[Plaintiff, Appellant] Plaintiff
[Defendant, Appellee] Defendant Corporation (Litigation representative: Ilshin Law Firm, attorneys Kim Jong-cheol and 3 others in charge)
[Judgment Below] Seoul High Court Judgment 98Na61700, rendered May 13, 1999
[Order]
The judgment below is reversed, and the case is remanded to the Seoul High Court.
[Reasoning]
1. Summary of the Reasoning of the First Instance Judgment and the Judgment Below
According to the judgment below and the reasoning of the first instance judgment cited by the court below, the court below found the following facts: that the Plaintiff was hired as a manager (gwajang) of the Defendant's EDA business division on September 18, 1997, worked there, and was dismissed on December 10 of the same year; that around September 1996, the Defendant comprehensively took over the business of computer wholesale and retail (hereinafter referred to as the "former enterprise"), which had been operated as a sole proprietorship under the trade name "Jason Advanced Technology" by a non-party (the Defendant's representative director) since around November 20, 1989, and thereafter continued to apply the former enterprise's rules of employment (hereinafter referred to as the "former Rules of Employment") as the Defendant's own Rules of Employment; that Article 6, Paragraph 1 of the former Rules of Employment provided that a newly hired person shall undergo a probationary period of three months from the date of hiring, Paragraph 2 of the same Article provided that a person during or upon expiration of the probationary period may be dismissed if it is determined that continued employment is inappropriate, and Paragraph 3 of the same Article provided that for a person who has been formally hired, the probationary period shall be included in the years of continuous service; that Article 7 of the Defendant's company regulations, Employment Rules (Chwieop Gyujeong), provided that a person newly hired as an employee must complete the prescribed probationary process; that at the time of concluding the employment contract with the Defendant, the Plaintiff did not execute a formal written employment contract, and although the Defendant did not explicitly inform the Plaintiff that, under the Rules of Employment, all newly hired employees were to undergo a three-month probationary period before being formally hired, and that the Plaintiff would likewise be formally hired only after the three-month probationary period, there was no agreement whatsoever that the probationary period provision would not apply to the Plaintiff and that the Plaintiff would be formally hired immediately. Based on these findings, the court below rejected the Plaintiff's argument that the Defendant had amended the former Rules of Employment so as to exclude the provisions on the probationary period and dismissal thereunder, on the ground that Defendant's Exhibit No. 4 alone was insufficient to establish such amendment. The court below then proceeded on the premise that the probationary period under the former Rules of Employment refers to a so-called trial employment period (siyong period) established to assess and evaluate an employee's job performance ability and aptitude before formal hiring, during which the employer retains discretion as to whether to hire the employee, and held: that although the Defendant did not explicitly notify the Plaintiff, at the time of concluding the employment contract, that the former Rules of Employment would apply to the Plaintiff such that the Plaintiff would be formally hired only after undergoing a three-month probationary period, since there was no agreement whatsoever between the Defendant and the Plaintiff to exclude the provision on the probationary period under the former Rules of Employment and to formally hire the Plaintiff immediately, the provision on the probationary period under the former Rules of Employment must be deemed to naturally apply to the Plaintiff as well (according to the above findings, the Defendant company is found to have hired the Plaintiff with the intention of establishing, in accordance with the former Rules of Employment, a three-month probationary period during which the right of rescission was reserved, and the Plaintiff, in light of the fact that the Plaintiff did not execute a formal written employment contract at the time of the said employment contract, as well as the treatment afforded to the Plaintiff, the circumstances of the company's operation, and the general practice regarding rules of employment, is found to have known, at the very least, that a probationary period of three months would apply at that time); and that the Defendant's action of dismissing the Plaintiff, in the sense of refusing to formally hire the Plaintiff as a regular employee after considering, during the trial employment period, the Plaintiff's work attitude, job performance ability, and disharmony within the workplace, and determining that the Plaintiff was unsuitable for employment, was objectively reasonable and could be found to be socially acceptable, and thus there was justifiable cause for the dismissal.
2. Determination on the Grounds for Appeal
The authority to formulate and amend Rules of Employment (Chwieop Gyuchik) belongs, in principle, to the employer, and thus the employer may formulate and amend the Rules of Employment according to its own intent. Where an employer amends the Rules of Employment, the amendment is valid regardless of whether it is disadvantageous to existing employees, and since the Rules of Employment presently having the force of law are the amended Rules of Employment, the amended Rules of Employment shall apply to an employee who enters into an employment relationship after the amendment (see Supreme Court en banc Decision 91Da45165, rendered December 22, 1992). Furthermore, where the Rules of Employment provide that the application of a trial employment period (siyong period) to a newly hired employee is an optional matter, whether or not the trial employment period is to apply to that employee must be expressly stated in the employment contract; and if the employment contract does not expressly state that a trial employment period applies, the employee must be deemed to have been hired as a regular employee rather than as a trial employee (see Supreme Court Decision 90Da4914, rendered November 26, 1991).
According to the record, the Defendant's company regulations (Defendant's Exhibit No. 4), which appear to have been enacted and enforced by the Defendant on January 3, 1997, consist of Condolence/Congratulatory Payment Regulations, Purchasing Business Regulations, Travel Expense Regulations, Personnel Management Regulations, Welfare Regulations, Regulations on Delegated Authority, and Chapter 1 Employment Rules, Chapter 2 Personnel Affairs (Section 1 Hiring, Section 2 Leave of Absence, Section 3 Dismissal from Position). Article 1 of the Employment Rules therein provides: "These Rules are established pursuant to the Labor Standards Act (근로기준법) for the purpose of setting forth basic matters concerning the employment of our company's employees." Article 2 provides: "Matters concerning the employment conditions of employees shall be governed by these Rules, except where otherwise specifically provided in other regulations." Article 7 (Probation) of Chapter 2, Section 1 (Hiring) provides: "A person newly hired as an employee must complete the prescribed probationary process." Since Rules of Employment refer to any set of rules containing standards concerning service discipline and working conditions, regardless of their title, the above company regulations must be deemed to constitute the Defendant's Rules of Employment, as they contain standards concerning the service discipline and working conditions of the Defendant's employees. In light of the structure and content of the above company regulations, it must be held that, at least with respect to any parts conflicting with the former Rules of Employment, the corresponding parts of the former Rules of Employment were amended thereby. Since Article 6 of the former Rules of Employment concerning the probationary period and Article 7 of the Defendant's company regulations are, in terms of content, conflicting provisions (if the Defendant had intended to retain, as is, the provision on the probationary period under the former Rules of Employment, the Defendant would presumably have provided in the newly established company regulations either that the former provision would govern the probationary period, or would have included a provision identical to that of the former Rules of Employment; therefore, insofar as Article 7 of the Defendant's company regulations, unlike the former Rules of Employment, provides for "the prescribed probationary period," this cannot be interpreted as merely referring to the three-month probationary period provided for in Article 6, Paragraph 1 of the former Rules of Employment), it must be held that Article 6 of the former Rules of Employment was amended by Article 7 of the above company regulations, and that, in relation to the Plaintiff, who entered into an employment relationship with the Defendant after the former Rules of Employment were amended, the amended Rules of Employment must naturally apply. If so, the court below should have examined what "the prescribed probationary period" provided for in the new Rules of Employment means; and if the Defendant did not specifically determine this matter, it must be held that this provision merely stipulates that a probationary period may be set forth in the employment contract, which leaves ample room to view this as a case where the Rules of Employment provide that the application of a trial employment period is an optional matter. Accordingly, insofar as the Defendant did not expressly state, in the employment contract with the Plaintiff, whether a trial employment period would apply, the Plaintiff must be found to have been hired as a regular employee rather than as a trial employee, and the court below should therefore have determined whether the dismissal of the Plaintiff, as the dismissal of a regular employee, was based on justifiable cause.
Nevertheless, the court below, on the premise that the former Rules of Employment had not been amended and continued to apply as they were to the conclusion of the employment contract with the Plaintiff, upheld the first instance judgment, which had determined that the dismissal of the Plaintiff was valid as an exercise of the right of rescission with respect to a trial employee. Such action by the court below violates the rules of evidence or reflects a misunderstanding of the legal principles concerning the amendment of Rules of Employment, resulting in a failure to fully examine the matter, which constitutes an error affecting the judgment. The ground for appeal pointing out this error is well-founded.
3. Accordingly, without determining the remaining grounds for appeal, the judgment below is reversed, and the case is remanded to the court below for further examination and adjudication. This judgment is rendered as set forth in the Order, the opinions of the participating Justices being unanimous.
Justice Cho Mu-je (Presiding Justice), Kim Hyeong-seon (Justice in charge), Lee Yong-woo