[Defendant] Defendant
[Appellant] Prosecutor
[Judgment Below] Seoul Northern District Court Judgment 2022. 1. 21., 2021No1015
[Order]
The judgment below is reversed, and the case is remanded to the Seoul Northern District Court.
[Reasoning]
The grounds of appeal are examined.
1. Summary of the facts charged in this case
The Defendant is an employer who, as the representative of ○○○ Language Institute (○○○국어학원), operates an academy business employing five or more regular workers. The Defendant, without any agreement between the parties to extend the payment deadline, failed to pay within 14 days from the date of retirement the wages for May 2020 owed to three retired workers—Non-Indicted 1, Non-Indicted 2, and Non-Indicted 3 (hereinafter “Non-Indicted 1 et al.”)—who had worked at the above workplace from May 21, 2019 to May 31, 2020, including Non-Indicted 1's May 2020 wages of KRW 5,115,779, the total amount of the May 2020 wages for the three retired workers being KRW 12,115,779.
2. Judgment of the court below
The court below found that although Non-Indicted 1 et al. constituted workers who provided labor to the Defendant, the employer, in a subordinate relationship for the purpose of wages, in light of the following circumstances there was a substantial reason for the Defendant's failure to pay the May 2020 wages to Non-Indicted 1 et al., and thus it was difficult to conclude that the Defendant had the intent to violate the Labor Standards Act (근로기준법). Accordingly, the court below reversed the first instance judgment, which had found the facts charged in this case guilty, and rendered a not-guilty verdict for the Defendant.
A. Non-Indicted 1 received compensation on a commission basis rather than a fixed salary, and Non-Indicted 2 and Non-Indicted 3 also received commission-based compensation for amounts exceeding a certain fixed sum.
B. Non-Indicted 1 et al. had considerable autonomy regarding class management, and the Defendant withheld business income tax, not wage income tax, from them.
C. There were no employment rules or service regulations applicable to Non-Indicted 1 et al., there was no indication that the Defendant strictly controlled the attendance or working hours of Non-Indicted 1 et al., and the contract also provided that Non-Indicted 1 et al. could conduct independent business activities such as tutoring classes.
D. Since the employment relationship of Non-Indicted 1 et al. had substantial indicia of being independent business operators rather than ordinary workers, it appears difficult for the Defendant, who lacked specialized legal knowledge, to have recognized Non-Indicted 1 et al. as workers.
E. The Defendant refused only to pay the May 2020 wages, which arose in the month Non-Indicted 1 et al. resigned, on the basis of the liquidated damages clause specified in the contract, and paid all wages up to that point in full.
3. Judgment of the Supreme Court
A. If there exists a ground to dispute the existence and scope of the obligation to pay wages, etc., it should be deemed that there was a substantial reason for the employer's failure to pay such wages, etc., and thus it is difficult to find that the employer had the intent to violate Article 109(1) and Article 36 of the Labor Standards Act. Whether there exists a ground to dispute the existence and scope of the obligation to pay wages, etc. must be determined by comprehensively considering the reasons for the employer's refusal to pay, the basis of the payment obligation, the organization and scale of the company operated by the employer, the business purpose, and other various circumstances, as well as other circumstances existing at the time of the dispute regarding the existence and scope of the obligation to pay wages, etc. (see Supreme Court Decision 2007Do1539, decided June 28, 2007; Supreme Court Decision 2017Do4343, decided July 11, 2017, etc.).
B. Examining the various circumstances recognized by lawfully adopted evidence in light of the above legal principles, insofar as there is no ground for the Defendant to dispute the existence and scope of the obligation to pay the May 2020 wages to Non-Indicted 1 et al., it is difficult to find a justifiable reason for the Defendant's failure to pay such wages, and thus it is recognized that the Defendant had the intent to violate the Labor Standards Act. The reasons are as follows.
1) The contract executed between the Defendant and Non-Indicted 1 et al. explicitly designated Non-Indicted 1 et al. as “workers” (근로자) and included provisions concerning working hours, retirement, and dismissal, among other matters. Although Non-Indicted 1, among the workers, had a certain degree of authority regarding class management, the final decision-making authority rested with the Defendant, and the Defendant gave specific instructions to Non-Indicted 1 et al. regarding the management of academy students, including matters such as students' learning progress. When Non-Indicted 2 and Non-Indicted 3, among the workers, concentrated their classes during examination periods and did not report to work for 4 days and 3 days, respectively, during the remainder of their working period, the Defendant reprimanded them for this and demanded that an amount calculated by multiplying the number of absent days by the daily wage be deducted from their pay. In light of these circumstances, it is difficult to find a justifiable reason for the Defendant's failure to recognize Non-Indicted 1 et al. as workers subject to the application of the Labor Standards Act.
2) Since the Defendant bore the obligation to pay Non-Indicted 1 et al. wages for their work in May 2020 pursuant to the contract concluded with them, the circumstance that the Defendant did not recognize Non-Indicted 1 et al. as workers cannot serve as a justifiable ground for not paying the May 2020 wages.
3) The Defendant refused to pay the May 2020 wages to Non-Indicted 1 et al. on the basis of a liquidated damages clause providing that “if Non-Indicted 1 et al. unilaterally terminate the contract, they shall pay to the Defendant an amount equivalent to one month's wages as liquidated damages.” However, Article 20 of the Labor Standards Act provides that “an employer shall not conclude a contract that sets in advance a penalty or damages for non-performance of a labor contract,” and therefore, the validity cannot be recognized of an agreement providing that, in the event of retirement prior to the agreed-upon working period in violation of this provision, a predetermined amount shall be paid to the employer immediately, regardless of what damage, if any, and to what extent, was actually incurred by the employer. Furthermore, since wages owed to a worker must be paid in full directly to the worker, an employer may not, except with respect to a claim for the return of overpaid wages, set off the worker's wage claim against a claim the employer holds against the worker arising from a loan or from a tort (see Supreme Court en banc Decision 94Da26721, decided December 21, 1995; Supreme Court Decision 2017Do4343, decided July 11, 2017, etc.). Accordingly, it is difficult to find a justifiable reason for the Defendant's failure to pay the May 2020 wages based on the above liquidated damages clause.
C. Nevertheless, the court below, for the reasons stated in its judgment, found it difficult to conclude that the Defendant had the intent to violate the Labor Standards Act, and thereby rendered a not-guilty judgment on the facts charged in this case. The judgment below contains an error that affected the conclusion of the judgment by misapprehending the legal principles regarding intent in the crime of violating the Labor Standards Act due to non-payment of wages. The ground of appeal pointing this out is well-founded.
4. Conclusion
Therefore, the judgment below is reversed, and the case is remanded to the court below for further examination and determination. This decision is rendered as stated in the Order by the unanimous opinion of the participating Justices.
Justice Roh Tae-ak (Presiding Justice), Park Jeong-hwa (Justice in charge), Kim Seon-su, Oh Kyung-mi