[Plaintiffs, Appellees] Plaintiff 1 and 14 others (Law Firm Jinsung, Attorneys Nam Seong-uk and 1 other, Counsel for the Plaintiffs)
[Defendant, Appellant] ○○ Transportation Co., Ltd. (Jipyong Law Firm (LLC), Attorneys Kwon Chang-young and 1 other, Counsel for the Defendant)
[Judgment Below] Seoul Southern District Court Decision 2022Na63971 rendered on February 7, 2025
[Order]
The part of the judgment below against the Defendant is reversed, and this part of the case is remanded to the Seoul Southern District Court.
[Reasoning] The grounds of appeal are examined.
1. Relevant Legal Principles
An employee bears the duty to work during the agreed working hours, and the employer must pay wages for the performance of such duty to work. In principle, the employer and employee may freely agree on the prescribed working hours (소정근로시간) as long as they do not exceed the statutory standard working hours. However, where the determination of the prescribed working hours can be assessed as merely a matter of form, or where there exist special circumstances such that the prescribed working hours were set with the intent of evading mandatory statutory provisions such as labor relations statutes, the effect of the agreement as to the prescribed working hours must be denied.
Considering comprehensively the content and structure of Article 32(1) of the Constitution (헌법) and the relevant provisions of the Minimum Wage Act (최저임금법), the legislative intent and legislative history of Article 6(5) of the Minimum Wage Act as amended by Act No. 8964 on March 21, 2008 (hereinafter “the special provision at issue”), the purport of the provisions of the Passenger Transport Service Act (여객자동차 운수사업법), and the public nature of the general taxi transportation business, etc., where, under a fixed-quota deposit system (정액사납금제), an employer, intending to avoid the fixed wage (excluding wages calculated based on production) falling short of the minimum wage, agrees with the taxi drivers’ labor union to shorten only the prescribed working hours—without any change in the actual work pattern or operating hours—for the purpose of increasing the nominal amount of the hourly fixed wage calculated on the basis of the prescribed working hours, such agreement must be deemed void as an unlawful act intended to evade the application of the mandatory special provision at issue (see Supreme Court en banc Decision 2016Da2451 rendered on April 18, 2019, etc.). The specific circumstances establishing that such an agreement constitutes an unlawful evasive act must be proven by the party asserting that the agreement is void (see Supreme Court Decision 2023Da279402, 280563 rendered on May 30, 2024, etc.).
2. Judgment of the Court Below
The court below determined, for the reasons stated in its judgment, that the agreement to shorten the prescribed working hours under the 2017 wage agreement constituted an unlawful evasive act intended to evade the application of the mandatory special provision under the Minimum Wage Act, and was therefore void.
3. Judgment of the Supreme Court
A. Examining the reasoning of the judgment below in light of the relevant legal principles and the record, the judgment of the court below is difficult to accept, for the following reasons.
1) The wage agreement applicable to the Defendant’s labor and management around 2009 set the prescribed working hours at 6 hours and 40 minutes per day (40 hours per week). Although the special provision took effect in Seoul Metropolitan City, where the Defendant is located, on July 1, 2009, the Defendant’s labor and management did not shorten the prescribed working hours in the 2013 wage agreement even after the special provision at issue took effect, and such prescribed working hours remained unchanged until the 2015 wage agreement was concluded.
2) The prescribed working hours were shortened by only 40 minutes, from the previous 6 hours 40 minutes to 6 hours, under the 2015 wage agreement, and no further shortening occurred for approximately two years thereafter until an additional one-hour reduction was made through the 2017 wage agreement. In the end, over the approximately eight years since the special provision at issue took effect, the prescribed working hours were shortened by a total of 1 hour and 40 minutes, and the cumulative rate of reduction (25%) cannot be regarded as particularly high.
3) On April 13, 2017, Seoul Metropolitan City (Taxi and Logistics Division, Urban Transportation Headquarters) issued a press release stating that, due to the increase in taxi fares, the average daily revenue per corporate taxi vehicle had increased, the operating distance and revenue per trip had also increased, and the passenger occupancy rate (the ratio of time a taxi actually carries a passenger while moving) had likewise risen. Accordingly, there exists a possibility that the agreement to shorten the prescribed working hours at the time of the 2017 wage agreement was reached due to such actual changes in the working conditions of taxi drivers.
4) Considering the timing and extent of the reduction in the prescribed working hours, the possibility of actual changes in working conditions, and the resulting possibility that the agreement to shorten the prescribed working hours was reached accordingly, it is difficult to conclude, based solely on the circumstances stated by the court below, that the 2017 agreement to shorten the prescribed working hours constituted an unlawful evasive act and was therefore void.
B. Nevertheless, the court below, for the reasons stated in its judgment, deemed the 2017 agreement to shorten the prescribed working hours void, and calculated the amount of unpaid minimum wage and unpaid retirement allowance that the Defendant must pay to the Plaintiffs based on the prescribed working hours set forth in the 2015 wage agreement. Such judgment of the court below contains an error in violating the principles of logic and experience, thereby exceeding the limits of free evaluation of evidence, or in misunderstanding the legal principles concerning the criteria for determining the validity of an agreement to shorten prescribed working hours.
4. Conclusion
Without examining the remaining grounds of appeal, the part of the judgment below against the Defendant is reversed, and this part of the case is remanded to the court below for further hearing and determination. This Judgment is rendered with the unanimous consent of the participating Justices, as set forth in the Order.
Justice Eom Sang-pil (Presiding Justice), Oh Kyung-mi (Justice in charge), Kwon Young-jun, Park Young-jae