[Plaintiffs, Appellees] Plaintiff 1 and 30 others, Litigation Representative: Attorneys Lee Sang-hyeok, Lim Han-gyeong
[Defendant, Appellant] Korea Electric Power Corporation, Litigation Representative: Attorneys Gye Chang-eop, Kang Seo-ryong
[Original Judgment] Seoul High Court Decision 72Na810, decided December 1, 1972
[Order]
The part of the judgment below unfavorable to the Defendant is reversed, and the case is remanded to the Seoul High Court.
[Reasoning] The grounds of appeal by the Defendant's litigation representatives are examined.
According to the original judgment, the court below found that the deceased Nonparty, the decedent of Plaintiffs (25) through (31), and Plaintiffs (1) through (24) (hereinafter collectively referred to as "the Plaintiffs") each joined the Gyeongseong Electric Co., Ltd., Namseon Electric Co., Ltd., Joseon Jeonop Co., Ltd., or the Defendant Company, which were predecessor entities of the Defendant Company, between 1945 and 1961, and retired from the Defendant Company upon reaching mandatory retirement age between August 1969 and January 1971, and that during the Plaintiffs' employment, the Defendant Company had regularly and continuously paid the Plaintiffs bonuses four times a year, once every three months. The court below determined that the aforementioned bonuses should be regarded as a type of wages paid by the Defendant Company to the Plaintiffs, and held that even though Article 18 of the Enforcement Rules of the Defendant Company's Remuneration Regulations, which were in effect at the time of the Plaintiffs' retirement, did not list the aforementioned bonuses among the items used as the basis for calculating average wages, the enumeration of the various types of wages listed in that Article was merely illustrative, and that bonuses should naturally be included among the items used as the basis for calculating average wages under that Article. The court below then held that, accordingly, it was erroneous for the Defendant Company not to have included the aforementioned bonuses as a basis for calculating retirement pay when it paid retirement pay to the Plaintiffs upon their retirement, and that the Plaintiffs' claim in this case for additional payment of the amount of retirement pay corresponding to the aforementioned bonus portion was justified.
However, according to Article 2 of the Defendant Company's Remuneration Regulations in effect at the time of the Plaintiffs' retirement, the types of remuneration were classified as follows: (1) standard wages (ordinary wages), (2) extraordinary wages (various allowances), and (3) other; and further, (1) standard wages were subdivided into base pay and job pay, (2) extraordinary wages were subdivided into overtime work allowance, night work allowance, electricity repair standby duty allowance, special work allowance, and remote area allowance, and (3) other was subdivided into vacation compensation, bonus, and retirement solatium. Article 30 thereof provided that the retirement solatium (retirement pay) shall be the full amount obtained by multiplying the average wage at the time of retirement or death by the payment rate under Articles 26 and 27. Article 18, Paragraph 1 of the Enforcement Rules of the Remuneration Regulations (prior to the amendment of February 18, 1971) provided that the calculation of average wages under Article 30 of the Regulations shall be made by dividing by three the sum of the standard wages and extraordinary wages paid during the final three months prior to the date of resignation, plus the amount equivalent to 3/12 of the monthly leave compensation and the annual leave compensation paid in the previous year. It can be seen that among the types of wages enumerated in these Enforcement Rules as the basis for calculating average wages, only bonuses, among the types of wages specified in Article 2 of the aforementioned Remuneration Regulations governing the types of the Defendant Company's remuneration, were excluded. In light of this point, it cannot but be concluded that the enumeration of the types of wages under the aforementioned Enforcement Rules was not merely illustrative but restrictive. (Article 18, Paragraph 1 of the aforementioned Enforcement Rules of the Defendant Company was subsequently amended on February 18, 1971, to newly add bonuses to the types of wages forming the basis for calculating average wages.)
If that is indeed the case, it must be said that the original judgment erred in regarding the average wage under the Labor Standards Act (근로기준법) as being of the same nature as the average wage under the Defendant Company's Remuneration Regulations and their Enforcement Rules in effect at the time of retirement, and, without setting forth any reasonable grounds whatsoever, concluding that the enumeration of the various types of wages specified as the basis for calculating average wages under the aforementioned Enforcement Rules of the Remuneration Regulations was merely illustrative, and determining that bonuses were naturally included therein.
Now, Article 28 of the Labor Standards Act concerning the payment of retirement pay provides that an employer shall establish a system whereby a retiring worker is paid retirement pay of at least 30 days' average wage for each year of continuous service. The "average wage" referred to herein refers to the average wage under Article 19 of the same Act, and the wages forming the basis for calculating this average wage should be deemed to include the bonuses that the Defendant Company in this case paid to the Plaintiffs. However, the aforementioned Article 28 of the Labor Standards Act is a provision prescribing the minimum floor for the amount of retirement pay that an employer must pay to a retiring worker, and if the amount of retirement pay calculated for the Plaintiffs by the Defendant Company in accordance with the aforementioned Remuneration Regulations and their Enforcement Rules, without using bonuses as a basis for calculation, exceeds the amount of the floor guaranteed by the aforementioned Labor Standards Act, then the aforementioned Remuneration Regulations, etc. cannot be regarded as unlawful provisions in violation of Article 28 of the Labor Standards Act (the Defendant Company prescribes a fairly high progressive payment rate according to years of service in calculating retirement pay; see Articles 26 and 27 of the Remuneration Regulations) (see Supreme Court Decision 71Da485, decided May 11, 1971, and Supreme Court Decision 73Da1384, decided November 13, 1973, respectively).
In this case, the court below should have ascertained whether the amount of retirement pay already paid by the Defendant to the Plaintiffs at the time of their retirement exceeded the floor for retirement pay under Article 28 of the aforementioned Labor Standards Act, and, if it did exceed such floor, should have rejected the Plaintiffs' claim in this case for additional payment of retirement pay as unjustified. Nevertheless, the court below, having erred in its interpretation of the aforementioned Remuneration Regulations and their Enforcement Rules of the Defendant Company, failed to exhaust its examination of the above point, thereby committing an illegality that affected the outcome of the judgment.
The argument is well-founded on this point, and accordingly, the part of the original judgment unfavorable to the Defendant is reversed and the case is remanded to the court below.
The opinions of the participating Justices on this judgment are unanimous.
Supreme Court Justices: Lee Byeong-ho (Presiding Justice), Ju Jae-hwang, Kim Yeong-se, Lee Il-gyu