[Plaintiffs, Appellees] Plaintiff 1 and 52 others (as listed in the attached list of plaintiffs) (Attorneys for the Plaintiffs: Law Firm Woorilaw, Attorney Ju Gyu-hwan and 3 others)
[Defendant, Appellant] Gangnam-gu, Seoul Metropolitan City (Attorney for the Defendant: Bareun Law Firm LLC, Attorney Park Chang-ryeol)
[Judgment Below] Seoul High Court Judgment, January 26, 2021, Case No. 2017Na2074697
[Order]
All appeals are dismissed. The costs of the appeal shall be borne by the Defendant.
[Reasoning]
The grounds for appeal are examined as follows.
1. Whether the bonuses at issue, to which attendance rate conditions and continued-employment conditions are attached, constitute ordinary wages (Grounds for Appeal Nos. 1, 2, and 3)
A. Legal principles regarding ordinary wages
Article 6(1) of the Enforcement Decree of the Labor Standards Act (근로기준법 시행령) defines ordinary wages as "the hourly wage, daily wage, weekly wage, monthly wage, or piece-rate wage determined to be paid regularly and uniformly to a worker for prescribed work or total work." Interpreting the concept of ordinary wages faithfully to the definition and purpose of the statute, ordinary wages refer to wages that are determined to be paid regularly and uniformly as consideration for prescribed work. Where a wage is determined to be paid regularly and uniformly as consideration for a worker's full provision of prescribed work, such wage constitutes ordinary wages regardless of the existence of any condition attached thereto or the likelihood of its fulfillment. A condition attached to a wage may be considered as one of the factors negating the wage's character as consideration for prescribed work, or its regularity and uniformity, in the course of substantively determining the objective nature of the wage; however, the mere fact that the fulfillment of the condition is uncertain cannot be deemed to negate the wage's status as ordinary wages.
Since ordinary wages are a conceptual tool reflecting the value of prescribed work as distinguished from actual work performed, they must be calculated based on an employment relationship premised on the continuous provision of prescribed work. A worker's continued employment is a natural precondition for providing prescribed work under the employment contract. Therefore, the mere fact that a wage is subject to a condition requiring the worker to be employed at a specific point in time in order to receive the wage does not negate the wage's character as consideration for prescribed work or its status as ordinary wages (see Supreme Court en banc Decision 2020Da247190, decided December 19, 2024).
Even where a wage is subject to a condition requiring a certain number of working days to be met before payment, if such condition is one that would be satisfied by a worker who fully provides the prescribed work—that is, a working-days condition set within the number of prescribed working days—the mere fact that such condition is attached does not negate the wage's status as ordinary wages. Even if a worker's actual number of working days falls short of the number of prescribed working days such that the worker fails to receive the wage conditioned on working days, so long as the wage possesses regularity and uniformity as consideration for prescribed work, it must be included in ordinary wages when calculating statutory allowances for extended, night, and holiday work. This is because ordinary wages constitute a standard wage determined to reflect the value of prescribed work, regardless of the actual number of working days or the wages actually received (see Supreme Court en banc Decision 2023Da302838, decided December 19, 2024).
B. Factual findings
According to the reasoning of the judgment below and the record, the following facts may be found.
1) In a lawsuit brought by environmental sanitation workers employed by Mapo-gu, Seoul Metropolitan City against Mapo-gu, Seoul Metropolitan City, in which the workers claimed that year-end allowances, physical fitness allowances, and holiday allowances, among others, constituted ordinary wages and sought payment of the difference in overtime allowances calculated by including such items in ordinary wages, the Supreme Court rendered and finalized Decision 2011Da17076, dated August 25, 2011, holding that year-end allowances, physical fitness allowances, holiday allowances, and the like, which are paid at regular intervals in amounts equivalent to a fixed multiple of the base pay and the like, constitute ordinary wages.
2) After the above precedent Supreme Court decision was rendered, the Mayor of Seoul Metropolitan City, who had been delegated authority by each autonomous district (Gu) of Seoul Metropolitan City, including the Defendant, and the labor union in this case, to which the environmental sanitation workers, including the Plaintiffs, belonged, agreed through the 2012 collective agreement to attach a condition requiring a certain attendance rate to be met with respect to year-end allowances, long-service allowances, physical fitness allowances, and holiday allowances (hereinafter referred to as "the bonuses at issue") (no payment if the attendance rate is below 50%; differential payment according to attendance rate if the attendance rate is between 50% and 90%).
3) Thereafter, the Mayor of Seoul Metropolitan City and the labor union in this case, through the 2014 collective agreement, added a condition to the bonuses at issue that "the recipients shall be limited to those who are employed as of the date of payment."
C. Judgment of the court below
The court below, for the reasons stated in its judgment, held that the agreement attaching the attendance rate condition was invalid and that the continued-employment condition could not be recognized, and accordingly determined that the bonuses at issue constituted ordinary wages.
1) The agreement attaching the attendance rate condition is not substantially different from an agreement to exclude the bonuses at issue—which by their nature should be included in ordinary wages—from ordinary wages, and constitutes a collective agreement disadvantageously altering working conditions that markedly lacks reasonableness and must therefore be deemed invalid.
2) In light of the actual wage payment practices, the wording of the 2014 collective agreement alone is insufficient to find that a continued-employment condition—under which even a person who had already provided work would not be paid unless employed at a specific point in time—was attached to the bonuses at issue.
D. Judgment of the Supreme Court
1) Examining the above facts in light of the legal principles set forth above, the bonuses at issue, which are paid in fixed amounts determined in linkage with the base pay and the like, divided and paid at regular intervals, constitute ordinary wages paid regularly and uniformly as consideration for prescribed work, even where an attendance rate condition requiring attendance for fewer working days than the number of prescribed working days, or a continued-employment condition, is attached thereto.
This being the case, the bonuses at issue still constitute ordinary wages regardless of whether the attendance rate condition is attached; therefore, it cannot be concluded that the agreement attaching the attendance rate condition is substantially the same as an agreement excluding the bonuses at issue from ordinary wages, and it is difficult to find the said agreement invalid based solely on the reasons cited by the court below.
2) The ground for appeal disputing the existence of the continued-employment condition merely challenges the fact-finding court's selection of evidence and evaluation of its probative value, matters that fall within the free evaluation of evidence by the court of fact, and is therefore difficult to accept. Furthermore, even upon examination, in light of the legal principles set forth above, the mere fact that a continued-employment condition is attached cannot be deemed to negate the character of the bonuses at issue as consideration for prescribed work or their status as ordinary wages.
3) Although the portion of the judgment below that presupposed fixedness as a conceptual indicium of ordinary wages and held the attendance rate condition invalid is inappropriate, the conclusion recognizing the bonuses at issue as ordinary wages is justified. There is no error in the judgment below that misapprehended the legal principles regarding ordinary wages and thereby affected the conclusion of the judgment.
2. Whether the commuting allowance and safety training allowance constitute ordinary wages (Ground for Appeal No. 4)
The court below, for the reasons stated in its judgment, determined that the commuting allowance and safety training allowance constitute ordinary wages. Upon examination in light of the relevant legal principles and the record, the above determination of the court below is justified, and there is no error, as alleged in the grounds for appeal, in misapprehending the legal principles regarding ordinary wages that affected the conclusion of the judgment.
3. Conclusion
All appeals are dismissed, and the costs of the appeal shall be borne by the losing party. This judgment is rendered as stated in the Order by the unanimous opinion of the Justices involved.
[Attachment] List of Plaintiffs: Omitted
Justice Shin Suk-hee (Presiding Justice), Justice Noh Tae-ak (Justice in charge), Justice Seo Kyung-hwan, Justice Noh Kyung-pil