[Plaintiff, Appellant and Appellee] Plaintiff
[Defendant, Appellee] Republic of Korea
[Defendant, Appellee and Appellant] Defendant 2
[Judgment Below] Seoul Northern District Court Decision 2020Na40717 rendered on April 6, 2021
[Order]
All appeals are dismissed. Of the costs of appeal, the portion arising from the Plaintiff's appeal shall be borne by the Plaintiff, and the portion arising from Defendant 2's appeal shall be borne by Defendant 2.
[Reasoning]
The grounds of appeal (to the extent that documents submitted after the expiration of the period for submitting the grounds of appeal supplement the grounds of appeal) are examined.
1. Case Overview and Issues
A. 1) Defendant 2 worked as a care worker at a nursing care welfare facility for the elderly operated by the Plaintiff for one year from August 1, 2017 to July 31, 2018, and used 15 days of annual paid leave.
2) In May 2018, the Ministry of Employment and Labor (고용노동부) distributed "Explanatory Materials on the Amended Labor Standards Act (근로기준법) Regarding Expanded Guarantee of Annual Paid Leave for Employees with Less Than One Year of Service, etc. (hereinafter referred to as "the Explanatory Materials at Issue")," which stated: "In the case where the contract period of a fixed-term employee with a one-year contract expires, allowance for up to 26 days of unused annual paid leave must be paid."
3) Defendant 2 filed a complaint with the Uijeongbu District Office of the Central Regional Employment and Labor Administration, alleging that she had not been paid allowance for 11 days of annual paid leave, among other things, from the Plaintiff. Following guidance from a labor inspector, the Plaintiff paid Defendant 2 KRW 717,150 as allowance for 11 days of annual paid leave.
B. 1) The Plaintiff argues that the Explanatory Materials at Issue, which state that an employee who has entered into a one-year fixed-term employment contract accrues up to 26 days of annual paid leave, are erroneous; that Defendant 2, having already used all of the annual paid leave granted to her, is no longer entitled to claim allowance for annual paid leave; and that, nevertheless, the Plaintiff additionally paid allowance for 11 days of annual paid leave in accordance with the erroneous guidance of the labor inspector, and therefore Defendant 2 is obligated to return this amount to the Plaintiff.
2) The court below held that the maximum number of days of annual paid leave to be granted to an employee who has entered into a one-year fixed-term employment contract is 11 days, and determined that Defendant 2, having already used 15 days of annual paid leave, is obligated to return to the Plaintiff the unjust enrichment of KRW 717,150 together with damages for delay. As to this, Defendant 2 argues, as grounds of appeal, that, as stated in the Explanatory Materials at Issue, an employee who has entered into a one-year fixed-term employment contract accrues up to 26 days of annual paid leave.
3) The issue in this case is the maximum number of days of annual paid leave to be granted to an employee who has entered into a one-year fixed-term employment contract.
2. As to Defendant 2's Grounds of Appeal
A. The Number of Days of Annual Paid Leave Granted to an Employee Who Has Entered into a One-Year Fixed-Term Employment Contract
1) Under the Labor Standards Act (근로기준법), an employer must grant 15 days of annual paid leave to an employee who has worked at least 80% of the days in one year (Article 60, Paragraph 1), and must also grant one day of paid leave for each month of perfect attendance to an employee whose period of continuous service is less than one year or who has worked less than 80% of the days in one year (Article 60, Paragraph 2).
The right to use annual paid leave, or the right to claim allowance for annual paid leave, naturally arises when an employee provides labor while satisfying the attendance rate requirement in the preceding year, and corresponds to compensation for the labor provided during the preceding one-year period, not the year in which the annual paid leave is to be used. The paid annual leave prescribed in Article 60, Paragraph 1 of the Labor Standards Act is granted to an employee who has worked at least 80% of the days in one year; where the employee, having acquired the right to annual paid leave, fails to use the annual paid leave within one year, or is no longer able to use the annual paid leave due to retirement or other reasons before the one year elapses, the employee may claim allowance for annual paid leave, which is wages corresponding to the number of days of annual paid leave, from the employer (see, e.g., Supreme Court Decision 2014Da232296, 232302 rendered on May 17, 2017). However, the right to use annual paid leave arises, absent any special provision otherwise, on the day following the completion of one year of labor in the preceding year; therefore, where the employment relationship has terminated due to retirement or other reasons prior to that point, the employee may not claim allowance for annual paid leave as compensation for the right to use annual paid leave (see Supreme Court Decision 2016Da48297 rendered on June 28, 2018).
2) It should be held that an employee who has entered into a one-year fixed-term employment contract is granted a maximum of 11 days of annual paid leave. The reasons are as follows.
A) The Labor Standards Act, as amended by Act No. 15108 on November 28, 2017 and effective from May 29, 2018, deleted the provision that had been set forth in Article 60, Paragraph 3 of the former Labor Standards Act, which read: "Where an employer grants paid leave for an employee's labor during the first year, such leave shall be 15 days, including the leave under Paragraph 2, and where the employee has already used the leave under Paragraph 2, the number of days of leave so used shall be deducted from the 15 days." The reason for this amendment was to delete the provision that deducted the leave used during the first year of employment from the paid leave for the following year, so as to allow an employee to receive a maximum of 11 days of paid leave in the first year and 15 days of paid leave in the second year, respectively. This amendment was intended to prevent a reduction in the annual paid leave for the following year in cases where annual paid leave was used during the first year, and therefore it cannot be concluded, on this basis, that Paragraph 2 and Paragraph 1 of Article 60 are cumulatively applied to an employee who has provided labor for only one year.
B) In the case of an employee who has entered into an employment contract for a fixed term, it is a general principle that the employee's status as such naturally terminates upon the expiration of that term (see Supreme Court Decision 2005Du5673 rendered on February 24, 2006). As noted above, the right to use annual paid leave arises, absent any special provision otherwise, on the day following the completion of one year of labor in the preceding year; therefore, where the employment relationship has terminated due to retirement or other reasons prior to that point, the employee may not claim allowance for annual paid leave as compensation for the right to use annual paid leave. In Defendant 2's case, the employment relationship with the Plaintiff terminated upon the passing of her last day of work, July 31, 2018, and since she was no longer in the status of an employee on the following day, August 1, 2018, it is reasonable to hold that she may not claim allowance for annual paid leave as compensation for the right to use annual paid leave under Article 60, Paragraph 1 of the Labor Standards Act.
C) If, as Defendant 2 argues, both Paragraph 2 and Paragraph 1 of Article 60 of the Labor Standards Act were to apply to an employee who has entered into a one-year fixed-term employment contract, the conclusion would be reached that a total of 26 days of annual paid leave would be granted—11 days under Paragraph 2 plus 15 days under Paragraph 1. However, Article 60, Paragraph 4 of the Labor Standards Act provides that "the total number of days of leave, including added leave, shall be limited to 25 days." Under Defendant 2's argument, an employee who has entered into a one-year fixed-term employment contract would be granted leave exceeding 25 days, which is the number of days of leave granted to an employee with long-term continuous service; this not only exceeds the scope of interpretation permitted by the language of Article 60, Paragraph 4 of the Labor Standards Act concerning annual paid leave, but also results in giving an employee who has entered into a one-year fixed-term employment contract more favorable treatment than an employee with long-term continuous service, which is contrary to the principle of equity.
D) Considering that the right to use annual paid leave, or the right to claim allowance for annual paid leave, naturally arises when an employee provides labor while satisfying the attendance rate requirement in the preceding year, and corresponds to compensation for the labor provided during the preceding one-year period, not the year in which the annual paid leave is to be used, and considering the purpose of the annual paid leave system, which is to provide an employee who has attended work for a certain period with an opportunity for mental and physical rest by exempting the employee, with pay, from the obligation to work for a certain period, and to promote the improvement of cultural life, it is reasonable to interpret Article 60, Paragraph 1 of the Labor Standards Act as meaning that 15 days of paid leave must be granted in the second year on the premise that an employee who has worked at least 80% of the days during the first year maintains the employment relationship into the following year. In other words, Article 60, Paragraph 1 of the Labor Standards Act does not apply to an employee who has entered into a one-year fixed-term employment contract and whose employment relationship no longer continues upon the expiration of the one-year contract term.
B. As to This Case
The court below determined that, since the right to use annual paid leave prescribed in Article 60, Paragraph 1 of the Labor Standards Act arises, absent any special provision otherwise, on the day following the completion of one year of labor in the preceding year, Defendant 2, whose period of employment was one year, may not claim allowance for annual paid leave as compensation for the right to use annual paid leave prescribed in Article 60, Paragraph 1 of the Labor Standards Act, and that only Article 60, Paragraph 2 of the Labor Standards Act applies to Defendant 2.
Examining the reasoning of the judgment below in light of the legal principles set forth above, there is no error in the judgment below, as alleged in Defendant 2's grounds of appeal, in violating the rules of logic and experience so as to exceed the limits of the principle of free evaluation of evidence, or in misunderstanding the legal principles concerning annual paid leave.
3. As to the Plaintiff's Grounds of Appeal
The court below determined that, although it was not reasonable for Defendant Republic of Korea to have interpreted that, for a fixed-term employee with a one-year employment contract period, Article 60, Paragraphs 1 and 2 of the Labor Standards Act are cumulatively applied so that up to 26 days of annual paid leave, or allowance for unused leave, must be granted, the evidence submitted and the circumstances alleged by the Plaintiff are insufficient to establish that Defendant Republic of Korea's preparation and distribution of the Explanatory Materials at Issue and the guidance provided by its labor inspector, based on such interpretation, involved intent or negligence, and there is no other evidence to establish this; therefore, the Plaintiff's claim for damages against Defendant Republic of Korea is without merit.
Examining the reasoning of the judgment below in light of the relevant legal principles and the record, there is no error in the judgment below, as alleged in the Plaintiff's grounds of appeal, in violating the rules of logic and experience so as to exceed the limits of the principle of free evaluation of evidence, or in misunderstanding the legal principles concerning the intent, negligence, and illegality of public officials.
The Plaintiff also appealed against Defendant 2, but neither the petition of appeal nor the appellate brief contains any specific grounds of appeal in that regard.
4. Conclusion
Therefore, all appeals are dismissed, and the costs of appeal shall be borne by the respective losing parties. This Judgment is rendered as stated in the Order by the unanimous opinion of the Justices participating in the adjudication.
Justice Lee Dong-won (Presiding Justice), Cho Jae-yeon (Justice in Charge), Min Yu-sook, Cheon Dae-yeop