Although there is no direct provision on this, Article 11 of the Act does not provide for the method and limit of general cost sharing in relation to the exercise of sales promotion, while Article 12 of the Act provides for the method and limit of general cost sharing in relation to the case of allowing dispatched employees to engage in the business of selling and managing goods. Rather, Article 12(1)1 of the Act does not limit the ratio of cost sharing, such as the cost sharing of dispatched employees. Rather, Article 12(1)1 of the Act provides for the requirements for large franchise and retail business operators to bear the whole cost and receive the dispatch of employees, and subparagraphs 2 through 4 of Article 12 of the Act provides for the premise that suppliers, etc. shall bear the cost. In the case of subparagraphs 2 through 4 of the Act, if a large franchise and retail business operator tried to limit the burden of expenses pursuant to Article 11 of the Act, it is natural that Article 11 of the Act applies to dispatching employees, as well as Article 12 of the Act does not provide for the same Act in a case of dispatching employees. In addition, Article 12 of the Act does not apply if it overlaps with the other party.

Therefore, in a case where a large franchise and retail business operator meets all the requirements for dispatch of employees under Article 12(1)2 through 4 of the Act, it is allowed to allow a dispatched employee to engage in the business of sales promotion of goods and to bear all of the personnel expenses for dispatched employees as a supplier, etc. In such a case, unless a large franchise and retail business operator bears the expenses for sales promotion other than the personnel expenses for dispatched employees, unless he/she bears the expenses to the supplier, etc., it does not constitute a violation of Article 11(2) of the Act because he/she did not separately enter into a written agreement with the supplier, etc., or that the supplier, etc. bears the personnel expenses for dispatched employees in excess of the share ratio under Article 11(3)

1. According to Article 11 of the Act on Fair Transactions in Large Franchise and Retail Business (hereinafter “Act”), if a large franchise and retail business operator intends to bear expenses incurred in a sales promotional event (hereinafter “sales promotional expense”), he/she shall enter into an agreement with a supplier, etc. as prescribed by Presidential Decree before conducting a sales promotional event (hereinafter “sales promotional expense”). The agreement shall be made in writing signed or sealed by a large franchise and retail business operator, a supplier, etc., and a large franchise and retail business operator shall deliver a document thereof to a supplier, etc. at the same time as the agreement is entered into. The share ratio of sales promotional expenses under the agreement shall be determined in accordance with the ratio of economic gains that a large franchise and retail business operator and a supplier, etc. are expected to directly obtain through the relevant sales promotional event (hereinafter “e.g., gains”). The share ratio of sales promotional expenses for a supplier, etc. shall not exceed 50/100 (paragraph 4).

Meanwhile, Article 12 of the Act provides that a large franchise and retail business operator shall not have a supplier, etc. be dispatched to employees or other human resources employed by the supplier, etc. (hereinafter “employee, etc.”) and shall not have them work at his/her workplace (the main sentence of paragraph (1)): Provided, That the same shall not apply to any of the following cases where a supplier, etc. agreed in writing with the supplier, etc. on dispatch terms and conditions as prescribed by Presidential Decree and allow the supplier, etc. who employs the dispatched employee, etc. to engage in the sales and management of the goods supplied by the supplier, etc. (the proviso to paragraph (1)). In addition, subparagraph 1 thereof provides that “Where a large franchise and retail business operator, etc. bears all the expenses including personnel expenses of the dispatched employee, etc., as prescribed by Presidential Decree,” subparagraph 2 provides that “Where a supplier, etc. requests a large franchise and retail business operator, etc. to dispatch employees, etc. employed by him/her voluntarily in accordance with objective and specific form and basis for calculation of the expected profit and expenses related to the dispatch of employees.”

According to the above provisions, in cases where a large franchise and retail business operator is dispatched an employee pursuant to Article 12 (1) 1 of the Act, it is problematic that the total large franchise and retail business operator bears all expenses, such as personnel expenses of dispatched employee (hereinafter “regular employee personnel expenses”), but in cases where he/she is dispatched to an employee pursuant to subparagraphs 2 through 4 of Article 11 of the Act and had the supplier engage in the sales and management of goods for the promotion of sales under Article 11 of the Act, whether the supplier can bear the total personnel expenses of dispatched employee, etc. or, in such cases, whether the large franchise and retail business operator should share at least 50/100 of the total personnel expenses of dispatched employee.

Although there is no direct provision on this, Article 11 of the Act does not provide for the method and limit of general cost sharing related to the exercise of sales promotion, while Article 12 of the Act provides for the method and limit of general cost sharing in relation to the case of allowing dispatched employees to engage in the sales and management of goods. Rather, Article 12(1)1 of the Act does not limit the ratio of cost sharing, such as the cost sharing of dispatched employees. Rather, Article 12(1)1 of the Act provides for the requirements for large franchise and retail business operators to bear the whole cost and receive the dispatch of employees, and subparagraphs 2 through 4 of Article 12 of the Act provides for the premise that suppliers, etc. shall bear the cost. In the case of subparagraphs 2 through 4 of the Act, if a large franchise and retail business operator tried to limit the payment of one-half or more personnel expenses pursuant to Article 11 of the Act, it is natural to stipulate that Article 11 of the Act applies in the case of dispatching employees, as such, inasmuch as it does not meet the provision of Article 12 of the Act.

Therefore, in a case where a large franchise and retail business operator meets all the requirements for dispatch of employees under Article 12(1)2 through 4 of the Act, it is permissible to allow a dispatched employee to engage in sales promotional activities of goods and to bear all of the personnel expenses for dispatched employees by a supplier, etc. In such a case, insofar as a large franchise and retail business operator does not bear the expenses incurred in sales promotional activities other than the personnel expenses for dispatched employees, so long as a large franchise and retail business operator does not separately enter into a written agreement with a supplier, etc. under Article 11(2) of the Act, or the supplier, etc. bears the personnel expenses for dispatched employees in excess of the share ratio under Article 11(3) and (4) of the Act, it does not constitute a violation of Article 11 of the Act. In such a case, the concerns that a large franchise and retail business operator may have an employee, etc. be dispatched to a supplier, etc. without permission, and in particular, in the case of subparagraph 2, the requirements under each subparagraph of Article 12(1) of the Act should be strictly construed as “written” by establishing objective and concrete requirements.

2. According to the reasoning of the lower judgment and the record, the Plaintiff concluded a written agreement on the dispatch of part and employees among the suppliers of the instant case, and dispatched employees to engage in the instant demonstration; ② According to the written agreement, personnel expenses for employees engaged in the instant demonstration were to be borne by the supplier; ③ the Plaintiff did not seem to have any circumstance that the Plaintiff had the instant supplier bear other expenses related to the instant demonstration except for the personnel expenses for employees.

Examining the above facts in light of the legal principles as seen earlier, the Plaintiff and the instant supplier, a large franchise and retail business operator, concluded a prior written agreement on the dispatch of employees on the grounds of subparagraphs 2 through 4 of Article 12(1) of the Act, and made the instant supplier bear all the expenses, including personnel expenses of dispatched employees, in accordance with the said written agreement, lawful. Therefore, if the Plaintiff, a large franchise and retail business operator, did not have the supplier, etc. bear all the expenses incurred in the remaining sales promotion events except for personnel expenses of dispatched employees, and if the Plaintiff satisfied all the other requirements under each subparagraph of Article 12(1) of the Act, the Plaintiff did not have violated Article 11 of the Act.

3. Nevertheless, on different premise, the lower court determined that the instant disposition was lawful by deeming that the Plaintiff violated Article 11 of the Act, on the premise that Article 11 (a) of the Act was separately applied even if the Plaintiff satisfied the requirements of Article 12 of the Act, on the premise that Article 12 (1) of the Act was separately applied. In so determining, the lower court erred by misapprehending the legal doctrine on the relationship between Article 11 and Article 12 of the Act and Article 12 of the Act, failing to exhaust all necessary deliberations on whether the requirements for dispatch are met, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal on this point is with merit.

4. Therefore, without examining the remaining grounds of appeal, we reverse the judgment below, and remand the case 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.

Justices Kwon Soon-il (Presiding Justice)