[2] In a case where the Korea Employment Information Service received annual management evaluation of public institutions for the business performance of the previous year pursuant to the Act on the Operation of Public Institutions, and thereafter paid internal performance-based wages calculated by “the base monthly salary for the preceding year x the payment rate for each individual annual salary grade” to its employees, and where Party A, etc., who is the employee of the Korea Employment Information Service, sought payment of the internal evaluation-based overtime pay including the internal evaluation-based overtime pay as ordinary wages, the case holding that the lower court erred by misapprehending the legal doctrine in determining that the internal evaluation-based bonus received by Party A, etc. was included in the ordinary wages for the corresponding year, even though it was determined as the time when the wages were paid for the previous year

Where a worker determines whether to pay a specified amount of wages or an amount of wages for the pertinent year according to the worker’s work performance during the pertinent year, if the payment of wages or the amount of wages for the pertinent year is fixed, the wage shall be deemed to be a fixed amount of wages for the pertinent year. However, even if the wage for which whether to pay wages or the amount of wages are determined based on the evaluation of work performance during the previous year is paid for the pertinent year, if special circumstances exist to deem that only the time when the payment was made for the previous year is set for the pertinent year, the fixed amount of wages for the previous year shall not be recognized. In this case, even if the maximum amount of wages for the work performance was paid for the pertinent year, the fixed amount of wages for the previous

[2] In a case where the Korea Employment Information Service received annual management evaluation of public institutions for the business performance of the previous year pursuant to the Act on the Operation of Public Institutions, and thereafter paid internal performance rating calculated by “the base monthly salary for the preceding year x the payment rate for each individual annual salary grade” to its employees, and where Gap et al requested the Korea Employment Information Service employees to pay internal performance rating to pay overtime work allowances including ordinary wages, the case held that according to the above payment plan, internal evaluation rating was required to pay internal evaluation rating in proportion to the number of working days for each worker in the pertinent year (referring to the previous year of the year in which the internal evaluation rating is paid), and the retired employee was paid internal evaluation rating in proportion to the number of working days for the pertinent year; in light of the circumstances where internal evaluation rating was not received in the pertinent year, the internal evaluation rating received by Gap et al. can be known to be determined for the pertinent year only at the time of payment of wages for the previous year, and the internal evaluation rating included in the ordinary wage for the pertinent year.

1. Class subsidy, monthly suspension from office, heavy food subsidy, and ordinary wage of traffic subsidy;

The lower court determined that the Defendant’s payment to the Plaintiffs constituted ordinary wages for job class allowance, monthly suspension from office, heavy food subsidy, and transportation subsidy.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine regarding ordinary wages.

2. The ordinary wages of an internal evaluation grade;

A. The lower court determined that the wage for internal evaluation was included in ordinary wages on the ground that the regular rate is recognized as the wage for a one-year period for internal evaluation pay, and that it was recognized as a rate in that it was paid to all employees, and that it was fixed in that it determined whether to pay the wage or the amount of payment during the pertinent year

B. However, the lower judgment is difficult to accept for the following reasons.

(1) The determination of whether to pay or not based on the evaluation of the work performance of a worker during the period for which the payment is to be made is generally denied as a wage for the period for which the payment is to be made. However, if the minimum amount of payment is determined, such as where a certain amount of payment is to be paid even if a certain amount of payment is paid for work performance, the minimum amount of payment can be deemed fixed.

Where a worker determines whether to pay a certain amount of wages or an amount of wages for the pertinent year according to the worker’s work performance during the pertinent year, if the payment of the wages or the amount of the wages is fixed in the pertinent year, the wages shall be deemed to fall under a fixed amount of wages for the pertinent year. However, even if the wage based on the evaluation of work performance during the previous year is determined in the pertinent year, if special circumstances exist to deem that only the time when the payment was made for the previous year was made, the fixed amount of wages for the previous year may not be recognized. In this case, even if the maximum amount of wages for the work performance is granted, the fixed amount of wages for the previous year may be deemed to fall under a certain amount of wages for the previous year (see Supreme Court en banc Decision 2012Da89399, Dec. 18, 2013).

(2) According to the reasoning of the lower judgment and the record, the following circumstances are revealed.

(A) The Defendant received management evaluation of the public institution’s business performance in the previous year every year in accordance with the Act on the Management of Public Institutions. The Defendant, on June of each year, made “the Government’s notification of the results of the management performance evaluation and subsequent measures of the public institution,” thereby making “the plan for the payment of the reserve fund and self-performance (internal evaluation)” (hereinafter “payment plan”) and paid the employee’s management evaluation performance and internal evaluation wage to the employees under its control during the seven to eight months following the labor-management consultation and the resolution of the board of directors.

(B) In accordance with a payment plan (draft), the Defendant determined the amount of internal performance rating as “monthly salary for the preceding year x the payment rate according to individual annual salary grade”. From 2012 to 2014, the “payment rate according to individual annual salary grade” was determined as S Grade 134%, Grade A 117%, Grade B 100%, Grade C 83%, and Grade D 66%. From 2015, the amount was determined as Grade A 150%, Grade A 110%, Grade B 10%, Grade C 90%, Grade C 50%, and Grade D 50%.

(C) According to the payment plan, the internal evaluation wage was required to be paid in proportion to the number of days worked for the year in which the internal evaluation wage is paid to each employee (referring to the year preceding the year in which the internal evaluation wage is paid). Accordingly, the retired employee is paid an internal evaluation wage in proportion to the number of working days in the previous year, but the employee who entered the pertinent year did not receive the internal evaluation wage in the pertinent

(3) Examining the above factual basis in light of the legal principles as seen earlier, it can be known that the internal evaluation pay received by the Plaintiffs was set for the pertinent year only when the payment was made for the previous year. Nevertheless, the lower court determined that the internal evaluation pay was included in the ordinary wage for the pertinent year. In so doing, the lower court erred by misapprehending the legal doctrine regarding the ordinary wage, thereby adversely affecting the conclusion of

3. Scope of reversal

Of the part against the Defendant in the lower judgment, there is reason to reverse the part regarding the claim for overtime allowance calculated by recognizing the internal evaluation rate as ordinary wage in the pertinent year. Since the lower court ordered the payment of overtime allowance, including other wage items recognized as internal evaluation rate and ordinary wage, it is necessary to calculate the amount of overtime allowance again in light of the above reasons for reversal, and thus, the part against the Defendant should be reversed

4. Conclusion

The Defendant’s appeal is with merit, and this part of the judgment below against the Defendant is reversed, and remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment] List of Plaintiffs: Omitted

Justices Lee Dong-won (Presiding Justice)