[Plaintiffs, Appellants]
[Defendant, Appellee] Litigation successor of Yeongnam Chemical Co., Ltd., Attorney Kim Dong-hwan
[Court Below] Seoul High Court Decision 91Na51575 rendered on March 31, 1992
[Order]
All appeals are dismissed.
The costs of the appeal shall be borne by the Plaintiffs.
[Reasoning]
The grounds of appeal are examined.
According to the reasoning of the judgment below, the court below found, based on the evidence cited therein, the following facts: that the Plaintiffs were dismissed for reasons of restructuring (jeongni haego) on April 30, 1988 while working at Yeongnam Chemical Co., Ltd. (hereinafter referred to as "Yeongnam Chemical"), which was subsequently merged into and absorbed by the Defendant company; that Yeongnam Chemical had originally been an investee company of a government-invested institution, with the non-party Korea Chemical Industry Co., Ltd., a government-invested institution, owning 50 percent of its issued shares, but that pursuant to the Government's fertilizer rationalization plan, the shares of Yeongnam Chemical held by the said non-party company were sold through a public bidding process, as a result of which Dongbu Petrochemical Co., Ltd., a member company of the Dongbu Group, won the bid and took over management control of Yeongnam Chemical around February 22, 1988; that until 1987, the Government had implemented a profit-guarantee policy whereby it caused the National Agricultural Cooperative Federation (Nonghyup) to purchase domestic-use fertilizer produced by Yeongnam Chemical at a price consisting of production cost plus a reasonable profit margin, but that from around the end of December 1987, it decided to implement a policy of privatizing state-run enterprises such as Yeongnam Chemical and having Nonghyup purchase fertilizer at the lowest supply price in accordance with the principle of "one price for one good"; that Yeongnam Chemical, having lower price competitiveness compared to its competitor, the non-party Namhae Chemical Co., Ltd., and foreign companies, suspended its fertilizer supply to Nonghyup from around September 1988 on the ground that its costs were not being recouped, closed its urea, ammonia, and compound fertilizer plants in 1989, and incurred deficits in both 1988 and 1989; that as a result of the loose and expansive organizational operation during the period when Yeongnam Chemical was an investee company of a government-invested institution, personnel expenses accounted for as much as 12.3 percent of total sales in 1987, and were projected to reach 14.3 percent in 1988; that accordingly, around March 1988, in order to enhance management efficiency, Yeongnam Chemical reduced its organizational structure from 12 departments, 29 divisions, and 54 sections to 7 departments, 20 divisions, and 38 sections, and established a policy of preferentially assigning employees deemed necessary to the reorganized departments in consideration of their educational background (major), aptitude, career, age, work performance, and interpersonal relationships, classifying as subject to restructuring those employees for whom there was no suitable post corresponding to their duties and rank and who had problems in ability or interpersonal harmony, and of transferring such employees to a suitable post at an affiliate of the Dongbu Group to which Yeongnam Chemical belonged if such a post existed, and dismissing them if no suitable post existed; that after conducting five rounds of collective bargaining with the labor union, which represented even the Plaintiffs who were not union members, Yeongnam Chemical designated as subject to the dismissal at issue: Plaintiff 2 and Plaintiff 3, whose positions had been eliminated; Plaintiff 1, whose position continued to exist but had been filled by another person; and Plaintiff 4, whose rank had been downgraded, in accordance with the above restructuring criteria, and thereupon carried out the dismissal at issue. Having found these facts, the court below held to the effect that this restructuring dismissal (jeongni haego) was based on an urgent managerial necessity to reduce the loosely operated organizational structure and cut personnel in order to enhance management efficiency; that efforts to avoid dismissal were made prior to carrying out the dismissal at issue; that the persons subject to reduction were selected according to reasonable and fair restructuring criteria; that sincere consultation was held with the labor side prior to the dismissal; and that, considering the grounds and circumstances of the dismissal at issue comprehensively and as a whole, the dismissal at issue is objectively recognized as reasonable and constitutes a valid and legitimate restructuring dismissal.
Upon examination, the requirement of "urgent managerial necessity" to reduce personnel, which is one of the requirements for a restructuring dismissal, is not limited to cases where dismissal is necessary to avoid the bankruptcy of the enterprise; rather, such urgent managerial necessity should be recognized as existing whenever it is objectively found to be reasonable (see this Court's Decision 91Da8647 rendered on December 10, 1991). Under the facts as found by the court below, such managerial necessity is recognized, and therefore the determination of the court below in this regard is justified, and there is no error of misapprehension of the legal principles as alleged in the grounds of appeal.
However, according to the record, the court below's finding of fact that the labor union represented even the Plaintiffs, who were not union members, cannot be deemed correct. Nevertheless, the remaining findings of fact are acceptable, and there is no error of incomplete deliberation regarding the requirements for restructuring dismissal, or of misapprehension of the rules of evidence resulting in mistake of fact, as alleged in the grounds of appeal. Even if Yeongnam Chemical did not conduct sincere consultation with the Plaintiffs, who were not union members, prior to the dismissal at issue, it did reach agreement with the labor union that represented the union members; and in this case, where the remaining requirements for the validity of a restructuring dismissal—namely, that there must be urgent managerial necessity to reduce personnel, that efforts to avoid dismissal must have been made, and that the persons subject to dismissal must be selected according to reasonable and fair restructuring criteria—are satisfied, the restructuring dismissal in this case must be deemed valid when considered as a whole, even though Yeongnam Chemical did not undergo prior consultation with the Plaintiffs. Therefore, the above mistake of fact by the court below does not affect the outcome of the judgment. The argument is without merit.
Therefore, all appeals are dismissed, and the costs of the appeal are to be borne by the Plaintiffs, who are the losing parties. This judgment is rendered as set forth in the Order, with the unanimous concurrence of the Justices involved.
Justice Kim Sang-won (Presiding Justice), Park Woo-dong, Yun Yeong-cheol, Park Man-ho