[Plaintiffs, Appellants and Appellees] Plaintiff 1 and 4 others (Attorneys of Law Firm Simin Jonghap Law Office, Yoon Jong-hyun and 4 others, for the plaintiffs)
[Plaintiffs, Appellees] Plaintiff 6 and 1 other
[Defendant, Appellee and Appellant] Dongbu Express Co., Ltd. (Attorneys of Law Firm Somyeong, Kyung Soo-geun and 4 others, for the defendant)
[Judgment Below] Seoul High Court Judgment 98Na65719, rendered October 29, 1999
[Order]
All appeals are dismissed. The costs of appeal shall be borne by each respective party.
[Reasoning]
The grounds of appeal are examined.
1. As to Grounds of Appeal Nos. 1, 2, and 3 raised by Plaintiff 1, Plaintiff 2, Plaintiff 3, Plaintiff 4, and Plaintiff 5, and as to the Defendant's Grounds of Appeal
A. Factual findings and determination of the court below
According to the reasoning of the judgment below, the court below found as follows: Under Article 44 of the 1996 collective bargaining agreement (단체협약) originally concluded between the Defendant company's labor union and the Defendant, the Defendant company was to pay employees bonuses totaling 650% of wages over seven occasions per year, consisting of 50% at the Lunar New Year and 100% each on February 25, April 25, June 25, August 25, October 25, and December 25. However, during the term of validity of that collective bargaining agreement, on December 30, 1997, the labor union and the Defendant entered into an agreement entitled the "Special Labor-Management Agreement" (특별노사합의), the content of which was that "in order to overcome management difficulties caused by the recent economic crisis, both labor and management of the Defendant company agree to withhold payment of the bonuses at issue (450%) scheduled to be paid from December 1997 through June 1998." Subsequently, on August 13, 1998, the parties concluded the "1998 Wage and Collective Bargaining Agreement" (1998년도 임금단체협상 합의), the content of which was that "in order to overcome the severe management difficulties caused by the continuing economic recession following the IMF bailout regime, both labor and management of the Defendant company agree to freeze the 1998 wage agreement at its current level, to maintain the existing collective bargaining agreement, and, with respect to implementation of Article 44 of the existing collective bargaining agreement concerning bonuses, to have the Company determine whether to pay bonuses according to its business performance and future business outlook; and that, to the extent any part of the December 30, 1997 Special Labor-Management Agreement conflicts with the effect of this agreement, the effect of this agreement shall prevail, while the remaining parts not in conflict shall continue to be effective."
The court below then determined that the meaning of "withholding payment" under the Special Labor-Management Agreement was to postpone the payment deadline for the bonuses at issue until such time as a subsequent collective bargaining agreement concerning their payment was concluded, and that it was reasonable to view the bonuses subject to the Defendant's determination of whether to pay, based on the Company's business performance and future business outlook under the 1998 Wage and Collective Bargaining Agreement, as including the bonuses at issue whose payment had been withheld under the Special Labor-Management Agreement. The court below further reasoned that it could be readily inferred that the Special Labor-Management Agreement and the 1998 Wage and Collective Bargaining Agreement were concluded with the intent of reducing the burden of labor costs, in consideration of the Defendant company's deteriorated management circumstances under the IMF bailout regime, thereby assisting the Company's financial situation, overcoming the management crisis, and avoiding corporate bankruptcy or mass layoffs, so as to find a way for labor and management to coexist; and that these agreements did not waive the right to claim payment of the bonuses at issue but left room for future payment depending on management circumstances, etc. Taking these matters together, the court below concluded that the respective agreement provisions withholding payment of the bonuses at issue, or deferring the determination of whether to pay them depending on management circumstances, could not be regarded as so disadvantageous to the employees as to exceed the limits of the essential purpose of a collective bargaining agreement. Accordingly, the court below determined that these agreement provisions were effective against the Plaintiffs, who were union members, with respect to the portions of the bonuses at issue other than the December 25, 1997 installment, for which the right to claim payment had already arisen at the time of the Special Labor-Management Agreement; however, with respect to the December 25, 1997 installment of the bonus, the agreement was not effective against the Plaintiffs unless the labor union had individually received delegation of the power of disposition from the Plaintiffs.
B. As to Ground of Appeal No. 3 of the Plaintiffs
Upon examination of the record, the factual findings of the court below regarding the Defendant's management situation and the circumstances surrounding the conclusion of the Special Labor-Management Agreement and the Wage and Collective Bargaining Agreement are justified, and there is no illegality therein such as a violation of the rules of evidence or incomplete deliberation. This ground of appeal cannot be accepted.
C. As to Ground of Appeal No. 1 of the Plaintiffs
In light of the fact that no future payment date for the bonuses at issue was set under the Special Labor-Management Agreement, the overall economic situation in Korea and the management condition of the Defendant company at the time of the agreement, and the motive and circumstances behind the labor union and the Defendant entering into such agreement, it is reasonable to view that the intention of both labor and management at the time of the agreement was that, with respect to bonuses for which the specific right to claim payment had already arisen because the employees had already actually rendered labor for a certain period, the right to claim payment thereof would be waived, and that, going forward, even if the employees actually rendered labor for a certain period, the Company would not pay the corresponding bonuses.
Nevertheless, the court below viewed the meaning of "withholding payment" under the Special Labor-Management Agreement as merely postponing the payment deadline for the bonuses at issue until a subsequent collective bargaining agreement concerning their payment was concluded, and found that, under the 1998 Wage and Collective Bargaining Agreement, whether to make payment was again made subject to the Defendant's determination in consideration of the Company's business performance and future business outlook. In this respect, the judgment below erred in its legal interpretation of the collective bargaining agreement; however, as will be seen below, this error did not affect the outcome of the judgment, and therefore this ground of appeal likewise cannot be accepted.
D. As to Ground of Appeal No. 2 of the Plaintiffs and the Defendant's Grounds of Appeal
Wages (including bonuses) or retirement allowances for which the specific right to claim payment has already arisen have moved into the private property sphere of the employee and are subject to the employee's own disposition; therefore, unless the labor union has received individual consent or delegation of authority from the employees, the labor union cannot, by means of a collective bargaining agreement alone with the employer, perform a disposal act such as waiver or deferral of payment with respect thereto.
Meanwhile, under the principle of autonomy in collective bargaining, a labor union may conclude not only a collective bargaining agreement that favorably changes working conditions but also one that unfavorably changes working conditions vis-à-vis the employer; therefore, absent special circumstances such as where the content of a collective bargaining agreement unfavorably changing working conditions is so markedly lacking in reasonableness that it can be seen as departing from the purposes of the labor union, such an agreement between labor and management cannot be deemed invalid, and the labor union need not obtain individual consent or delegation of authority from the employees in advance for such an agreement. Whether a collective bargaining agreement is markedly lacking in reasonableness should be determined in light of various circumstances, including the content of the agreement, the circumstances of its conclusion, and the employer's management condition at the time (see Supreme Court Decision 99Da7572, decided November 23, 1999).
Even assuming, as found above, that with respect to the December 25, 1997 installment of the bonuses at issue—for which the specific right to claim payment had already arisen at the time of the Special Labor-Management Agreement—the effect of that agreement does not extend to the Plaintiffs, and that with respect to the remaining bonuses, it was agreed that payment would not be made, it still cannot be said, in light of the aforementioned legal principles, that the content of the agreement exceeded the limits of a collective bargaining agreement. Accordingly, the determination of the court below that the Special Labor-Management Agreement is effective against the Plaintiffs is ultimately justified, and there is no illegality therein due to a misunderstanding of the legal principles concerning the effect of a collective bargaining agreement. The precedents cited by the Defendant in its grounds of appeal concern situations in which a labor union may conclude a collective bargaining agreement retroactively consenting to or approving working conditions such as wages, working hours, and retirement allowances that the employer unilaterally changed, and where, in the case of retirement allowances as the working condition at issue, the standard for payment of retirement allowances applies not only to future periods of service but also to past periods of service already accrued (Supreme Court Decision 91Da34073, decided July 24, 1992); or that even where a retirement allowance provision, being one of the rules of employment, is amended unfavorably to existing employees and thereby infringes upon vested interests, such amendment of the retirement allowance provision is valid without the individual consent of each employee so long as there is consent of the labor union or an agreement between the labor union and the employer (Supreme Court Decision 93Da46841, decided May 24, 1994). These cases are not precedents applicable to the present case, in which the issue is whether a labor union can, by agreement with the employer, waive bonuses of individual employees for which the specific right to claim payment has already arisen.
None of the grounds of appeal on this point can be accepted.
2. As to Ground of Appeal No. 4 of Plaintiff 1, Plaintiff 2, Plaintiff 3, Plaintiff 4, and Plaintiff 5
An agreement, as in this case, not to pay a bonus corresponding to a certain period of service before the commencement of that period of service giving rise to the payment obligation cannot be deemed to violate the principles of payment of wages in currency, direct payment, full payment, and regular payment as set forth in the Labor Standards Act (근로기준법); therefore, the determination of the court below to the same effect is justified, and there is no illegality therein due to a misunderstanding of the legal principles concerning the principles of wage payment under the Labor Standards Act.
3. Accordingly, all appeals are dismissed, and the costs of appeal are to be borne by the respective losing parties. This judgment is rendered as set forth in the Order by the unanimous opinion of the participating Justices.
Justice Lee Kyu-hong (Presiding Justice), Song Jin-hoon (Justice in charge), Yoon Jae-sik, Son Ji-yeol