor-management relations statutes—namely that workers attain a position substantively equal to that of the employer only when acting collectively—the employer, standing in a substantively superior and unequal position, could easily conclude, in the form of an amendment to the rules of employment, individual employment contracts falling short of the existing rules of employment with individual workers. This would render Article 98 of the Labor Standards Act—which provides that an employment contract setting working conditions below the standards prescribed in the rules of employment is void only as to that portion, and that the void portion shall be governed by the standards set forth in the rules of employment, thereby establishing the rules of employment as a minimum standard—effectively meaningless in practice, and would also result in the practical coexistence of multiple sets of rules of employment within a single workplace, contrary to the necessity for uniform and consistent application of the rules of employment as legal norms. Furthermore, it is also appropriate, as a general procedure for amending legal norms applicable to a group, that an amendment to legal norms applicable to a group be made effective as to the group as a whole only upon obtaining the consent of the group through a collective decision.
Moreover, in the present case, Article 44 of the collective agreement between the Defendant and the labor union provides that retirement allowances shall be paid to retiring union members in accordance with standards determined by agreement between labor and management; accordingly, it follows that any amendment to the retirement allowance regulations enacted pursuant thereto must also be made through agreement between labor and management, and an amendment to the retirement allowance regulations made without such agreement must be held void under Article 36 of the Trade Union Act (노동조합법). It is clear from the record that there is no dispute between the parties that the Defendant's above special measures were not made through agreement between labor and management; therefore, if the Plaintiff is subject to the above collective agreement, the validity of the amendment to the retirement allowance regulations effected by the above special measures cannot be recognized on this ground as well.
In conclusion, the original judgment cannot but be found to contain an error of misapprehending the legal principles under the Labor Standards Act and the Trade Union Act concerning the amendment of rules of employment and the effect of collective agreements. Therefore, the argument is well-founded, and by the unanimous opinion of the participating Justices, the original judgment is reversed and the case is remanded, and it is decided as stated in the Order.
Justice Yang Byeong-ho (Presiding Justice), Ju Jae-hwang, Im Hang-jun, Ra Gil-jo