[Plaintiff (Selected Party), Appellant and Appellee] Plaintiff (Selected Party) 1 and 4 others (Attorneys of Law Firm (LLC) Lee Hyun, Kim Yu-jeong and 6 others, of counsel)
[Defendant, Appellee and Appellant] Hyundai Motor Company (Attorneys of Law Firm (LLC) Jipyong, Lee Gong-hyeon and 5 others, of counsel)
[Judgment Below] Seoul High Court Decision 2015Na31898, 31904 decided July 21, 2017
[Order]
The part of the judgment below against which the Defendant lost is reversed, and this part of the case is remanded to the Seoul High Court. All appeals filed by the Plaintiffs (Selected Parties) are dismissed. The costs of appeal arising from the appeal concerning the portions relating to Selected Party 15 and Selected Party 16 among the Plaintiffs (Selected Parties) shall be borne by the Plaintiffs (Selected Parties).
[Reasoning] The grounds of appeal are examined.
1. Background of this case
According to the reasoning of the judgment below and the record, the following facts may be found.
A. The Defendant enacted rules of employment (hereinafter the "former Rules of Employment") and applied them to all employees. However, as the former Labor Standards Act (amended by Act No. 6974 on September 15, 2003, hereinafter the "former Labor Standards Act"), which shortened statutory working hours and introduced the five-day workweek system, came into force at the Defendant's workplace from July 1, 2004, the Defendant separately enacted Rules of Employment for Executive Staff, applicable only to executive staff at the rank of section chief (gwajang) or above, in line with this change. Unlike the former Rules of Employment, the Rules of Employment for Executive Staff included provisions abolishing the monthly leave system, under which one day of leave had been granted for each month of full attendance, and newly establishing a cap of 25 days on annual leave, for which there had previously been no upper limit on the total number of days recognized.
B. In enacting the Rules of Employment for Executive Staff, the Defendant did not obtain the consent of the Hyundai Motor Company Labor Union (hereinafter "Hyundai Motor Labor Union"), a labor union to which a majority of all employees belonged. However, on August 16, 2004, the Defendant gathered executive staff by regional headquarters and by department and obtained consent forms from 5,958 of the 6,683 total executive staff, or approximately 89%.
C. The Plaintiff (selected party) and the persons selected (hereinafter collectively "Plaintiffs, etc.") were employees who had joined the Defendant and worked at positions of section chief or above. At the first instance, they argued that the portion of the Rules of Employment for Executive Staff relating to annual and monthly leave was invalid, and sought, as restitution of unjust enrichment, an amount equivalent to the annual and monthly leave allowances not paid to them since 2004.
D. The first instance court rendered judgment dismissing the claims of the Plaintiffs, etc., on the ground that, even according to the allegations constituting the cause of action, the Plaintiffs, etc. could directly claim the unpaid annual and monthly leave allowances against the Defendant, and thus no unjust enrichment was established. The Plaintiff (selected party) appealed, and at the appellate court added a claim for payment of the unpaid annual and monthly leave allowances.
2. As to the Defendant's grounds of appeal
A. As to the argument concerning whether the Rules of Employment were unfavorably modified
The court below held that the portion of the Rules of Employment for Executive Staff that, unlike the former Rules of Employment, deleted the provision on paid monthly leave and limited the number of annual leave days to a cap of 25 days, constituted, on its face, an unfavorable modification of the Rules of Employment for the executive staff. It further held that even if the Defendant, in introducing the five-day workweek system, had intended to compensate for the reduced amount of annual and monthly leave allowances of the executive staff through a base salary increase around October 2005, this was a separate measure from the enactment and implementation of the Rules of Employment for Executive Staff, and thus was not a factor to be considered in determining whether the Rules of Employment had been unfavorably modified.
Examining the reasoning of the judgment below in light of the relevant legal principles, there is no error in the lower court's determination, as alleged in the grounds of appeal, of misunderstanding the legal principles concerning the Addenda to the former Labor Standards Act or the unfavorable modification of rules of employment.
B. As to the argument concerning the subject entitled to give consent to the unfavorable modification of the Rules of Employment
The court below held, for the reasons stated in its judgment, that the group of employees entitled to give consent to the portion of the Rules of Employment for Executive Staff relating to annual and monthly leave included not only those employees who were executive staff at the time the Rules of Employment for Executive Staff were enacted, but also general staff, research staff, production staff, and others who had the possibility of being promoted to executive staff in the future.
Examining the reasoning of the judgment below in light of the relevant legal principles, there is no error in the lower court's determination, as alleged in the grounds of appeal, of misunderstanding the legal principles concerning the subject entitled to give consent to unfavorable modification of rules of employment.
C. The validity of rules of employment prepared or modified in violation of the proviso to Article 94(1) of the Labor Standards Act (근로기준법)
1) The statutory provisions and the position taken by prior Supreme Court precedents
Article 94(1) of the current Labor Standards Act provides: "Where there exists, at the relevant business or workplace, a labor union organized by a majority of the employees, the employer shall hear the opinion of that labor union in preparing or modifying rules of employment, or, where no labor union organized by a majority of the employees exists, the opinion of a majority of the employees. Provided, that where the rules of employment are modified unfavorably to the employees, the employer shall obtain their consent." Article 97(1) of the former Labor Standards Act contained the same content.
The Supreme Court has traditionally held that where the preparation or modification of rules of employment strips employees of vested rights or interests and imposes unfavorable working conditions, consent must be obtained by the collective decision-making method of the employees who were subject to the previous working conditions or rules of employment; however, where the preparation or modification of the relevant rules of employment, considering both the necessity therefor and the content thereof, and even taking into account the degree of disadvantage employees would suffer thereby, is recognized as having reasonableness according to social norms (사회통념상 합리성) to the extent that the legal normative character of the relevant provision can be acknowledged, the application thereof cannot be denied merely on the ground that there was no consent by the collective decision-making method of the employees who were subject to the previous working conditions or rules of employment (see Supreme Court Decision 78Da1046 delivered on September 12, 1978; Supreme Court Decision 87Daka2853 delivered on May 10, 1988; Supreme Court Decision 99Da70846 delivered on January 5, 2001; Supreme Court Decision 2001Da16722 delivered on June 11, 2002; Supreme Court Decision 2004Da68953 delivered on June 23, 2005; Supreme Court Decision 2005Du13247 delivered on November 30, 2007; Supreme Court Decision 2007Do3037 delivered on June 11, 2009; and Supreme Court Decision 2012Da43522 delivered on August 13, 2015; hereinafter the "prior precedents").
2) The issue in this part
The issue in this part is whether, even where rules of employment are modified unfavorably to employees—such as the portion of the Rules of Employment for Executive Staff relating to annual and monthly leave—without obtaining the consent by the collective decision-making method of employees required by the proviso to Article 94(1) of the Labor Standards Act, the validity of the preparation or modification of the relevant rules of employment may be recognized on the ground that there is reasonableness according to social norms, that is, whether the prior precedents should be maintained.
3) Determination on the issue
A) Where an employer modifies rules of employment unfavorably to employees without obtaining consent by the employees' collective decision-making method, the validity thereof cannot be recognized merely on the ground that there is reasonableness according to social norms in the preparation or modification of the relevant rules of employment, unless there exist special circumstances indicating that the labor union or employees abused their collective right of consent. The reasons are as follows.
① Article 32(3) of the Constitution provides that "standards of working conditions shall be determined by Act in such a way as to guarantee human dignity," and Article 4 of the Labor Standards Act provides that "working conditions shall be determined by free will of the worker and the employer on an equal footing." Meanwhile, while Article 94(1) of the Labor Standards Act grants the employer authority to prepare or modify rules of employment, its proviso requires that where the rules of employment are modified unfavorably to employees, the employer must obtain the collective consent of the employees. In light of the purport and relationship of the foregoing provisions, the collective right of consent held by employees with respect to unfavorable modification of rules of employment is a procedural right of significant importance in setting a limit on the employer's unilateral authority to modify rules of employment and in realizing the purport of Article 32(3) of the Constitution and the principle of equal determination of working conditions by labor and management set forth in Article 4 of the Labor Standards Act, and cannot be regarded as something that may be substituted by the propriety or reasonableness of the content of the modified rules of employment.
② The Supreme Court had already established the legal principle requiring the collective consent of employees for unfavorable modification of rules of employment even before the former Labor Standards Act, as amended by Act No. 4099 on March 29, 1989 (hereinafter the "1989 Labor Standards Act"), codified the requirement of collective consent (see Supreme Court Decision 77Da355 delivered on July 26, 1977). The Supreme Court held that, because the Labor Standards Act compelled employers to prepare rules of employment and endowed them with legal normative force for the purpose of protecting and strengthening the rights and interests of employees who are substantively unequal in light of the reality of subordinate labor relations, and thereby improving their basic livelihood, consent by the collective decision-making method of the employees who had been subject to the previous rules of employment was required in order to unfavorably modify the content of existing working conditions to employees' disadvantage through modification of the rules of employment. That is, the employees' collective right of consent is derived, even absent explicit statutory provision, from the principle of equal determination of working conditions by labor and management as described above, the fundamental spirit of the Labor Standards Act concerning the protection of employees' rights and interests, and the principle of protecting vested rights. Such collective consent is a requirement for validity of greater importance than a mere formal procedure to be undergone. Furthermore, to hold, as is currently the case where the Labor Standards Act expressly provides for a collective consent procedure, that the collective consent of employees need not be obtained merely because there is reasonableness according to social norms in the content of the rules of employment, is to disregard the essential function of rules of employment and the requirement of procedural legitimacy that must necessarily be secured in the process of unfavorable modification thereof.
③ The Labor Standards Act already opens the possibility of flexible modification of working conditions in that it recognizes the employer's authority to prepare and modify rules of employment, and further, even in the case of unfavorable modification of rules of employment, requires as a condition the consent of a majority of employees by the collective decision-making method, rather than the individual consent of every employee subject thereto. In this way, where there is collective consent of employees, the effect of the modified rules of employment is recognized even as to individual employees who opposed the unfavorable modification, thereby satisfying the requirement for uniform determination of working conditions. Accordingly, there is no need to recognize the validity of an employer's unilateral unfavorable modification of working conditions made without obtaining the collective consent of employees, on the ground of reasonableness according to social norms, in order to achieve uniformity of working conditions. Flexible adjustment of working conditions should be achieved not by approving unilateral modification of rules of employment by the employer, but through collective bargaining or the employer's sincere persuasion and effort to obtain the understanding of employees. Moreover, as discussed below, since there is room to recognize the validity of unfavorable modification of rules of employment where there exist special circumstances indicating that the labor union or employees abused their collective right of consent, it is not the case that unfavorable modification of rules of employment is always impossible merely because there is no collective consent of employees.
④ The Supreme Court has taken the position that where a collective agreement contains a provision requiring the employer to obtain the consent of the labor union in taking personnel action against a union member, personnel action taken by the employer without the consent of the labor union is, in principle, invalid, but is valid where it can be evaluated that the labor union abused its right of consent (see, e.g., Supreme Court Decision 2010Da38007 delivered on June 28, 2012). Although a collective agreement is a norm inferior to statute, the Supreme Court held that personnel action taken in violation of the labor union's right of consent arising from the collective agreement was invalid, while securing concrete justness through the doctrine of abuse of the right of consent in order to flexibly resolve problems that might arise from an excessively rigid interpretation. Since, with respect to unfavorable modification of rules of employment, the collective right of consent of employees is granted by statute, a norm superior to a collective agreement, it is an interpretation consistent with the above Supreme Court precedent concerning the labor union's right of consent under a collective agreement, and consonant with the systemic order of legal norms, to hold that unfavorable modification of rules of employment made without obtaining the collective consent of employees is, in principle, invalid, but that its validity may be recognized only where the labor union or employees have abused their collective right of consent.
⑤ The prior precedents held that where it is recognized that there is reasonableness according to social norms sufficient to acknowledge the legal normative character of the unfavorably modified provision of the rules of employment, the application thereof cannot be denied merely on the ground that there was no consent by the collective decision-making method of the employees who had been subject to the previous working conditions or rules of employment, and that the existence of such reasonableness according to social norms should be determined by comprehensively considering the degree of disadvantage employees would suffer from the modification of the rules of employment, the content and degree of the necessity for modification on the employer's part, the appropriateness of the content of the modified rules of employment, the state of improvement of other related working conditions such as compensatory measures, the course of negotiation with the labor union and the response of the labor union or other employees, and the general domestic situation regarding matters of the same kind. However, the concept of reasonableness according to social norms is itself highly indeterminate, such that it is difficult for the parties to the labor relationship to readily know the degree to which it must be satisfied in order for legal normative character to be acknowledged; moreover, even a court's determination, made by comprehensively considering the factors presented by the Supreme Court as criteria for recognition thereof when the matter becomes contested in an individual case, inevitably has the limitation of being an ex post facto evaluation. As a result, disputes over the validity of modification of rules of employment have continued unabated, and the harm caused to employers and employees alike by the legal instability resulting from the application of rules of employment whose validity has not been settled has likewise been considerable.
⑥ Nonetheless, the interpretation under the prior precedents, in that it recognizes, in certain cases, the lowering of existing working conditions through unilateral preparation or modification of rules of employment by the employer even absent the collective consent of employees, is not only an interpretation contrary to the express wording of the proviso to Article 94(1) of the Labor Standards Act, a mandatory provision, but also amounts to granting the employer authority to unilaterally modify working conditions beyond the scope contemplated by the Labor Standards Act, and thus is contrary to the spirit of the Constitution, the fundamental purport of the Labor Standards Act concerning the protection of employees' rights and interests, and the principle of equal determination of working conditions by labor and management.
B) Accordingly, the prior precedents that recognized the application of rules of employment—unilaterally prepared or modified by the employer without the collective consent of employees so as to modify working conditions unfavorably compared to the existing conditions—where reasonableness according to social norms was recognized in the preparation or modification of the relevant rules of employment, namely, Supreme Court Decision 78Da1046 delivered on September 12, 1978; Supreme Court Decision 87Daka2853 delivered on May 10, 1988; Supreme Court Decision 99Da70846 delivered on January 5, 2001; Supreme Court Decision 2001Da16722 delivered on June 11, 2002; Supreme Court Decision 2004Da68953 delivered on June 23, 2005; Supreme Court Decision 2005Du13247 delivered on November 30, 2007; Supreme Court Decision 2007Do3037 delivered on June 11, 2009; and Supreme Court Decision 2012Da43522 delivered on August 13, 2015, as well as decisions to the same effect, are all hereby overruled to the extent they conflict with the position taken in this judgment.
4) The doctrine of abuse of the collective right of consent
Our Civil Act (민법) declares good faith and the prohibition of abuse of rights to be important principles of civil law, and these serve as general principles pervading the entire legal order, functioning to prevent unjust results that may arise from formalistic and strict application of positive law and to realize concrete justness. Accordingly, the principle of good faith and the principle prohibiting abuse of rights must also apply where a labor union or employees exercise their collective right of consent in the process of unfavorable modification of rules of employment under the Labor Standards Act. Therefore, where there exist special circumstances indicating that the labor union or employees abused their collective right of consent, the unfavorable modification of rules of employment may be found valid even absent such consent. Here, a case where the labor union or employees abused their collective right of consent refers to a case where the necessity to modify the rules of employment is objectively and clearly recognized due to changes in relevant statutes or in the social environment surrounding labor relations, and where, notwithstanding the employer's sincere persuasion and effort to obtain the employees' collective consent, the labor union or employees opposed the modification of the rules of employment without presenting a reasonable basis or reason therefor, or similar circumstances. However, in light of the legislative purport of the proviso to Article 94(1) of the Labor Standards Act, which requires the collective consent of employees where rules of employment are modified unfavorably to them, and the importance of the right of consent as a procedural right, whether the labor union or employees abused their collective right of consent needs to be determined strictly.
Meanwhile, since the application of the principle of good faith or the prohibition of abuse of rights concerns a mandatory rule, the court may determine ex officio whether there has been a violation thereof even absent an assertion by the parties (see Supreme Court Decision 88Daka17181 delivered on September 29, 1989; Supreme Court Decision 94Da42129 delivered on December 22, 1995, etc.), and accordingly, the court may also determine ex officio whether there has been an abuse of the collective right of consent.
5) Determination as to this case
The court below determined the validity of the portion of the Rules of Employment for Executive Staff relating to annual and monthly leave solely on the basis of whether it had reasonableness according to social norms, following the position of the prior precedents, and did not at all determine whether this constituted an abuse of the collective right of consent. The court below should have further examined and determined whether, even if the Defendant did not obtain the consent of the Hyundai Motor Labor Union with respect to the portion of the Rules of Employment for Executive Staff relating to annual and monthly leave, there existed special circumstances in that process amounting to an abuse of the collective right of consent. Nevertheless, the court below, without examining this matter, held that the portion of the Rules of Employment for Executive Staff relating to annual and monthly leave could not be applied to the Plaintiffs, etc., on the ground that there was no reasonableness according to social norms. Therefore, the determination of the court below contains an error affecting the judgment, in that it misunderstood the legal principles concerning unfavorable modification of rules of employment and abuse of the collective right of consent, and thereby failed to conduct the necessary examination.
3. As to the Plaintiffs, etc.'s grounds of appeal
A. As to the argument concerning the validity of rules of employment applicable only to executive staff
The court below determined that, since an employer may prepare separate rules of employment applicable to some of the employees belonging to a workplace, in light of the particularities of working conditions, forms of work, occupational type, etc. of employees belonging to the workplace, the enactment of rules of employment applicable only to executive staff cannot in itself be held invalid.
Examining the reasoning of the judgment below in light of the relevant legal principles, there is no error in the lower court's determination, as alleged in the grounds of appeal, of misunderstanding the legal principles concerning the validity of rules of employment applicable to some groups of employees.
B. As to the argument concerning the application of the collective agreement
The court below determined that the Plaintiffs, etc., who worked at positions of section chief or above, including as production-line chief engineers (gijang), fell under "persons holding positions of section chief or above," i.e., executive staff, who are not recognized as having union membership eligibility under Article 6(1) of the collective agreement concluded between the Defendant and the Hyundai Motor Labor Union, and thus could not be said to be expected to be covered by the collective agreement, and accordingly could not be regarded as employees of the same kind to whom the general binding force of the collective agreement extends.
Examining the reasoning of the judgment below in light of the relevant legal principles, there is no error in the lower court's determination, as alleged in the grounds of appeal, of misunderstanding the legal principles concerning the effect of a collective agreement or of omitting judgment.
C. As to the argument concerning the effect of interruption of the statute of limitations
The court below determined that the effect of interruption of the statute of limitations arising from the filing of the claim for restitution of unjust enrichment does not extend to the claim for unpaid annual and monthly leave allowances, which constitutes a different subject matter of the lawsuit.
Examining the reasoning of the judgment below in light of the relevant legal principles, there is no error in the lower court's determination of misunderstanding the legal principles concerning interruption of the statute of limitations.
D. As to the argument concerning the method of calculating ordinary wages
This ground of appeal was raised for the first time at the appellate (final) stage and cannot constitute a lawful ground of appeal.
4. Conclusion
Accordingly, without determining the Defendant's remaining grounds of appeal, the part of the judgment below against the Defendant is reversed, and this part of the case is remanded to the court below for further examination and determination. The appeals of the Plaintiff (selected party) are all dismissed as being without merit, and the costs of appeal arising from the appeal concerning the portions relating to Selected Person 15 and Selected Person 16 of the Plaintiff (selected party) are to be borne by the Plaintiff (selected party). It is so decided as per the Order. This judgment is rendered with the unanimous agreement of the Justices participating, except for the separate opinion of Justice Cho Jae-yeon, Justice Ahn Cheol-sang, Justice Lee Dong-won, Justice Noh Tae-ak, Justice Cheon Dae-yeop, and Justice Oh Seok-jun, and there are supplementary opinions to the majority opinion by Justice Lee Heung-gu and Justice Oh Kyung-mi, and supplementary opinions to the separate opinion by Justice Cho Jae-yeon, Justice Ahn Cheol-sang, and Justice Noh Tae-ak.
5. Separate opinion of Justice Cho Jae-yeon, Justice Ahn Cheol-sang, Justice Lee Dong-won, Justice Noh Tae-ak, Justice Cheon Dae-yeop, and Justice Oh Seok-jun
A. The majority opinion holds that, where an employer modifies rules of employment unfavorably to employees without obtaining consent by the employees' collective decision-making method, the validity thereof cannot be recognized even if there is reasonableness according to social norms in the preparation or modification of the relevant rules of employment, absent special circumstances indicating that the labor union or employees abused their collective right of consent, and that the prior precedents taking a different position should accordingly be overruled. However, the "doctrine of reasonableness according to social norms" is a doctrine whose validity the Supreme Court has long recognized and applied, and it remains valid both doctrinally and practically at present, and should therefore be maintained as it stands; we cannot agree with the majority opinion, which seeks to overrule it. We set out our reasons in detail below.
1) The significance of the doctrine of reasonableness according to social norms and the background of its establishment
Article 95 of the Labor Standards Act, enacted on May 10, 1953, contained no provision requiring the collective consent of employees for modification of rules of employment, and merely provided that the employer must hear the opinion of the labor union organized by a majority of employees, or, where no such labor union existed, the opinion of a person representing a majority of employees. However, if it were held that no consent of employees whatsoever was required even where rules of employment were modified unfavorably to them, this would run counter to the spirit of the Labor Standards Act as a protective statute, the principle of protecting vested rights, and the purport of Article 3 of the enacted Labor Standards Act, which provided that working conditions should be determined by labor and management on an equal footing and by free will; accordingly, the Supreme Court, in Decision 77Da355 delivered on July 26, 1977, held that the validity of unfavorable modification of rules of employment could be recognized only where there was consent by the collective decision-making method of employees, thereby placing a limitation on the employer's authority to prepare and modify rules of employment. This is a doctrine that, while premised on the fact that, unlike a collective agreement, the authority to prepare and modify rules of employment belongs to the employer, nonetheless places a limitation on that authority so that it cannot be freely modified unfavorably to employees. However, if this doctrine were applied without exception, every unfavorable modification of rules of employment lacking the collective consent of employees would be invalidated regardless of the degree of disadvantage, the circumstances and motive of the modification, or the concrete propriety of its content, and such a result would be contrary to the purport of granting the employer authority to prepare and modify rules of employment, the general sense of social justice, and concrete justness. Accordingly, the Supreme Court presented the doctrine that, even where the collective consent of employees was not obtained for unfavorable modification of rules of employment, such modification is valid if reasonableness according to social norms is recognized, that is, the so-called doctrine of reasonableness according to social norms (see Supreme Court Decision 78Da1046 delivered on September 12, 1978; Supreme Court Decision 88Daka4277 delivered on May 9, 1989, etc.), thereby establishing a limit on the doctrine restricting unfavorable modification of rules of employment.
The 1989 Labor Standards Act legislated the requirement of collective consent for rules of employment in Article 95(1), but this merely codified the existing precedential doctrine described above, rather than creating a new doctrine. Although the above statutory text provided only for the requirement of collective consent and did not simultaneously specify the doctrine of reasonableness according to social norms, this was because it was deemed technically inappropriate, from a legislative standpoint, to specify in statutory text a concept as general and abstract as "reasonableness according to social norms," and it cannot be viewed, nor is there any basis to view, that there was an intention to exclude the doctrine of reasonableness according to social norms. Even after the 1989 amendment of the Labor Standards Act, the Supreme Court continued to apply the doctrine of reasonableness according to social norms as it had before the amendment, and no provision excluding the doctrine of reasonableness according to social norms has been introduced in the course of the frequent amendments to the Labor Standards Act made to date. In other words, it is correct to view that the 1989 Labor Standards Act did not exclude the doctrine of reasonableness according to social norms, but rather fully incorporated the doctrine concerning unfavorable modification of rules of employment as established by precedent, including that doctrine.
2) The basis for requiring collective consent
Where, then, does the fundamental reason lie for the Supreme Court's position that, while requiring the collective consent of employees for unfavorable modification of rules of employment, such modification is nonetheless exceptionally valid absent consent where reasonableness according to social norms is recognized? This can be found in the purport and legal philosophy underlying the requirement of collective consent of employees for unfavorable modification of rules of employment. The authority to prepare and modify rules of employment basically belongs to the employer, and the consent of employees is not a requirement for the formation of rules of employment. Nonetheless, the fundamental purport of the Supreme Court's requirement of collective consent of employees for unfavorable modification lies in preventing abuse of the employer's authority to prepare and modify rules of employment, and in substantively realizing the legal philosophy of the Labor Standards Act by preventing the employer from using its superior position to unilaterally modify rules of employment unfavorably to employees.
However, where the content of the rules of employment which the employer seeks to modify does not run counter to this purport, and reflects, for example, changes in relevant statutes and their purport, or reflects modifications of other working conditions determined by collective agreement, such that the propriety of the content to be modified can be sufficiently accepted, so that reasonableness according to social norms is truly recognized by anyone, there is no reason to restrict the employer's authority to prepare and modify rules of employment in such a case, and such modification cannot be held invalid merely because the collective consent of employees was not obtained.
3) Character as a general principle of law
The Supreme Court has to date applied general legal principles, such as the principle of good faith, the principle of equity, the principle prohibiting abuse of rights, the doctrine of loss of right through delay (실효의 원칙), or reason (조리), beyond the Civil Act and across private law generally, and at times even in the sphere of public law, even absent special statutory provision, and the sphere of labor relations has been no exception (see Supreme Court Decision 91Da30118 delivered on January 21, 1992, applying the doctrine of loss of right through delay in an employment relationship; Supreme Court en banc Decision 2012Da89399 delivered on December 18, 2013, applying the principle of good faith in an ordinary wage case, etc.). Such general principles of law narrow the gap between the normative world and the actual world, and prevent results contrary to the sense of justice generally accepted by members of society, thereby enabling legal norms to function as living law. The doctrine of reasonableness according to social norms is an application, to labor relations, of general principles of law such as the principle of good faith or reason, in order to prevent unreasonable results that could arise from applying without exception the doctrine requiring the collective consent of employees for unfavorable modification of rules of employment. Accordingly, this doctrine's application is not excluded merely because it is not expressly set forth in statutory text, nor is it a doctrine that may be abolished.
4) How the doctrine of reasonableness according to social norms has been applied
We examine the cases in which the Supreme Court has, to date, applied the doctrine of reasonableness according to social norms and held that unfavorable modification of rules of employment was valid notwithstanding the absence of the collective consent of employees. The Supreme Court applied the doctrine of reasonableness according to social norms and held the modification of rules of employment valid in the following cases: a case in which the rules of employment had not previously fixed a mandatory retirement age but newly set a retirement age of 55 (Supreme Court Decision 78Da1046 delivered on September 12, 1978); a case involving a public-interest corporation whose staff were required to maintain a high degree of integrity and honesty, in which a person who received a suspended sentence of a fine of imprisonment or heavier and remained within the period of such suspension was added as a subject of dismissal (Supreme Court Decision 87Daka2853 delivered on May 10, 1988); a case in which, upon the succession of employment relationships arising from a merger and consolidation of a foundation, the retirement age was extended by as much as ten years compared to before the succession and wages were increased, resulting in an overall improvement in working conditions, even though the rate of retirement allowance payment under the retirement allowance provisions after the succession was lower than that before the succession (Supreme Court Decision 99Da70846 delivered on January 5, 2001); a case in which a bank expanded the scope of employees eligible for appointment as branch manager from Grade 1 and 2 staff to include Grade 3 staff, and accordingly applied the guidelines on reassignment to a rear position to a Grade 3 staff member who had served as branch manager and was thereafter assigned to a rear position (Supreme Court Decision 2005Du13247 delivered on November 30, 2007); and a case in which a company operating a subway transportation business, in order to resolve deteriorating finances, revised the subway train operator's duty schedule to extend the average daily operating time by 30 minutes, while increasing wages and improving other working conditions such as the average number of monthly attendance days, holidays, and standby locations (Supreme Court Decision 2007Do3037 delivered on June 11, 2009). Although these cases constituted unfavorable modification of rules of employment, in light of the circumstances and motive of the modification, the content thereof, the degree of disadvantage suffered by employees, and the state of improvement of other working conditions, the propriety of the modified content was clearly recognized as being sufficient for reasonableness according to social norms to be plainly acknowledged, such that it was unnecessary to obtain the collective consent of employees, and it could not be said that the spirit of the Labor Standards Act or the principle of protecting vested rights had been undermined in these cases. Rather, if the unfavorable modification of rules of employment in the above cases were held invalid merely on the ground that there was no collective consent of employees, this would run counter to the general sense of justice and concrete justness. The doctrine of reasonableness according to social norms has served the function of preventing such unjust results and ultimately stabilizing the legal relationship between labor and management.
Analyzing these concrete cases, it is difficult to say, as the majority opinion states, that the concept of the doctrine of reasonableness according to social norms is itself highly indeterminate, or that it grants the employer authority to unilaterally modify working conditions beyond the scope contemplated by the Labor Standards Act. If the majority opinion, while arguing that the doctrine of reasonableness according to social norms should be abolished, fails to present specific instances of its abuse and merely declares in general terms that the doctrine should be abolished, it is difficult not to have deep doubts as to whether it is truly necessary to go so far at the present time. Moreover, the majority opinion overlooks the fact that the courts have, to date, made efforts through the doctrine of reasonableness according to social norms to arrive at substantively valid legal interpretations in concrete cases.
In a workplace where rules of employment have been modified unfavorably without the consent of the group of employees, but where reasonableness according to social norms is recognized, it is likely that in many cases the employees themselves have regarded the modification as proper and have accepted it as a valid norm over a long period without raising any particular objection. However, if the doctrine of reasonableness according to social norms is abolished, such a norm, though proper and long approved within the workplace, cannot escape a finding of invalidity merely because there was no collective consent procedure. Such a result would fundamentally shake labor relations that have been stably formed over a long period, and cannot be said to be beneficial to the establishment of balanced labor relations.
5) Doubts as to the necessity of overruling the precedent
Meanwhile, contrary to what the majority opinion presupposes, the Supreme Court has not indiscriminately applied the doctrine of reasonableness according to social norms so as to readily countenance unfavorable modification of rules of employment. That is, the Supreme Court has held that, where it is clear on the basis of the wording before and after the modification that rules of employment have been modified unfavorably to employees, recognizing reasonableness according to social norms in such modification on the basis of circumstances or situations other than the content of the rules of employment should be strictly and narrowly permitted (Supreme Court Decision 2012Da43522 delivered on August 13, 2015). In this way, the Supreme Court has strictly interpreted and applied the doctrine of reasonableness according to social norms, and through the accumulation of cases over a considerable period, predictability and legal stability in the application of this doctrine have been sufficiently secured in current judicial practice, to the extent that it is now difficult to readily find a case in which the question of abolishing this doctrine would arise.
Can it truly be said, as the majority opinion suggests, that concrete justness can be secured by abolishing the doctrine of reasonableness according to social norms and instead invoking the new doctrine of abuse of the collective right of consent? We think not, for the following reasons.
First, it is unclear to what degree the "objective clarity of the necessity to modify the rules of employment, the employer's sincere persuasion and effort, and the reasonableness of the basis or reason asserted by the employees" — the criteria the majority opinion presents for determining whether there has been an abuse of the right of consent — must be satisfied. Such criteria for determination can only be given concrete shape through the future accumulation of cases. In the end, this would inevitably require borrowing, to a substantial degree, the criteria already presented under the doctrine of reasonableness according to social norms, whose standards for determination have been given concrete shape and whose case-law has been accumulated over a long period; if that is so, it is difficult to understand the reason and necessity for abolishing the doctrine of reasonableness according to social norms and instead utilizing the doctrine of abuse of the collective right of consent.
It is also questionable what practical difference there would be, in terms of outcome, between applying the doctrine of abuse of the collective right of consent and applying the doctrine of reasonableness according to social norms to unfavorable modification of rules of employment. In light of the fact that the collective right of consent of employees with respect to unfavorable modification of rules of employment is a right recognized to the labor union or employees, such that the question of abuse of that right must be strictly scrutinized, and the fact that if refusal to consent constitutes an abuse of the right of consent and is thus rendered invalid, this would in effect amount to recognizing a duty to consent, it does not appear that utilizing the doctrine of abuse of the right of consent presented by the majority opinion is consonant with the purport of the Labor Standards Act's requirement of the collective consent of employees. Furthermore, the doctrine of abuse of the collective right of consent presented by the majority opinion can itself also serve as one criterion, and can be a factor for consideration in actual cases, under the doctrine of reasonableness according to social norms as well.
As described above, the doctrine of reasonableness according to social norms is a precedential doctrine whose validity has long been recognized, has influenced the manner in which rules of employment are modified in the field of labor relations, has secured a state of established reliance, and is a doctrine that has not been excluded even through the frequent amendments made to the Labor Standards Act. A change of precedent is not simply a matter of choosing between legal theories, but must be determined by taking into account various factors, including the circumstances of the times, the general perception of society, and the actual effectiveness of the existing precedential norm. Where can we find the necessity and justification for abolishing the doctrine of reasonableness according to social norms, which has become firmly established in practice and in which general societal reliance has been built, at the present time?
B. Determination as to this case
1) The court below held that the portion of the Rules of Employment for Executive Staff relating to annual and monthly leave was not a modification of rules of employment having reasonableness according to social norms, citing the following circumstances.
A) Saturday closure was implemented in accordance with the application of the minimum standards under the former Labor Standards Act, and thus is not a factor to be considered in determining whether the rules of employment relating to annual and monthly leave were unfavorably modified.
B) Even if the Defendant intended to compensate for the reduced amount of annual and monthly leave allowances of executive staff through a base salary increase around October 2005, this was a separate measure taken about one year and three months after the enactment and implementation of the Rules of Employment for Executive Staff, and thus is not a factor to be considered in determining whether the rules of employment were unfavorably modified. Moreover, the reduction in annual and monthly leave allowances, which will increase each year as years of service increase, cannot be regarded as compensated for by a one-time wage increase. The disadvantage to executive staff of a reduced opportunity for rest resulting from the abolition or reduction of annual and monthly leave itself is also not entirely compensated for by monetary compensation.
C) Even though the former Labor Standards Act abolished paid monthly leave and set a cap of 25 days on the number of annual leave days, since the working conditions set forth in the Labor Standards Act constitute minimum standards, the provisions on annual and monthly leave under the former Rules of Employment remain valid as they were.
D) The Defendant continued to apply the former Rules of Employment as they were to employees other than executive staff.
E) In light of the amount of the annual and monthly leave allowances reduced under the Rules of Employment for Executive Staff, it cannot be said that the degree of disadvantage to the executive staff was small.
2) However, the above determination of the court below is difficult to accept, for the following reasons.
A) The former Labor Standards Act, in introducing the so-called five-day workweek system that shortened statutory working hours from 44 to 40 hours per week, abolished paid monthly leave in its place, newly established a cap of 25 days on the number of annual leave days, introduced a system for encouraging the use of annual leave, and thereby comprehensively overhauled the leave system. This amendment was made for the purpose of harmoniously promoting both the improvement of employees' quality of life and the strengthening of enterprise competitiveness through the shortening of statutory working hours and the improvement of the leave system. Article 4(2) of the Addenda to the former Labor Standards Act also imposed an obligation on employees, labor unions, and employers to ensure that wage preservation measures and the amended matters be reflected as soon as possible in collective agreements, rules of employment, etc. The fact that the Addenda to the former Labor Standards Act directly imposed on employers, employees, and labor unions the obligation to amend rules of employment is a circumstance that must be fully considered in determining whether there is reasonableness according to social norms in rules of employment modified pursuant to that obligation.
B) In accordance with the purport of the amendment to the former Labor Standards Act, the Defendant shortened the prescribed working hours under the former Rules of Employment from the existing 44 hours per week to 40 hours per week. The Defendant also designated Saturdays as paid holidays, thereby increasing the number of paid holidays, including the weekly holiday, from the previous 52 days per year to 104 days per year; this was not a matter mandated under the Labor Standards Act, but was a measure introduced to guarantee employees' right to rest, and thereby the Defendant's employees, including executive staff, were guaranteed an additional 52 days of paid holiday per year.
C) The Defendant thereafter enacted the Rules of Employment for Executive Staff reflecting the content of the leave system prescribed under the former Labor Standards Act. The portion of the Rules of Employment for Executive Staff relating to annual and monthly leave conforms to the purport of the amendment to the former Labor Standards Act, and the appropriateness of its content is thus recognized.
D) The Defendant calculated the amount equivalent to the annual and monthly leave allowances of the executive staff that would be reduced under the Rules of Employment for Executive Staff, by rank (department head, deputy department head, section chief), based on the difference in the number of leave days before and after the amendment of the rules of employment, and publicly announced that it would compensate for that amount through the 2005 salary adjustment in accordance with that calculated figure. The Defendant actually implemented a salary adjustment around October 2005 applicable only to executive staff, increasing their base salary, and paid the increased amount retroactively from January 2005. The disadvantage of a reduced opportunity for rest for executive staff due to the reduction in the number of usable annual and monthly leave days can be offset by the implementation of the five-day workweek system and the measure designating Saturdays as paid holidays. Meanwhile, since the right to claim unused annual leave allowance arises upon the expiration of the year in which the annual leave was to be used, and the right to claim unused monthly leave allowance arises only when the monthly leave has not been used for one year, the Defendant's retroactive increase of base salary to January 2005 may constitute a substantial compensatory measure for the reduced number of annual and monthly leave days resulting from the implementation of the Rules of Employment for Executive Staff from July 1, 2004.
[Reasoning] (continued)
마) As described above, the fact that Defendant shortened the prescribed working hours while designating Saturdays as paid holidays and raising the base pay of executive staff members for the year 2005 constitutes, together with the provisions of the Rules of Employment for Executive Staff Members relating to annual and monthly leave, measures by which Defendant adjusted the working conditions of executive staff members in accordance with the purpose of the amendment of the former Labor Standards Act (근로기준법). Accordingly, these matters constitute improvements in working conditions that must be considered in determining whether the provisions of the Rules of Employment for Executive Staff Members relating to annual and monthly leave constitute an amendment of the rules of employment that has reasonableness under social norms.
바) In addition, this series of changes in working conditions, while adjusting the leave system in accordance with the reduction of working hours, ensured that the existing wage level of executive staff members would not decline, through an increase in paid holidays and a raise in base pay, thereby guaranteeing employees' substantive right to rest. Ultimately, both labor and management could enjoy the benefits arising from the implementation of the new system.
사) It appears that the Hyundai Motor Company Labor Union opposed the enactment of the Rules of Employment for Executive Staff Members; however, the overwhelming majority of executive staff members who became directly subject to the Rules of Employment for Executive Staff Members submitted written consent to its enactment.
아) At the time, the Ministry of Labor also indicated, in its implementation guidelines for the former Labor Standards Act, that reasonably adjusting leave in the course of shortening working hours under the rules of employment, in accordance with the enforcement of the former Labor Standards Act, was difficult to regard as a detrimental amendment of the rules of employment.
자) Considering that, as described above, in a situation where Defendant was obligated to amend its rules of employment pursuant to Article 4(2) of the Addenda to the former Labor Standards Act introducing the five-day workweek system, Defendant doubled the number of paid holidays while adjusting the number of days of annual and monthly leave within a reasonable range and compensated, through salary, for the annual and monthly leave allowance that would be reduced; and that these provisions have been recognized as effective norms for approximately ten years, up until August 13, 2014, when Plaintiff and others filed the instant lawsuit, it can be clearly recognized that the provisions on annual and monthly leave in the Rules of Employment for Executive Staff Members have reasonableness under social norms to a degree sufficient to acknowledge their legal normative force.
3) Nevertheless, the court below, without sufficiently examining these matters with respect to the provisions on annual and monthly leave in the Rules of Employment for Executive Staff Members, determined that they lacked reasonableness under social norms and therefore could not be applied to Plaintiff and others. This determination by the court below contains an error that misapprehends the legal doctrine concerning reasonableness under social norms in relation to the detrimental amendment of rules of employment, and this error affected the judgment. Defendant's ground of appeal pointing out this error is well-founded.
For the reasons stated above, I reach the same conclusion as the majority opinion in that the portion of the judgment below against Defendant should be reversed and remanded; however, I cannot agree with the majority opinion's position that the doctrine of reasonableness under social norms should be abolished, and I therefore state this separate opinion.
6. Supplementary Opinion of Justices Lee Heung-gu and Oh Kyung-mi Concurring with the Majority Opinion
A. The Significance of Employees' Right of Consent in the Procedure for Amending Rules of Employment
Employees' collective right of consent regarding detrimental amendments to rules of employment is a procedural right of employees expressly guaranteed by statute on the basis of the Constitution. For employees, the workplace is the foundation of their lives, and the working conditions set forth in the rules of employment constitute its framework. The purpose of the Constitution and the Labor Standards Act (근로기준법) in guaranteeing employees' procedural rights concerning rules of employment lies in realizing the principle of equal determination of working conditions by labor and management, in recognition of the fact that employees' independent participation in the process of establishing and changing working conditions is a requirement for guaranteeing human dignity and autonomy. The most fundamental problem with the previous precedent doctrine is that it hollows out this important procedural right of employees on the ground of the resultant reasonableness of the amended content. Procedural legitimacy and substantive reasonableness must be distinguished, and the infringement of a procedural right cannot be justified merely because the content is reasonable. The basis on which a detrimental amendment of rules of employment is justified lies in the fact that employees, through an autonomous and independent judgment, accepted the unfavorable working conditions through the consent procedure—not in the reasonableness of the content. The previous precedent doctrine, which recognizes the validity of otherwise invalid rules of employment on the ground of reasonableness under social norms, results in employees remaining objects of protection rather than being recognized as subjects of the procedural process by which their own working conditions are determined.
B. The Issue of Securing Predictability and Legal Stability
The separate opinion states that, through the accumulation of case examples over a considerable period concerning what constitutes reasonableness under social norms, the previous precedent doctrine has sufficiently secured predictability and legal stability and has become established as a norm that has earned general societal trust, whereas the standard for abuse of the collective right of consent under the majority opinion has unclear specific criteria for judgment. This cannot be accepted, for the following reasons.
The previous precedent doctrine, which recognizes the validity of otherwise invalid rules of employment on the ground of reasonableness under social norms, is determined by considering a wide range of factors, from the content of the rules of employment and the necessity for the amendment to the circumstances of negotiation with the employee group and even the general domestic situation regarding matters of the same kind; therefore, it cannot be said to have high predictability. The very fact that, as in this case, lawsuits are continually being filed by employees asserting the invalidity of an employer's detrimental amendment of rules of employment made without obtaining the collective consent of employees demonstrates that the doctrine of reasonableness under social norms has still not become firmly established in social reality and has problems in terms of predictability and legal stability. Moreover, the fact that labor law academia and others have long criticized the previous precedent doctrine—which recognizes the validity of otherwise invalid rules of employment by invoking reasonableness under social norms—for reasons similar to those of the majority opinion, also makes it difficult to regard the previous precedent doctrine as a norm that has earned general societal trust.
The standard proposed by the majority opinion—whether there has been an abuse of the collective right of consent—is, like the standard of whether there is reasonableness under social norms under the previous precedent doctrine, an indeterminate concept requiring a normative judgment based on a comprehensive consideration of various circumstances; however, this is not an entirely new doctrine but rather the application, to the area of detrimental amendments of rules of employment between employer and employees, of the principle prohibiting abuse of rights, which is a general principle running through the entire legal order beyond civil law. The Supreme Court has, over a long period, presented standards for determining whether there has been an abuse of rights in various cases, and by applying these standards to evaluate the legitimacy of an employee group's refusal to consent and thereby determine whether there has been an abuse of the collective right of consent, sufficient predictability and legal stability can be secured.
C. Impact on Labor-Management Relations Concerning the Amendment of Rules of Employment
By declaring the doctrine that if an employer detrimentally amends rules of employment without the collective consent of employees, this constitutes, in principle, a violation of the proviso to Article 94(1) of the Labor Standards Act, a mandatory provision, and is therefore invalid, the majority opinion provides employers with an incentive to sincerely persuade and make efforts to obtain employees' collective consent when amending rules of employment, thereby contributing to the establishment of desirable labor-management relations. It is more helpful in reducing the costs and instability borne by the parties and society as a whole for an employer to invest more time and effort in the process of drafting or amending rules of employment to pursue a peaceful resolution through employees' collective consent, than to neglect persuasion and effort at the outset and instead go through conflict and legal disputes after the fact. It is difficult to deny that the previous precedent doctrine has, to some extent, increased the tendency of employers seeking to detrimentally amend rules of employment to rely on the reasonableness of the amended content in order to avoid the trouble and expense of the procedure for obtaining employees' collective consent, resulting, as a side effect, in disputes between labor and management. There are not a few cases in which, even though the degree of reasonableness under social norms of a detrimental amendment to rules of employment would make it more likely that employees' collective consent could be obtained in proportion to that degree, the employer, citing the necessity of the amendment or the validity of its content, unilaterally amended the rules of employment without going through the consent procedure at all, thereby causing disputes. The doctrine of abuse of the collective right of consent differs from the previous precedent doctrine in that it makes it a minimum requirement for validity that the employer listen to employees' opinions and make efforts to obtain their collective consent when detrimentally amending rules of employment. Another difference is that, because the scope within which a detrimental amendment of rules of employment made without obtaining employees' collective consent is recognized as valid is narrowed to the area of abuse of the right of consent, the predictability of the determination of validity or invalidity is increased. The separate opinion states that it is difficult to see what practical difference there is between the previous precedent doctrine, which recognizes the validity of otherwise invalid rules of employment on the ground of reasonableness under social norms, and the doctrine of abuse of the collective right of consent; however, this is difficult to accept for the reasons stated above.
D. The Necessity of Further Deliberation Following the Declaration of the New Doctrine in This Case
The majority opinion changes the previous precedent doctrine, which recognizes the validity of otherwise invalid rules of employment on the ground of reasonableness under social norms with respect to detrimental amendments of rules of employment, and adopts the doctrine concerning abuse of the collective right of consent. This is a doctrine newly presented in this en banc judgment, and since no argument or deliberation on this issue has taken place between the parties at the fact-finding court level, it is desirable for the Supreme Court, as a court of legal review, to substantively guarantee the parties' right to trial by giving them an opportunity to argue this point fully again at the fact-finding court level, rather than making a direct determination itself. The criticism that the majority opinion did not itself directly determine whether there was an abuse of the collective right of consent by comprehensively considering the evidence submitted and the entire import of the pleadings is, for this reason, not well-founded.
The foregoing sets forth the supplementary opinion concurring with the majority opinion.
7. Supplementary Opinion of Justices Cho Jae-yeon, Ahn Cheol-sang, and Noh Tae-ak Concurring with the Separate Opinion
A. Methods of Statutory Interpretation
1) Law must be interpreted so as to have objective validity, and consistency must be maintained as much as possible so that legal stability is not impaired. Since positive law is inevitably enacted with universal and typical cases in mind, the law must be interpreted and applied so as to reach the most valid resolution appropriate to the specific facts of the various cases that arise in social reality. In short, the goal of statutory interpretation must ultimately lie in finding concrete validity within the scope that does not impair legal stability (see Supreme Court en banc Decision 2011Da112391, decided June 21, 2018, and others). To this end, it is necessary to engage in systematic and logical interpretation, based on the text used in the statute, that takes into account the legislative purpose and objective and the history of enactment and amendment; and in order to realize the legislative purpose, even where not expressly stated in the text of the law, the scope of application of the relevant provision may be reasonably narrowed, limited, or expanded to the extent necessary in light of its purpose or nature.
2) The Supreme Court has consistently engaged in such interpretation.
With respect to the provision in Article 55(1)(6) of the Criminal Act (형법) that "when mitigating a fine, it shall be reduced to one-half of the maximum amount (다액)," the Supreme Court interpreted "maximum amount" as "amount," holding that both the upper and lower limits are reduced by one-half (see Supreme Court en banc Decision 78Do246, decided April 25, 1978); and with respect to Article 75(6) of the Bills of Exchange and Promissory Notes Act (어음법), which requires the place of issuance to be stated on a bill, the Supreme Court held that where it is clear from the content stated on the face of the bill that the bill was issued to have effect domestically, the absence of a statement of the place of issuance does not render the bill invalid (see Supreme Court en banc Decision 95Da36466, decided April 23, 1998).
Also in legal issues governing labor-management relations, the Supreme Court interpreted the "40 hours of standard weekly working hours" under Article 50(1) and the "12 hours of weekly extended working hours" under Article 53(1) of the former Labor Standards Act (as amended by Act No. 15513, before its amendment on March 20, 2018) as not including holiday work hours, and held that additional wages for holiday work and additional wages for extended work cannot be paid in duplication (see Supreme Court en banc Decision 2011Da112391, decided June 21, 2018).
3) The detrimental amendment of rules of employment provided for in the proviso to Article 94(1) of the Labor Standards Act must also be interpreted in the same manner. That is, a detrimental amendment of rules of employment should be interpreted not to mean any and all unfavorable amendments, but to mean an unfavorable amendment that is not reasonable under social norms, and the point that an amendment is reasonable under social norms should be interpreted as a matter that the employer seeking to amend the rules of employment must prove. We supplement the reasons for this as follows.
B. Judicial Practice in Applying the Doctrine of Reasonableness under Social Norms
The Supreme Court has, over time, established various standards for determining reasonableness under social norms, and has applied this doctrine, under strict interpretation, in a limited manner, primarily in the area of personnel regulations or disciplinary rules rather than in the area of working conditions relating to wages, severance pay, and the like.
1) After the Supreme Court first declared the doctrine of reasonableness under social norms in its Decision 78Da1046, decided September 12, 1978, it presented a standard for judgment in Decision 87Daka2853, decided May 10, 1988, holding that reasonableness under social norms should be determined by comprehensively considering "the purpose and circumstances of the amendment of the rules of employment, the nature of the business of the relevant enterprise, and the overall structure of each provision of the rules of employment." Then, in Decision 99Da70846, decided January 5, 2001, the Court further specified and systematized this by establishing as standards for judgment "the degree of disadvantage suffered by employees, the content and degree of the employer's need for the amendment, the appropriateness of the content of the amendment, the state of improvement of other working conditions including compensatory measures, the circumstances of negotiation with the labor union and others, the response of the labor union or other employees, and the general domestic situation regarding matters of the same kind." Thereafter, in Decision 2012Da43522, decided August 13, 2015, the Court added "the possibility of employees enjoying the increase in the employer's profits resulting from the amendment of the rules of employment," thereby solidifying the standards for judging reasonableness under social norms in a manner that ensures both legal stability and concrete validity.
2) In the course of thus specifically establishing standards for judging reasonableness under social norms, the Supreme Court, in Decision 2005Da21494, decided November 10, 2005, set the point in time for judging reasonableness under social norms as the time of the amendment of the rules of employment, and in Decision 2009Da32362, decided January 28, 2010, held that the doctrine of reasonableness under social norms must be interpreted restrictively and strictly. Furthermore, as also mentioned above in the separate opinion, in Decision 2012Da43522, decided August 13, 2015, the Court further emphasized the principle of strict interpretation by holding that finding reasonableness under social norms on the basis of circumstances or situations other than the content of the rules of employment itself must be interpreted and applied restrictively and strictly.
3) Through these systematized standards of judgment, the Supreme Court has restrictively and strictly examined whether there is reasonableness under social norms, thereby establishing the doctrine of reasonableness under social norms in a direction that does not infringe upon employees' interests. Since declaring the doctrine of reasonableness under social norms in 1978, over the past 45 years the Supreme Court has denied its existence in the vast majority of cases in which reasonableness under social norms was at issue, and even where it recognized such reasonableness, it did so only in an extremely small number of cases concerning amendments to compensation-related working conditions such as wages or severance pay—which have a more direct impact on employees—applying an even more restrictive and strict standard, while recognizing reasonableness under social norms primarily in the area of personnel regulations or disciplinary rules such as discipline.
C. There Is No Basis for Finding a Need to Change the Precedent Doctrine Concerning Reasonableness under Social Norms
1) A precedent is a Supreme Court determination that provides a definitive interpretation of the statutes applicable to the facts of a case, serving as guidance for future adjudication, and the citizens who are subject to legal norms also use precedent as a guide for their decision-making and conduct. Precedents must therefore be changed with caution. This holds true even though the possibility of changing precedent is institutionally permitted and citizens are expected to accept the resulting changes in legal relationships. Only when changes to precedent are made cautiously and in a limited manner can legal stability be secured and citizens be able to use precedent as a guide for their decision-making and conduct, thereby giving precedent genuine normative force. Moreover, where precedent has been established in a certain direction over a long period with respect to a particular issue, even greater caution must be exercised in changing it. In order to change an established precedent, there must be clear circumstances showing that the previous view has, due to changes in the times and circumstances, come to significantly conflict with notions of justice or has come to deviate remarkably from the purpose of the relevant statute, such that changing it has a value clearly superior to maintaining it, to a degree that justifies sacrificing legal stability as a result. It is not appropriate, and would seriously undermine legal stability, to change an established precedent merely because a new legal view appears somewhat better or more reasonable. However, even upon careful examination of the grounds presented in the majority opinion in this case, no legitimate circumstances can be found that would warrant abolishing, at this point in time, the doctrine of reasonableness under social norms that has been established over the past 45 years.
2) The doctrine of reasonableness under social norms established by the Supreme Court has been accepted, in judicial practice as well as in the legislative and administrative spheres, and even among the parties to labor-management relations, as a guideline with firm normative force.
A) Since Decision 2012Da43522, decided August 13, 2015, it is difficult to find a judgment in which, with respect to a determination by a fact-finding court concerning the validity of a detrimentally amended rules of employment, the Supreme Court squarely determined whether the amended rules of employment had reasonableness under social norms by specifically applying the doctrine of reasonableness under social norms. This means that the standards for judgment and the strictness of review under the doctrine of reasonableness under social norms, as established over time, have become clear enough in judicial practice that the Supreme Court, as a court of legal review, need not intervene, thereby securing predictability and legal stability.
B) In 1989, the National Assembly amended the Labor Standards Act by adopting the Supreme Court's previous doctrine concerning the detrimental amendment of rules of employment. Thereafter, while the Supreme Court did not abolish the doctrine of reasonableness under social norms but rather maintained, developed, and firmly established this doctrine for approximately 30 years even after the statutory amendment, the National Assembly did not amend the relevant statute in this regard. This stands in contrast to the case in which, when the Supreme Court determined, with respect to the meaning of "public official" (including a person deemed a public official pursuant to statute) under Article 111 of the former Attorney-at-Law Act (변호사법) (before its amendment by Act No. 8321 on March 29, 2007), that this should be limited to cases where a specific statute deems a person a public official specifically in relation to the application of Article 111 of the Attorney-at-Law Act, and should exclude cases of being deemed a public official in relation to the application of Articles 129 through 132 of the Criminal Act (Supreme Court en banc Decision 2006Do4549, decided November 16, 2006), the National Assembly then amended Article 111 of the Attorney-at-Law Act by Act No. 8321 on March 29, 2007, to include cases of being deemed a public official in relation to the application of Articles 129 through 132 of the Criminal Act. That is, in requiring, through the 1989 amendment of the Labor Standards Act, that a detrimental amendment of rules of employment be subject to employees' collective consent, the National Assembly did not intend that the validity of the amendment of rules of employment should be denied outright, even where there was reasonableness under social norms, merely because there was no collective consent of employees; and it is appropriate to view that this legislative purpose was faithfully realized through the doctrine of reasonableness under social norms subsequently established by the Supreme Court as described above.
C) In this case, the direct impetus for Defendant's amendment of its rules of employment was the amendment of the Labor Standards Act in 2003. That is, through the 2003 amendment, the Labor Standards Act shortened statutory working hours from 44 hours to 40 hours per week, introducing the so-called five-day workweek system, and in connection therewith reorganized the leave system by abolishing paid monthly leave and newly establishing an upper limit of 25 days for annual leave.
Immediately after this amendment of the Labor Standards Act, the Ministry of Labor prepared and announced "Implementation Guidelines for the Amended Labor Standards Act" in December 2003. This included the statement: "Since the Addenda to the amended Act require rules of employment to be amended in accordance with the purpose of the amended Act, and since the amended Act as a whole reflects a balanced consideration of the positions of labor and management, amending the rules of employment in accordance with the amended Act has reasonableness under social norms, and the collective consent of employees is not required for the amendment of the rules of employment." This shows that the competent ministry for labor-management relations also treated the doctrine of reasonableness under social norms, as established by the Supreme Court, as a guideline for enforcing the law.
In order to reflect the purpose and content of this amendment of the Labor Standards Act, Defendant, in July 2004, likewise amended its rules of employment to reduce prescribed working hours from 44 to 40 hours per week, abolish paid monthly leave, and limit annual leave to 25 days. At the same time, Defendant designated Saturdays as paid holidays, thereby additionally guaranteeing 52 days of paid holidays per year, offsetting the reduction in the number of days of annual and monthly leave, and compensated for the amount equivalent to the reduced annual and monthly leave allowance through salary adjustment. These provisions have been recognized as effective norms for approximately ten years, until the instant lawsuit was filed in August 2014. Furthermore, in judicial practice, unlike lawsuits concerning ordinary wages and the like, there have been relatively few legal challenges concerning the detrimental amendment of rules of employment. This means that, in the field of labor-management relations as well, the doctrine of reasonableness under social norms has already become established as a norm governing labor-management relations.
3) The majority opinion abolishes the doctrine of reasonableness under social norms and introduces the doctrine of abuse of the collective right of consent, holding that where there are special circumstances suggesting abuse of the collective right of consent, the amendment of rules of employment is valid even without the collective consent of employees. However, there are serious doubts as to the validity of this new doctrine and the effectiveness of its introduction.
A) It is not easy to secure predictability or legal stability.
The majority opinion states that, in order to prevent unjust results and realize concrete validity through the doctrine of abuse of the collective right of consent, the standards for judgment should include "the objective clarity of the necessity for amending the rules of employment, the employer's sincere persuasion and efforts to obtain collective consent, and the reasonableness of the grounds or reasons presented by the employees in opposing the amendment."
However, this is not, in substance, different from "the content and degree of the employer's need for the amendment, and the circumstances of negotiation with the labor union and others and the response of the labor union or other employees," which are used as standards of judgment under the doctrine of reasonableness under social norms. As for the intensity of review, the majority opinion also holds that whether there has been an abuse of the collective right of consent must be strictly determined, requiring the same level as that required under the doctrine of reasonableness under social norms, which calls for restrictive and strict interpretation and application. Indeed, as noted above, the doctrine of reasonableness under social norms ensures concrete validity by considering, in addition to the above standards, "the degree of disadvantage suffered by employees, the appropriateness of the content of the amendment, the state of improvement of other working conditions including compensatory measures, the general domestic situation regarding matters of the same kind, and the possibility of employees enjoying the increase in the employer's profits resulting from the amendment of the rules of employment."
Yet the majority opinion offers no further explanation as to whether these three standards are the same as, or different from, the standards under the doctrine of reasonableness under social norms, and if different, how they differ, and whether review should focus solely on these three standards with the remaining factors not being separately considered. As a result, when the validity of an amended rules of employment is contested in future judicial practice and in the field of labor-management relations, it will be unclear specifically how review under the doctrine of abuse of the collective right of consent should differ from that under the existing doctrine of reasonableness under social norms and how the conclusion would differ, potentially causing confusion.
B) The doctrine of abuse of the collective right of consent proposed by the majority opinion is also expected to have difficulty producing results with concrete validity.
With respect to abuse of rights, the Supreme Court has consistently held that, subjectively, the purpose of exercising the right must be solely to cause suffering or damage to the other party, with no benefit whatsoever to the person exercising the right, and objectively, the exercise of the right must be found to violate public order, recognizing abuse of rights only in exceptional cases and very restrictively (see Supreme Court Decision 2009Da58173, decided February 25, 2010, and others). Consider a case in which abuse of rights was at issue in labor-management relations. Where a collective agreement provided that disciplinary action against a labor union member employee required agreement with the labor union, and the union chairman, having conducted an illegal demonstration, was sentenced to a suspended prison term and was again detained and sentenced to one year's imprisonment for a similar cause, the employer commenced disciplinary proceedings without the union's agreement, urged the union to select and have a disciplinary committee member attend, and when the union did not respond, decided on disciplinary dismissal with only the employer's disciplinary committee members present. In this case, the Supreme Court did not recognize an abuse of the union's right of prior consent and held the dismissal invalid (see Supreme Court Decision 93Da50017, decided September 13, 1994). This is one example showing how strict the Supreme Court is in recognizing abuse of rights. Therefore, if the majority opinion's approach of adopting the doctrine of abuse of the collective right of consent as a new standard for determining the validity of a detrimental amendment of rules of employment is followed, even amendments of rules of employment that are reasonable under social norms would, in effect, become difficult to make.
Where there is a need to reasonably amend rules of employment in response to changes in the socioeconomic environment or perceptions, and in accordance with changes in the overall legal order, denying the validity of such an amendment merely because there is no collective consent of employees, despite such need, could lead to an unjust result that significantly conflicts with concrete validity. For example, with respect to the issues of workplace bullying or workplace sexual harassment, which have recently become serious social problems, if an employer reorganizes its disciplinary system and amends its rules of employment to add disciplinary grounds and strengthen disciplinary sanctions within a reasonable scope, it would not be appropriate to deny the validity of such an amendment merely because employees' collective consent was not obtained; rather, doing so could leave a minority of employees who ought to be protected exposed to potential harm, which would be contrary to justice.
This problem may also arise where the interests at stake in an amended rules of employment differ among employees. Even in this very case, the amended rules of employment directly apply only to executive staff members, while the remaining employees only have a possibility of future application; yet if the small number of employees (executive staff members) directly subject to the amended rules of employment consented to the amendment after considering the compensatory measures offered by the employer, but the overall employee group opposed it, denying the validity of the amendment on that basis could be said to infringe upon the interests of the employees who are directly subject to the amended rules of employment. This would also run counter to the original purpose of requiring employees' consent to a detrimental amendment of rules of employment.
4) As described above, the Supreme Court has, over a long period, specified, systematized, and developed the standards for judging reasonableness under social norms, and by establishing the point in time and intensity of review, has ensured both the substantive protection of employees' interests and concrete validity, while this doctrine has come to be recognized as having firm normative force. Nevertheless, there is no valid reason to abolish this established doctrine and newly introduce the doctrine of abuse of the collective right of consent, whose standards are unclear, making it difficult to secure legal stability and difficult to guarantee concrete validity, thereby sacrificing both legal stability and concrete validity.
D. Finally, We Also Cannot Agree with the Majority Opinion's Approach to Disposing of the Appeal
The majority opinion holds that the judgment below should be reversed on the ground that the court below failed to examine and determine whether there was an abuse of the collective right of consent.
Even where there was no argument or determination concerning abuse of rights at the fact-finding court level, in order to reverse the judgment below at the appellate review level on the ground of insufficient deliberation concerning abuse of rights, such insufficient deliberation must be shown to have affected the judgment such that reversing the judgment below would serve a practical purpose. Otherwise, since the principle prohibiting abuse of rights, being a mandatory provision and a general clause, applies throughout the entire sphere of private law, it would follow that a judgment below containing no determination on this point could always be reversed on the ground of insufficient deliberation concerning abuse of rights. If, after remand, the court below, upon deliberation, determines that there was no abuse of rights and thus maintains the conclusion reached by the court below before remand, this would, as a result, mean that the Supreme Court caused the fact-finding court to conduct futile deliberation. For this reason, when the issue of violation of the principle of good faith or abuse of rights has arisen at the appellate review level, the Supreme Court has, to some extent, considered the substantive circumstances and, only after concluding that a violation of the principle of good faith or an abuse of rights could be found, reversed the judgment below on that basis (see Supreme Court Decision 2001Da74322, decided October 10, 2003; Supreme Court Decision 2013Da88829, decided March 20, 2015); it is difficult to find a case in which the judgment below was reversed solely on the ground of insufficient deliberation concerning the principle of good faith or abuse of rights, without any determination thereon. This is also why Article 423 of the Civil Procedure Act (민사소송법) provides that an appeal may be filed only where the ground of appeal is a violation of the Constitution or other statutes that has affected the judgment.
The proper approach for the appellate review court is: if the Supreme Court, based on the fact-finding court's deliberative materials, determines that an abuse of rights could be found, it should state such circumstances in its judgment and reverse the judgment below; and if not, since there is no illegality affecting the judgment, it should dismiss the appeal. Nevertheless, reversing the judgment below without any determination as to whether there was an abuse of the collective right of consent cannot escape the criticism that, disregarding the Supreme Court's essential function of finally resolving disputes, the judgment below was reversed for the purpose of making a pronouncement to change precedent.
The foregoing sets forth the supplementary opinion concurring with the separate opinion.
[Appendix] List of Selected Parties: Omitted
Chief Justice Kim Myeong-su (Presiding Justice), Justice Cho Jae-yeon, Justice Park Jeong-hwa, Justice Ahn Cheol-sang, Justice Min Yu-sook, Justice Kim Seon-su, Justice Lee Dong-won, Justice Noh Jeong-hee, Justice Noh Tae-ak, Justice Lee Heung-gu, Justice Cheon Dae-yeop, Justice Oh Kyung-mi (Presiding Judge in Charge), Justice Oh Seok-jun