[Plaintiff (Selected Party), Appellee]
[Defendants, Appellants] Incheon Metropolitan City Jung-gu Medical Insurance Cooperative and 5 others (Defendants' Litigation Representative: Dongyang General Law Firm, in charge of attorneys Kim Seong-gi and 4 others)
[Judgment Below]
Seoul High Court Decision 92Na4569, rendered on February 4, 1994
[Order]
The portion of the judgment below against which the Defendants lost is reversed. This portion of the case is remanded to the Seoul High Court.
[Reasoning]
The grounds of appeal (including the grounds stated in the supplemental brief on grounds of appeal submitted after the expiration of the period for submitting the grounds of appeal, to the extent they supplement the original grounds) are examined as follows.
1. As to Ground No. 1
Article 31(1) of the Enforcement Decree of the Labor Standards Act (근로기준법시행령) provides that "ordinary wages" under the Labor Standards Act (근로기준법) mean "the hourly wage amount, daily wage amount, weekly wage amount, monthly wage amount, or piece-rate amount determined to be paid regularly and uniformly for the prescribed work or total work of an employee." Accordingly, in principle, money and valuables paid to an employee as consideration for prescribed work or total work, which are paid regularly and uniformly, shall be regarded as wages belonging to ordinary wages. Therefore, even if wages paid to an employee are paid at intervals exceeding one month, they may be included in ordinary wages so long as they are paid regularly and uniformly, and even if such wages are not paid directly or proportionally in correspondence to work performed during prescribed working hours, this alone does not mean that they are not wages paid for prescribed work or total work, and therefore such wages cannot be excluded from ordinary wages solely for that reason. However, in light of the legislative purpose of the Labor Standards Act in guaranteeing the minimum amount of average wages and recognizing ordinary wages as the standard for calculating premium wages such as overtime allowance, night-work allowance, and holiday-work allowance, as well as dismissal notice allowance, and in light of the function and necessity of ordinary wages, in order for a certain wage to constitute ordinary wages, it must belong to a fixed wage paid regularly and uniformly; therefore, a wage whose payment or amount varies depending on actual work performance cannot be regarded as a fixed wage and thus does not constitute ordinary wages.
Reviewing the present case, according to the record, it can be acknowledged that the Defendant Cooperatives, as found by the court below, paid all employees, including the Plaintiffs, a certain amount based on the monthly basic pay as physical fitness allowance at a fixed time each year, and a certain amount based on the monthly basic pay as winter subsidy in November each year, to all employees including the Plaintiffs. According to this, both the above physical fitness allowance and winter subsidy are money and valuables agreed to be paid for prescribed work or total work, and are fixed wages paid regularly and uniformly, and therefore fall within ordinary wages.
If so, the court below's determination that 1/12 of each of the above physical fitness allowance and winter subsidy, as found by the court below, belongs to the monthly ordinary wage is justified, and there is no illegality therein as argued in the grounds of appeal.
However, according to the Regional Medical Insurance Cooperative Operating Regulations of the Defendant Cooperatives (hereinafter referred to only as the "Operating Regulations") attached to the record, the bonus found by the court below is to be paid, within the budget, at 100% of the basic pay as of the date of payment of the bonus, on each of the pay days in March, June, September, and December each year; provided, however, that it is not paid to persons who have been employed for less than one month, and for persons with less than three months of continuous service, persons who did not perform their duties during the bonus payment period due to leave of absence, suspension, or dismissal from position (excluding cases of leave of absence due to work-related injury), and persons with three months or more of continuous service who retired after working less than half of the bonus payment period, the amount is to be calculated on a pro-rata basis based on the number of days actually worked (see Article 112 of the Operating Regulations as amended on April 4, 1991). In light of this point, whether the bonus is paid and the amount thereof are ultimately determined by the actual work performance of the officers and employees belonging to the Defendant Cooperatives, and therefore it cannot be regarded as a fixed wage, and thus cannot be said to belong to ordinary wages.
Therefore, the court below's calculation of the Plaintiffs' hourly ordinary wage for the year 1991 on the basis that the bonus is included in ordinary wages, in calculating the Plaintiffs' 1991 ordinary wage, committed an error in the legal doctrine on ordinary wages, and this clearly affected the judgment; therefore, this ground of appeal is well-founded on this point.
2. As to Ground No. 2
According to the reasoning of the judgment below, the court below, in calculating the Plaintiffs' overtime work allowance or holiday work allowance, treated as zero, in the overtime work allowance statement and holiday work allowance statement attached to the judgment below, any case in which the respective allowances already received by the Plaintiffs from the Defendant Cooperatives exceeded the amount calculated under the Labor Standards Act, on the ground that there was no obligation to pay the difference in such cases; and ordered the Defendants to pay only the sum of the differences in cases where the amounts of the respective allowances already paid to the Plaintiffs fell short of the amounts of the respective allowances calculated under the Labor Standards Act.
In general, since wages must be paid directly and in full to employees, in principle a claim held by the employer against an employee may not be set off against the employee's wage claim; however, where wages have been overpaid due to a calculation error or the like, and (i) the timing of exercising the right to reclaim the overpayment is reasonably close in time to the period of overpayment to the extent that it does not lose the substantive nature of a settlement or adjustment of wages, and the amount and method are announced in advance such that there is no risk of harming the employee's economic life stability, or (ii) the employee, after retirement, claims wages or retirement allowance that were not paid during his or her employment, then set-off may be made using the claim for return of the overpaid wages as the automatic claim (see Supreme Court Decision 93Da28737, rendered on October 12, 1993, and Supreme Court Decision 93Da38529, rendered on December 28, 1993, etc.). Accordingly, if the respective allowances calculated pursuant to the Operating Regulations of the Defendant Cooperatives fall short of the amount of the respective allowances properly calculated under the Labor Standards Act, then the provisions of the Operating Regulations concerning the method of calculating the respective allowances are invalid; and in such a case, since the respective allowances calculated and paid according to the calculation method under the Operating Regulations cannot exceed the respective statutory allowances properly calculated under the Labor Standards Act, if an overpaid portion arose, it must be regarded as having been erroneously paid. Therefore, where the Plaintiffs claim unpaid statutory allowances for a certain period, the Defendants may set off or apply the overpaid statutory allowance for the same period against other unpaid statutory allowances (see Supreme Court Decision 94Da18553, rendered on June 29, 1995; Supreme Court Decision 94Da54559, rendered on June 30, 1995; Supreme Court Decision 94Da54566, rendered on November 10, 1995; Supreme Court en banc Decision 94Da26721, rendered on December 21, 1995, etc.).
Nevertheless, the court below rendered its judgment as above on the premise that, where the amount of the respective allowances paid by the Defendants to the Plaintiffs exceeds the amount properly calculated under the Labor Standards Act, the excess amount cannot be set off or applied against the unpaid statutory allowance amount; therefore, the court below ultimately misunderstood the legal doctrine concerning the set-off or application of overpaid statutory allowances, thereby committing an illegality that affected the judgment. Accordingly, the ground of appeal disputing this point is well-founded.
3. As to Grounds Nos. 3, 4, and 5
The legislative purpose of the monthly leave system under Article 47 of the Labor Standards Act is to provide employees who have performed prescribed work over a long period with one day of paid leave per month, thereby providing an opportunity for rest through recovery from fatigue resulting from the prescribed work, and to promote the improvement of cultural life through such mental and physical rest (see Supreme Court Decision 90Daka13465, rendered on December 26, 1990; Supreme Court Decision 90Daka11636, rendered on July 26, 1991, etc.). As pointed out in the grounds of appeal, it cannot be said that this system grants one day of paid leave to an employee only where the employee has actually continued to work throughout the remainder of the one-month period excluding paid holidays prescribed under the Labor Standards Act; therefore, the respective provisions of Article 30 of the Enforcement Decree of the same Act cannot be said to violate Article 47 of the same Act or to deviate from its legislative purpose (see the above Supreme Court Decision 94Da18553, rendered on June 29, 1995; Supreme Court Decision 94Da54559, rendered on June 30, 1995; Supreme Court Decision 94Da54566, rendered on November 10, 1995; Supreme Court en banc Decision 94Da26721, rendered on December 21, 1995, etc.).
Furthermore, since the monthly leave system is granted, as noted above, to those who have worked without absence on the prescribed working days during a one-month period, for the purpose of providing an opportunity for rest through recovery from fatigue resulting from long-term work and improving cultural life, in calculating the prescribed working days, it is not the case that, as argued, an employee should be deemed to have attended work only in the case of holidays under Article 30(2) of the Enforcement Decree of the same Act, such as the weekly rest day; rather, in cases of agreed holidays, etc., where the employee's duty to provide labor is exempted for the sake of the employee's rest pursuant to statute, rules of employment, collective agreement, etc., the employee shall likewise be deemed to have attended work, and, absent special circumstances, if the employee has worked on the remaining prescribed working days, monthly leave must be granted.
Furthermore, according to Articles 46 through 55 of the Operating Regulations of the Defendant Cooperatives, it can be recognized that these provisions provide for holidays and leave exceeding the minimum number of days of paid holidays and paid leave under the Labor Standards Act; however, holidays or leave under the above Operating Regulations cannot be substituted for the annual/monthly paid leave under Article 47 of the Labor Standards Act. Therefore, even if, as argued, the Plaintiffs used all of the holidays and leave provided under the Operating Regulations, this cannot be regarded as having substituted for the use of annual/monthly leave.
Furthermore, since the nature of the right to claim monthly leave work allowance—which arises where an employee who has acquired the right to monthly paid leave under Article 47 of the Labor Standards Act works without using such monthly leave within one year from the time the right to leave arose—is that of wages (see Supreme Court Decision 90Daka24496, rendered on December 21, 1990, etc.), the three-year statute of limitations under Article 41 of the same Act applies thereto, and the starting point thereof is the day following the date on which the failure to use the leave is confirmed by the lapse of one year from the date of acquiring the right to monthly paid leave.
Therefore, it cannot be said that the Plaintiffs' claimed right to claim monthly leave work allowance is extinguished simultaneously with the extinction of the right to claim monthly leave.
Furthermore, it is clear from the record that the monthly leave allowance claimed by the Plaintiffs is merely claimed as consideration for having provided labor without using the monthly leave, and is not claimed on the ground of the sale or conversion into cash of the monthly leave.
Ultimately, the grounds of appeal on this point, which stand on a different view from the above or which are premised on an understanding of the Plaintiffs' claim different from the above, are all without merit.
4. As to Ground No. 6
The diligence allowance (정근수당) under the Operating Regulations of the Defendant Cooperatives (as they stood before amendment on April 19, 1990) is paid to all persons meeting the payment requirements under Article 106(1) of the Operating Regulations regardless of whether the employee has used annual/monthly leave; and, in light of the fact that Paragraph (2) of the same Article provides for a reduced payment of the diligence allowance, in accordance with the method prescribed therein, to persons who have received a disciplinary measure of salary reduction or higher or a suspension from position, the diligence allowance under the Operating Regulations differs entirely from the annual/monthly leave work allowance under the Labor Standards Act in its purpose, nature, and payment requirements. Therefore, if an employee, having acquired the right to annual/monthly leave under the Labor Standards Act, continued to work without using such leave within the statutory period, the Defendant Cooperatives must pay the annual/monthly leave work allowance under the Labor Standards Act regardless of whether the diligence allowance under the Operating Regulations was paid.
If so, the court below's determination that Article 106(3) of the Operating Regulations (deleted by the amendment of April 19, 1990), which provides that "the annual/monthly leave allowance to be paid pursuant to Articles 47 and 48 of the Labor Standards Act shall be substituted by this allowance (diligence allowance)," is invalid, and that the Defendants must therefore pay the Plaintiffs the monthly leave allowance (this appears to mean the monthly leave work allowance) under the Labor Standards Act calculated on the basis of ordinary wages, is justified.
The ground of appeal disputing this point is also without merit.
5. As to Grounds Nos. 7 and 8
The court below found that the Plaintiffs performed overtime work for the hours indicated in the overtime work allowance statement attached to the judgment below, from May 1989 until the termination of the employment relationship due to each Plaintiff's dismissal or removal, and then calculated the Plaintiffs' overtime work allowance by applying the premium rate under Article 46 of the Labor Standards Act to each such hour. However, the court below itself acknowledged the fact that, under the Operating Regulations of the Defendant Cooperatives, employees' working hours are prescribed to conform to the working hours of public officials; therefore, in the case of the Defendant Cooperatives, employees work 8 hours on weekdays and 4 hours on Saturdays, but during the winter season, from November to February of the following year, the working hours on weekdays (excluding Saturdays) are shortened by one hour, such that employees work 7 hours.
Therefore, if the overtime hours of the Plaintiffs as found by the court below include the above shortened one hour during the winter season, then even if there exist hours worked in excess of 4 hours on Saturdays or in excess of 7 hours on weekdays, the portion of such overtime hours, combined with the shortened one hour, that does not exceed 8 hours per day and 44 hours per week falls within the statutory standard working hours under Article 42 of the same Act; therefore, work during this portion is similar to so-called "within-statute overtime work" and does not fall under overtime work under Article 46 of the same Act, for which premium wages are paid. Accordingly, unless it is recognized that the Operating Regulations or the like provide for the payment of premium wages under Article 46 of the same Act even for within-statute overtime work, there is no need to pay premium wages under Article 46 of the same Act for this portion of work (see Supreme Court Decision 90Daka14758, rendered on June 28, 1991, and the above Supreme Court Decision 94Da18553, rendered on June 29, 1995; Supreme Court Decision 94Da54559, rendered on June 30, 1995; Supreme Court Decision 94Da54566, rendered on November 10, 1995, etc.).
Furthermore, according to Article 105 and Attached Table 15 of the Operating Regulations of the Defendant Cooperatives, while it is provided that overtime work allowance is paid to employees who worked pursuant to an order for overtime work, with the premium rate set at 150% of the amount equivalent to 1/184 of the basic pay (see Defendant's Exhibit No. 1-1), even if, under the above Operating Regulations, work outside the working hours prescribed under the Operating Regulations is regarded as overtime work, and even if there was an intention to pay the premium wage under the above Operating Regulations even where such overtime work includes within-statute overtime work, it cannot be regarded, on this basis, as having provided for the payment of the premium wage under Article 46 of the Labor Standards Act for overtime work corresponding to within-statute overtime work.
Therefore, in the case of the Defendant Cooperatives, the working hours on Saturdays are 4 hours, and the working hours on weekdays during the winter season are 7 hours; moreover, there is a possibility that the Plaintiffs used holidays or leave other than the weekly rest day during the period in which they claim to have performed overtime work, and in such a case, working up to 8 hours on a Saturday may not exceed 44 hours per week; furthermore, there is a possibility that the hours claimed by the Plaintiffs as overtime work include the portion corresponding to the shortened one hour during the winter season as described above. Nevertheless, without examining whether such inclusion occurred, the court below recognized the entire overtime work claimed by the Plaintiffs as overtime work under Article 46 of the Labor Standards Act, and accordingly calculated the Plaintiffs' overtime work allowance by applying the premium rate under the same Article; this constitutes an error resulting from a failure to fully examine the case, arising from a misunderstanding of the legal doctrine concerning overtime work and its allowance. Therefore, the ground of appeal pointing out this issue is well-founded.
6. As to Ground No. 9
The court below found that the Plaintiffs performed holiday work for the number of days indicated in the holiday work allowance statement attached to the judgment below, and then calculated the Plaintiffs' holiday work allowance by multiplying the Plaintiffs' daily ordinary wage—calculated by treating holiday work hours as 8 hours based on the hourly ordinary wage as found by the court below—by the number of days of holiday work for each Plaintiff as found above. The court below also found that the Plaintiffs failed to use the number of days of monthly leave, as indicated in the monthly leave allowance statement attached to the judgment below, among the monthly leave days accrued under the Labor Standards Act from around May 1989 until each Plaintiff's respective retirement, and then calculated the Plaintiffs' monthly leave allowance (as previously noted, this means the monthly leave work allowance) by multiplying the Plaintiffs' daily ordinary wage—calculated by treating working hours as 8 hours based on the hourly ordinary wage as found by the court below—by the number of days of unused monthly leave for each Plaintiff as found above.
However, in calculating the overtime work allowance or holiday work allowance under Article 46 of the Labor Standards Act, or the monthly leave work allowance accruing where an employee who has acquired the right to monthly paid leave under Article 47 of the same Act works without using such leave within one year, the calculation must be based on the hours actually worked; and this conclusion does not change merely because, in calculating the Plaintiffs' prescribed monthly working hours, the prescribed working hours during the winter season are treated as 8 hours, and the Plaintiffs' hourly ordinary wage is calculated accordingly (see the above Supreme Court Decision 94Da18553, rendered on June 29, 1995; Supreme Court Decision 94Da54559, rendered on June 30, 1995; Supreme Court en banc Decision 94Da26721, rendered on December 21, 1995, etc.).
Nevertheless, the court below, while acknowledging that, under the Operating Regulations of the Defendant Cooperatives, employees' working hours are prescribed to conform to the working hours of public officials, entirely failed to take into account the fact that the working hours on weekdays (excluding Saturdays) during the winter season are 7 hours, and, without examining whether the Plaintiffs' holiday work or monthly leave occurred during the winter season, casually calculated the above respective allowances by treating the Plaintiffs as having worked 8 hours and multiplying the hourly ordinary wage as calculated by the court below by 8 hours, as stated in its judgment. Accordingly, the court below committed an illegality, affecting the judgment, arising from a misunderstanding of the legal doctrine concerning the calculation of holiday work allowance and monthly leave allowance; therefore, the ground of appeal pointing out this issue is also well-founded.
7. As to Grounds Nos. 10 and 11
Regarding the payment of wages during a period of industrial action, unless it is recognized that a collective agreement, rules of employment, or the like provides for this, or that there exists an agreement or practice between the parties concerning such payment, then during the period of industrial action in which the employee did not provide labor, the primary rights and obligations, such as the employee's duty to provide labor, are suspended, and therefore the employee's wage claim, as the primary right corresponding to the duty to provide labor, does not arise. It cannot be said that, merely because a collective agreement, rules of employment, or the like, which presupposes a normal employment relationship in which the employer may exercise the right to direct labor in relation to the employee's provision of labor, provides for payment of certain wages to absent employees, or does not provide for wage deduction, or because there has been a practice of paying certain wages, the parties had an intention to pay wages, or had entered into an employment contract providing for payment of wages, to an employee who did not provide labor because he or she participated in industrial action during the period of industrial action—a situation in which the employer cannot exercise any right to direct labor in relation to the employee's provision of labor due to the suspension of the employee's duty to provide labor, and which is markedly different in form from ordinary absence from work—by analogy (see the above Supreme Court en banc Decision 94Da26721, rendered on December 21, 1995).
Therefore, even though, as found by the court below, the Operating Regulations of the Defendant Cooperatives provide for the payment of a portion of the basic pay to absent employees, and provide that persons who receive a portion of the remuneration under the Operating Regulations shall be treated as having continuously worked for purposes of payment of the diligence allowance, it cannot be said that an employee who did not provide labor due to industrial action should be treated, merely on the basis of the superficial similarity that there was no provision of labor under the employment contract, as equivalent to an absent employee under the Operating Regulations, and that on this basis, persons such as the Plaintiffs who did not provide labor due to industrial action become subject to payment of the diligence allowance.
Furthermore, Article 106(1)(1) of the Operating Regulations of the Defendant Cooperatives (as they stood before amendment on April 4, 1991) provides that "the diligence allowance paid in January shall be paid to a person who holds the status of officer or employee as of January 1 and who has continuously worked from before December 1 of the previous year (including a person who receives a portion of the remuneration)," and Item (2) provides that "the diligence allowance paid in July shall be paid to a person who holds the status of officer or employee as of July 1 and who has continuously worked from before June 1 of the relevant year (including a person who receives a portion of the remuneration)." Under the above Operating Regulations, separately from the requirement of holding status as of January 1 or July 1, "continuous work from before December 1 of the previous year or June 1 of the relevant year" is provided as a payment requirement; and while the first part of the provision uses the expression "holding the status of officer or employee," the latter part uses the different expression "person who has continuously worked." Moreover, the purpose of treating, under the Operating Regulations, a "person who receives a portion of the remuneration" as a person who has continuously worked is merely to treat, exceptionally, an employee as having continuously worked even though the employee did not actually work, in cases where the Defendant Cooperatives themselves, of their own volition, exempted the relevant employee from the duty to provide labor, so as not to cause the relevant employee any particular disadvantage in the payment of the diligence allowance as a result thereof (provided that Article 106(2) of the Operating Regulations separately provides for a reduction with respect to persons who received a disposition of suspension from position). In light of the foregoing, "a person who has continuously worked" under Article 106(1) of the above Operating Regulations should, in principle, be interpreted as meaning a person who has continuously provided actual labor as prescribed by the Operating Regulations.
Furthermore, Article 106(1)(1) of the Operating Regulations of the Defendant Cooperatives, as amended on April 4, 1991, provides that "the diligence allowance paid in January shall be paid to a person who, holding the status of officer or employee as of January 1, and among those receiving basic pay as of January 1, has continuously received basic pay from before December 1 of the previous year (including a person receiving a portion of the basic pay)," and Item (2) likewise provides that "the diligence allowance paid in July shall be paid to a person who, holding the status of officer or employee as of July 1, and among those receiving basic pay as of July 1, has continuously received basic pay from before June 1 of the relevant year (including a person receiving a portion of the basic pay)." Under the above amended Operating Regulations as well, the diligence allowance under the Operating Regulations is provided to be paid where, separately from the requirement of holding status as of January 1 or July 1, the requirement of "among those receiving basic pay as of January 1, a person who has continuously received basic pay from before December 1 of the previous year" or "among those receiving basic pay as of July 1, a person who has continuously received basic pay from before June 1 of the relevant year" is satisfied. The change in the wording of this separate payment requirement appears to have been made in order to more clearly express that the expression "person who has continuously worked" under the previous Operating Regulations did not simply mean a person who continuously retained employee status, but rather meant continuous provision of actual labor; therefore, under the amended Operating Regulations as well, continuous provision of actual labor as prescribed by the Operating Regulations is likewise required as a requirement for payment of the diligence allowance.
Nevertheless, in this case, where the Operating Regulations of the Defendant Cooperatives contain no provision whatsoever concerning the payment of wages during a period of industrial action, and where it is not recognized that there exists an agreement between the parties concerning such payment, or a practice of paying the diligence allowance where labor was not provided due to industrial action, the court below, while acknowledging the fact that the Plaintiffs went on strike from around November 10, 1989 to December 22 of the same year, and from May 1, 1991 to August 15 of the same year, nevertheless held that the Defendants were obligated to pay the Plaintiffs the diligence allowance that should have been paid pursuant to the Operating Regulations in January 1990 or July 1991. Accordingly, the court below ultimately misunderstood the legal doctrine concerning the payment of wages during a period of industrial action, and erred in the interpretation of the Operating Regulations of the Defendant Cooperatives; therefore, the ground of appeal disputing this point is also well-founded.
8. Therefore, accepting part of the grounds of appeal, the portion of the judgment below against which the Defendants lost is reversed, and this portion of the case is remanded to the court below for further examination and determination. This Judgment is rendered by the unanimous opinion of the participating Justices, as set forth in the Order.
Justice Ahn Yong-deuk (Presiding Justice), Justice Cheon Gyeong-song, Justice Ji Chang-gwon, Justice Shin Seong-taek (Justice in Charge)