[Plaintiff, Appellee] Plaintiff
[Defendant, Appellant] Junghwa Sil-eop Co., Ltd., Attorney Lim Chae-hong, Counsel for the Defendant
[Judgment Below] Seoul High Court Decision 94Na5702 rendered on September 30, 1994
[Order]
The judgment below is reversed, and the case is remanded to the Seoul High Court.
[Reasoning]
The grounds of appeal are examined.
1. According to the reasoning of the judgment below, the lower court found the following facts: the light textile spinning industry operated by the Defendant Company was gradually losing international competitiveness due to challenges from newly industrializing countries, including those in Southeast Asia, based on their cheap labor and raw materials, and the general economic downturn across domestic industries also affected the Defendant Company, resulting in a business loss of 1,458,410,085 won for the Defendant Company in fiscal year 1990. Due to such deteriorating management conditions, internal and external management improvement became necessary, and it became impossible to retain unnecessary surplus personnel across all departments. By around the time the Plaintiff came to work again at the Chuncheon Factory in his original position as a substation electrician, it had already been decided that only the Plaintiff and a non-party (hereinafter "the non-party") would be in charge of and handle the affairs of the substation. However, with the amendment of the Enforcement Regulations of the Electric Utility Act (전기사업법 시행규칙) on January 24, 1991, under Article 58 of the same Regulations, businesses such as the Defendant Company, whose electrical facility capacity was 1,000 kW or more but less than 5,000 kW, were required to appoint, in addition to an electrical safety manager, one electrical safety management staff member holding a Grade 1 or 2 electrical technician qualification or an Electrical Engineer Grade 2 or higher qualification, from among its employees. Accordingly, the Gangwon Branch of the non-party Korea Electrical Engineers Association, which had been designated as the institution responsible for the appointment and dismissal of safety management personnel, twice urged the Defendant Company to report the results of the appointment of an electrical safety management staff member. As a result, the Defendant Company held a personnel committee meeting on April 6, 1991, and decided to appoint one qualified person as the electrical safety management staff member. This resulted in a surplus of one person among the Plaintiff and the aforementioned non-party, both of whom were unqualified and had been working in the substation, making it inevitable that one of them be transferred or reassigned to another department. In this regard, the personnel committee, considering that the non-party was a graduate of the electrical engineering department of a technical high school, had majored in the electrical field, and had longer tenure working at the substation of the Chuncheon Factory than the Plaintiff, decided to keep him continuing to work at the substation, while deciding to promote the Plaintiff to the position of General Affairs Section Chief in the Supply Division of the General Affairs Department at the head office, which was vacant at the time. Although this was a clerical position, the committee judged that, since the department was in charge of purchasing machine parts and general consumable goods for each factory and handling simple tasks such as organizing invoices and purchase cards, the Plaintiff, who had worked in field positions for a long time, would be well able to perform such duties. The committee thus decided to promote the Plaintiff to the position of General Affairs Section Chief in the Supply Division of the General Affairs Department at the head office and have him handle materials affairs, and on April 15 of the same year, notified the Plaintiff of the said transfer disposition through the Chuncheon Factory manager, presenting him with the appointment order dated April 8 of the same year. Having found these facts, the lower court determined that the said transfer disposition was inevitably carried out for the efficient utilization of the Defendant Company's surplus personnel, that its business necessity was recognized, and that, in light of the major fields of study and career experience of the Plaintiff and the non-party, the rationality of selecting the Plaintiff as the subject of the transfer was also, in principle, recognized. Nevertheless, based on the evidence it adopted, the lower court also found that, shortly before the Plaintiff came to work again at the Defendant Company's Chuncheon Factory in his original position as a substation electrician, on October 23, 1990, in order to settle in Chuncheon, the Plaintiff's entire household of five—his elderly mother, his wife, and his elementary-school-aged child—moved from Gumi City to a two-room rented house in Hupyeong-dong, Chuncheon City, with a jeonse (lease) deposit of 9,000,000 won, and that around April 1991, the Plaintiff had even been preparing to apply for a workers' welfare housing unit in Seoksa-dong, Chuncheon City, being sold by the non-party Korea National Housing Corporation. However, the lower court found that the Defendant Company, without engaging in consultation or discussion to give appropriate consideration to the Plaintiff's living interests, such as by inquiring in advance whether the Plaintiff was willing to work in another department within the Chuncheon Factory, transferred the Plaintiff to the Defendant Company's head office General Affairs Department at 64-9 Dapsimni-dong, Dongdaemun-gu, Seoul, a place with which the Plaintiff had no connection whatsoever; that the Defendant Company's Seoul head office had no dormitory or other convenience facilities for employees whose residential base was not Seoul, nor any system such as transportation expense subsidies for employees commuting long distances; and that, given the Plaintiff's financial means, it would be difficult for him to maintain an adequate standard of living together with his family in Seoul. Based on these findings, the lower court held that the Defendant's transfer disposition against the Plaintiff not only imposed on the Plaintiff, the subject of the disposition, a serious disadvantage significantly exceeding the degree that an employee could ordinarily be expected to bear, but was also carried out without going through a process of sincere dialogue with the Plaintiff, such as by providing him an opportunity to have his views reflected—something required under the principle of good faith in order to give appropriate consideration to a transfer within the Chuncheon Factory, which would have caused the Plaintiff the least disadvantage, or to his other living interests. The lower court held that, in light of the aforementioned procedural defect together with the disadvantage the Plaintiff would suffer and the extent of the Defendant's need for personnel management, the transfer disposition constituted an abuse of the right of personnel management exceeding its permissible scope, and was therefore null and void. Furthermore, considering that the Defendant Company's transfer disposition against the Plaintiff was without justifiable reason and therefore void, and that the Plaintiff's failure to report to the Defendant Company's Seoul head office was a means of protesting against, or demanding correction of, the unjust transfer disposition, the lower court held that the disciplinary dismissal of the Plaintiff on the ground of unauthorized absence from work due to his refusal to comply with the transfer disposition was likewise void; and that, even if that were not the case, the said act of unauthorized absence, unlike ordinary unauthorized absence, could not be regarded as misconduct of such a degree that it would be markedly unreasonable to continue the employment relationship between the Plaintiff and Defendant. Therefore, the lower court concluded that the Defendant's decision to select dismissal—the heaviest form of disciplinary action under the Rules of Employment—against the Plaintiff constituted an abuse of the right of disciplinary action or an unjust decision contrary to the principle of equity, and accordingly held that the said disciplinary dismissal was also without justifiable reason and thus void.
2. In principle, the reassignment or transfer of an employee falls within the authority of the employer as the person holding personnel management authority, and therefore the employer has considerable discretion within the scope necessary for business operations; such a measure shall be valid unless there are special circumstances such as its violating the Labor Standards Act (근로기준법) or constituting an abuse of rights (see this Court's Decisions 86Daka2567 rendered on February 28, 1989; 90Da12366 rendered on September 24, 1991; and 90Da20428 rendered on October 25, 1991, among others). Whether a transfer disposition, etc. constitutes an abuse of rights should be determined by comparing and weighing the business necessity of the transfer disposition, etc. against the disadvantage to the employee's living conditions resulting from the transfer, etc. If the disadvantage to the employee's living conditions resulting from a transfer, etc. made out of business necessity does not markedly exceed the degree that the employee should ordinarily be expected to bear, this falls within the scope of legitimate personnel management authority and does not constitute an abuse of rights (see the above Decision 90Da20428).
In such cases, whether a sincere consultation procedure was held with the employee concerned in carrying out the transfer disposition, etc. may be considered one factor in determining whether the exercise of personnel management authority was legitimate; however, the mere fact that such a procedure was not followed cannot, by itself, render the transfer disposition, etc. an abuse of rights and thus automatically null and void (this Court's Decision 93Da47677 rendered on May 10, 1994).
Looking back at the present case, if, as found by the lower court, the transfer disposition against the Plaintiff in this case is recognized as being based on business necessity, then even considering the circumstances found by the lower court—namely, that the Plaintiff's household of five, including his elderly mother, wife, and elementary-school-aged child, moved from Gumi to Chuncheon in order to settle there and are living in a rented house, and that around April 1991 the Plaintiff was preparing to apply for a workers' welfare housing unit, and that the Defendant Company's Seoul head office, to which the Plaintiff was transferred, had no dormitory or other convenience facilities for employees and no system such as transportation expense subsidies for employees commuting long distances—the Plaintiff neither owned a house in Chuncheon nor had been allotted a workers' welfare housing unit; moreover, in this case, it appears that there is virtually no realistic possibility for the Plaintiff to commute long distance from Chuncheon, his place of residence, to the Seoul head office, in light of the distance and the time required using current means of transportation. Therefore, the fact that the Defendant did not establish a system such as transportation expense subsidies for long-distance commuters cannot be considered a fault on the Defendant's part; and given that dormitory facilities for transferred employees are not generally common, even if there is a disadvantage to the Plaintiff's living conditions in that, as a result of this transfer, he would have to newly secure lodging or housing that allows for commuting or lodging and meals, and would have to relocate alone to the Seoul head office, his new post, or move together with his family, such disadvantage is merely a disadvantage within the scope that an employee should ordinarily be expected to bear as a result of a transfer or reassignment, and cannot be said to be a disadvantage to living conditions that markedly exceeds such scope.
Furthermore, the lower court stated that, given the Plaintiff's financial means, it would be difficult for him to maintain an adequate standard of living together with his family in Seoul; however, considering current means of transportation, the Plaintiff could establish a residence in an area on the outskirts of Seoul from which commuting is possible, rather than within Seoul itself, and even if the cost of living, including housing costs, in Seoul is somewhat higher than in Chuncheon, it cannot be said that it is impossible or markedly difficult for the Plaintiff, given his economic standing, to live together with his family in Seoul.
Moreover, in light of the business necessity of the transfer disposition in this case and the degree of disadvantage to the Plaintiff's living conditions that would result therefrom, even if, as found by the lower court, the Defendant failed to consult with the Plaintiff in carrying out the transfer disposition, that fact alone cannot render the transfer disposition in this case an abuse of personnel management authority (indeed, since the Plaintiff has been insisting solely on continuing to work at the substation of the Chuncheon Factory where he had been working, it does not appear that the outcome would have been any different even had a prior consultation procedure been followed). Furthermore, according to the record, it appears that, in carrying out the transfer disposition in this case, the Defendant, in an effort to alleviate the disadvantage to the Plaintiff's living conditions, even issued a promotion order transferring the Plaintiff from the position of substation electrician to that of General Affairs Section Chief in the Supply Division of the General Affairs Department at the head office, even though the Plaintiff was not subject to regular promotion at the time.
If that is the case, then the lower court's determination, based solely on the circumstances stated in its judgment, that the transfer disposition in this case imposed on the Plaintiff a serious disadvantage markedly exceeding the degree that an employee could ordinarily be expected to bear, and its further holding—based on the assertion that the Defendant, in the process of carrying out the transfer disposition in this case, failed to engage in sincere dialogue with the Plaintiff, as required under the principle of good faith, in order to give appropriate consideration to a transfer within the Chuncheon Factory or to his other living interests, and that the transfer disposition in this case therefore constituted an abuse of personnel management authority and was void—that the disciplinary dismissal of the Plaintiff on the ground of unauthorized absence from work due to his refusal to comply with the transfer disposition in this case was likewise void, constitutes an error in the misapprehension of the legal principles concerning the legitimacy of a transfer disposition, or a failure to exhaust the necessary examination on that point, and it is clear that this error affected the outcome of the judgment. Therefore, the argument pointing out this error is well-founded.
3. Accordingly, the judgment below is reversed, and the case is remanded to the court below for further hearing and determination. This decision is rendered as stated in the Order, with the unanimous consent of the Justices involved.
Justice Kim Hyeong-seon (Presiding Justice), Park Man-ho (Justice in Charge), Park Jun-seo, Lee Yong-hun