[Plaintiff, Appellant] Plaintiff (Attorneys of Law Firm LOGOS, Kang Wan-gu and 2 others, for the Plaintiff)
[Defendant, Appellee] Seoul Metropolitan Government (Attorney of Law Firm Daul, Seo Jeong-uk, for the Defendant)
[Judgment Below] Seoul High Court Decision 2006Nu6767, decided September 29, 2006
[Order]
The part of the judgment below concerning the claim for payment of money is reversed, and this part of the case is remanded to the Seoul High Court. The Plaintiff's remaining appeal is dismissed.
[Reasoning]
The grounds of appeal are examined.
1. Regarding the interest in confirmation
Where a contract-based public official employed by a local government under an employment contract suffers a disadvantage such as termination of the employment contract before the expiration of the contract term, and the contract term thereafter expires, even if the declaration of intent to terminate the employment contract is invalid, since there is no provision in the Local Public Officials Act (지방공무원법) or the Regulation on Local Contract-Based Public Officials (지방계약직공무원규정) that imposes an obligation to renew the contract with a contract-based public official whose contract term has expired, the person inevitably loses the status of contract-based public official upon expiration of the contract term and cannot recover that status. Accordingly, a claim seeking confirmation of the invalidity of such declaration of termination is nothing more than a claim for confirmation of a past legal relationship. Meanwhile, even with respect to a past legal relationship, where it continues to affect a present right or legal status and where obtaining a declaratory judgment on that legal relationship is recognized as an effective and appropriate means of removing danger or uncertainty concerning a present right or legal status, an action for confirmation of that legal relationship shall be deemed to have the benefit of immediate confirmation. However, where the employment contract of a contract-based public official has been terminated, this does not constitute any statutory impediment to being appointed as a public official or otherwise; and even if having a history of contract termination prior to the expiration of the contract term operates as a de facto disadvantageous impediment, compared to a person without such history, in being appointed as a public official or otherwise, this alone cannot be deemed an infringement of a legal interest, and therefore there is no interest in seeking confirmation of invalidity (see, e.g., Supreme Court Decision 2002Du1496, decided November 26, 2002). Furthermore, as in this case, once the contract term has already expired and the position cannot be legally restored as a result of the litigation, mere confirmation of the invalidity of the declaration of intent to terminate the employment contract cannot be said to serve the function of relief sought in the litigation; and since there exist direct means of relief through performance-based litigation, such as a claim for payment of the infringed wage claim or a claim for damages premised on defamation of actual reputation, in order to recover the infringed wage claim or actual reputation, an action for confirmation of invalidity cannot be regarded as an appropriate means of relief, and thus fails to satisfy another requirement for a declaratory action. Moreover, disallowing an action for confirmation of invalidity where such direct means of relief exist does not amount to blocking the party's relief of rights (see, e.g., Supreme Court en banc Decision 95Jaeda199, decided May 18, 2000).
The lower court's determination, to the same effect, that the part of this lawsuit seeking confirmation of the invalidity of the declaration of intent to terminate the employment contract is unlawful for lack of interest in confirmation, is acceptable, and there is no error in the lower court's judgment, such as a misunderstanding of the legal principles concerning the interest in confirmation, as alleged in the grounds of appeal.
2. Regarding the legal basis for the pay reduction measure in this case
Since wages constitute the fundamental resource for the survival of workers and their dependent families, the Labor Standards Act (근로기준법), in order to protect wage claims, compels payment of wages in currency, direct payment, payment in full, and payment at least once a month on a regular basis (Article 43), in addition to recognizing priority in payment for wage claims (Article 38) and prohibiting set-off (Articles 21 and 43); and other statutes, such as the Civil Execution Act (민사집행법), also establish devices to protect wage claims, such as restricting attachment of wage claims (Article 246). Since a public official is also a worker under Article 2 of the Labor Standards Act who provides labor for the purpose of earning wages, the above provisions apply equally to public officials.
Meanwhile, the Local Public Officials Act and the Regulation on the Remuneration of Local Public Officials (지방공무원보수규정), a Presidential Decree enacted pursuant to delegation thereunder to prescribe matters necessary regarding the remuneration of local public officials, contain no provision that could serve as a basis for reducing the remuneration of either career public officials or special career public officials. However, Article 70 of the Local Public Officials Act provides for "reduction of pay" as one type of disciplinary action, and with respect to special career public officials, Article 73-3 of the Local Public Officials Act (Discipline of Special Career Public Officials) provides that "except where otherwise specially provided by other statutes, the provisions of this Chapter may be applied mutatis mutandis to special career public officials as prescribed by Presidential Decree," and Article 13(4) of the Regulation on Discipline and Grievances of Local Public Officials (지방공무원징계및소청규정), a Presidential Decree, provides that "where a contract-based public official under Article 2(3)(3) of the Act has grounds for discipline set forth in any subparagraph of Article 69(1) of the Act, disciplinary action under this Decree may be taken in addition to terminating the employment contract." Accordingly, disciplinary action, including reduction of pay, is also possible against special career public officials pursuant to the Local Public Officials Act and the Regulation on Discipline and Grievances of Local Public Officials.
In light of the legislative purpose of the Labor Standards Act and other relevant laws as set out above, and the contents of the provisions of the Local Public Officials Act and the Regulation on Discipline and Grievances of Local Public Officials, it is reasonable to hold that, absent any special agreement in the employment contract, the remuneration of a local contract-based public official cannot be reduced except through the disciplinary procedures prescribed by the Local Public Officials Act and the Regulation on Discipline and Grievances of Local Public Officials.
According to the reasoning of the judgment below, the lower court, citing the judgment of the first instance, determined as follows: Pursuant to Article 8 of the Regulation on Local Contract-Based Public Officials (지방계약직공무원규정), a Presidential Decree enacted pursuant to delegation under Article 2(4) of the Local Public Officials Act to prescribe matters concerning the employment conditions and appointment procedures of local contract-based public officials, the head of a local government may periodically or occasionally evaluate the work conditions and performance of an employed local contract-based public official and reflect such evaluation when changing, extending, or terminating the contract; and pursuant to the Seoul Metropolitan Government Rules on Personnel Management of Local Contract-Based Public Officials (서울특별시 지방계약직공무원 인사관리규칙, hereinafter referred to as the "Personnel Management Rules"), which prescribe matters necessary for the enforcement of the said Decree pursuant to Article 10 thereof, among the performance evaluations under Article 8 of the Decree, a regular evaluation shall be conducted every year after employment, an occasional evaluation shall be conducted when extending the contract, adjusting the salary amount, or otherwise changing the contract contents, and a final evaluation shall be conducted upon expiration of the contract term (Article 7(1)); the results of the performance evaluation shall be reflected in personnel management of contract-based public officials, such as extension or termination of the contract and adjustment of salary amount (Article 7(5)); the salary of a person whose performance evaluation result is poor may be reduced (Article 8(3)); and pursuant to the Guidelines for Performance Evaluation of Contract-Based Public Officials (계약직 공무원 근무실적 평가요령, hereinafter referred to as the "Evaluation Guidelines") established by the Mayor of Seoul pursuant to Article 7(2) of the Personnel Management Rules, remuneration may be reduced where the evaluation grade corresponds to "Grade D (Unsatisfactory)." Synthesizing the above provisions, the lower court determined that "change of the contract" under Article 8 of the Regulation on Local Contract-Based Public Officials includes "adjustment of the salary amount," and since the Personnel Management Rules and the Evaluation Guidelines based thereon expressly provide that the salary amount of a local contract-based public official may be adjusted based on the results of the performance evaluation, the pay reduction measure in this case, having been made based on the relevant statutes and regulations, is lawful.
However, the above determination of the lower court is difficult to accept for the following reasons, in light of the legal principles set out above.
First, Article 76(1), (2), and (3) of the Local Public Officials Act respectively provide as follows: "The appointing authority shall periodically or occasionally evaluate the work performance of public officials under its jurisdiction objectively and strictly, and shall reflect such evaluation in personnel management," "A public official whose work performance is evaluated as excellent as a result of the performance evaluation under paragraph (1) may be paid a bonus or given a special promotion," and "Matters concerning the performance evaluation under paragraph (1) shall be prescribed by Presidential Decree." These provisions apply equally to both career public officials and special career public officials, and merely provide that a bonus may be paid to a public official with excellent work performance; they cannot serve as a basis for reducing the remuneration of a public official with poor work performance.
Meanwhile, Article 8 of the Regulation on Local Contract-Based Public Officials, a Presidential Decree prescribing matters necessary concerning the employment conditions and appointment procedures of local contract-based public officials, provides that "the head of a local government may periodically or occasionally evaluate the work conditions and performance of an employed local contract-based public official and reflect such evaluation when changing, extending, or terminating the contract." This provision, to the effect that performance may be reflected when changing the contract, cannot by itself be construed to give rise to a right of the head of a local government to unilaterally reduce the remuneration of a local contract-based public official.
However, Article 8(3) of the Personnel Management Rules, established for the purpose of prescribing matters necessary for the enforcement of the Regulation on Local Contract-Based Public Officials, provides as follows: "With respect to a contract-based public official currently in service, the salary of the contract-based public official shall be adjusted in accordance with amendments to the Regulation on the Remuneration of Local Public Officials, provided that, in this case, the Mayor may separately determine the rate within the range of the salary increase rate applicable to all public officials, taking into account such rate: Provided, That with respect to a person falling under category "A" of the employment classification in the [Attached Table] of the Decree, or a person for whom there exists a special reason to adjust the salary beyond the standard salary increase range, such as excellence of performance or acquisition of a new qualification, or a person whose performance evaluation result is poor, the salary increase standard may be exceeded, or the salary may be frozen or reduced, after undergoing prior review by the Evaluation Committee under Article 7(3), with necessary materials such as the performance evaluation report prepared." This provision, thus, provides that the salary of a person with poor performance evaluation results may be reduced. However, a reduction in remuneration, from the standpoint of the public official subjected thereto, is no different from a reduction of pay, which is a type of disciplinary action; and yet, this provision does not guarantee the procedural rights afforded in the case of disciplinary action, such as the right to state facts favorable to oneself or to submit evidence (Article 5 of the Regulation on Discipline and Grievances of Local Public Officials), nor does it recognize remedies such as a grievance procedure (Article 16 of the Regulation on Discipline and Grievances of Local Public Officials); this provision, which requires the public official to bear such a disadvantage without any such procedural safeguards, cannot but be deemed unjust, and moreover, as noted above, it lacks any basis of delegation under the Local Public Officials Act or the Regulation on Local Contract-Based Public Officials, or exceeds the scope of delegation, and is therefore invalid.
Nevertheless, the lower court determined that the pay reduction measure taken by the Defendant against the Plaintiff based on Article 8(3) of the Personnel Management Rules, among others, was legitimate; accordingly, the judgment below contains an error of law that misunderstands the legal principles concerning the remuneration, among other matters, of local contract-based public officials, thereby affecting the judgment, and the ground of appeal pointing this out is well-founded.
Furthermore, according to the reasoning of the judgment below, with respect to the Plaintiff's assertion that the pay reduction measure in this case constitutes a reduction-of-pay disciplinary action, and is invalid because it was not subjected to deliberation and resolution by a disciplinary committee under the Public Officials Disciplinary Decree, the lower court rejected the Plaintiff's assertion on the grounds that the pay reduction measure in this case was part of a change of contract pursuant to the Local Contract-Based Public Official Employment Contract concluded between the Plaintiff and the Defendant on July 1, 2002, and the Regulation on Local Contract-Based Public Officials, and thus cannot be deemed a disciplinary action; that the Public Officials Disciplinary Decree is a statute prescribing discipline for national public officials and does not apply to a special career local public official such as the Plaintiff; and that, pursuant to Article 3(1) of the Local Public Officials Act, Articles 69 through 73-3 of the Local Public Officials Act concerning discipline do not apply to a special career local public official such as the Plaintiff; therefore, the Plaintiff's assertion, which presupposes that the pay reduction measure in this case constitutes a disciplinary action, is without merit. However, as noted above, since disciplinary action may be taken against a local contract-based public official pursuant to Article 73-3 of the Local Public Officials Act and Article 13(4) of the Regulation on Discipline and Grievances of Local Public Officials where there exist grounds for discipline set forth in any subparagraph of Article 69(1) of the Local Public Officials Act, it must be pointed out that the lower court's statement to the effect that the provisions of the Local Public Officials Act concerning discipline do not apply to a local contract-based public official such as the Plaintiff cannot be deemed appropriate.
3. Accordingly, the part of the judgment below concerning the claim for payment of money is reversed, and this part of the case is remanded to the Seoul High Court, and the Plaintiff's remaining appeal is dismissed. It is so decided by the unanimous opinion of the participating Justices as stated in the Order.
Justices Kim Hwang-sik (Presiding Justice), Kim Young-ran, Lee Hong-hoon, Ahn Dae-hee (Justice in Charge)