[2] In a case where Party A, while serving as the chairman of the trade union of Party B and was dismissed, received KRW 4750 million in total from the trade union as living expenses, etc. under five years and four months in accordance with the Guarantee of Status of the trade union, and the tax authority imposed global income tax on Party A, the case holding that the above amount cannot be deemed as money of a simple nature of mutual aid in light of the motive and purpose of payment, relationship between the payer parties, and amount, etc.

1. Article 21(1)17(a) of the Income Tax Act provides as one of the other income refers to the money and valuables provided as a means of a case in connection with administrative affairs or provision of services, etc., and whether it constitutes such money and valuables ought to be determined by comprehensively taking into account the motive and purpose of receiving the relevant money and valuables, relationship with the other party, amount, etc. (see Supreme Court Decision 2010Du27288, Sept. 13, 2013, etc.).

2. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following facts.

A. The Plaintiff was in office as the chairperson of the NCC (hereinafter “instant trade union”)’s working group composed of the employees of the NCC (NCC) company and was dismissed from office on January 2, 2007. The Plaintiff was in office as the chairperson of the instant trade union until October 2007. From January 201 to May 2012, 209, the Plaintiff was in office as the head of the whole south branch of the National Union of Chemical Textiles Industry Trade Union, which is the industrial associated organization of the instant trade union, and from January 2010 to May 2012, 200 each of them was in office as the head of the sub-branch of the National Union of Democratic Trade Union of Korea, the superior organization of the instant trade union.

B. The instant trade union has a provision on the status guarantee in order to protect the pertinent union members and minimize their mental and economic damage by paying the amount of living expenses or property losses to the union members who have suffered disadvantages in their status or property due to union activities, and the main contents are as follows.

(1) The instant provision on the status guarantee provides for the criteria for compensation, such as living expenses, keeping in custody, attorney’s expenses, amount equivalent to fines, and medical expenses, for the detained (retained) (Article 8), flooders (Article 9), dismissed (Article 10), fine recipients (Article 11), and injured (Article 13). The subject of compensation is limited to “any member who has suffered disadvantage in his/her status and property during his/her cooperative activities and is making efforts to reinstate to the original state,” and the subject of compensation is required to pass a resolution for the representative competition (Article 5 and 6). Meanwhile, Article 12 of the instant provision on the status guarantee provides for the criteria for compensation, such as funeral expenses and consolation money, for the deceased member who died due to an unforeseen accident during cooperative activities. Here, the subject of compensation is not limited as above, and there is no special procedure for the payment thereof.

(2) Article 10 of the Guarantee of Employment (hereinafter “Guarantee Regulations”), which provides the criteria for compensation for dismissal, stipulates that “the persons who, as relevant persons of Article 4, attend the labor union and other designated places, faithfully conduct union activities, and bring legal action,” shall be eligible for living expenses. The amount paid shall be 100% of ordinary wages calculated by aggregating the basic pay, regular bonus, and various allowances paid by the company, and the rate of increase in salary and wage. The method of calculating the amount shall also be the same as the criteria for compensation, such as living expenses for the detained and the trainees.

(3) The living expenses, etc. under the instant provision on the Guarantee of Status are the financial resources of the Guarantee Fund. In principle, the Guarantee Fund is operated at 50% of the regular reserve. However, in a case where the shortage of the Fund is anticipated, special charges may be imposed on a six-month or one-year basis by a resolution of the board of representatives (Article 15). On the other hand, consolation benefits for dead persons shall be collected by deducting KRW 100,000 per each member from the benefits (Article 12).

(4) Where a member who received living expenses receives lump sum compensation from the company after having received a favorable judgment on the invalidity of dismissal, he/she shall refund the full amount of the living expenses already received to the trade union of this case within one month, and where he/she received compensation under an agreement with the company, he/she shall refund the smaller amount between the amount paid by the trade union of this case and the amount compensated by the company (Article 16).

C. Article 60(2) of the Rules on the Operation of the Branch of the instant trade union provides that a special fund of 0.5% of the basic salary shall be imposed on the members for a limited period of time to raise a guarantee fund for the status of the dismissed.

D. The Plaintiff received totaling KRW 475,866,00 (hereinafter “the instant money”) from the instant trade union from January 2, 2007 to May 201, 201 in accordance with the instant provision on the status guarantee from around January 2007, under the pretext of living expenses, etc.

3. Examining the following circumstances revealed through such factual basis in light of the legal principles as seen earlier, it is reasonable to view that the instant money constitutes one of the other income rewards when comprehensively taking into account the motive and purpose of payment, relationship between the parties to the payment, amount, etc.

A. The instant money is paid to the dismissed and his family members who suffered disadvantage through partnership activities in order to guarantee the previous living standards. The method of calculating that amount is specified in advance in full amount of wages received from the company prior to dismissal. In addition, for the payment, a representative competition resolution is required, and where the dismissed receives a lump-sum compensation from the company after receiving a favorable judgment that invalidated dismissal, it is obligated to refund that amount. In this regard, it is difficult to view that the instant money falls under the benefits received by providing labor.

B. The instant provision on the guarantee of status limits the number of members who suffered disadvantage in their status and property during the union activities. If we look at the calculation method and specific payment procedure of the aforementioned amount, it can be understood that the instant trade union’s motive or purpose of paying living expenses, etc. to dismissed workers, etc. including the instant money is not only to have engaged in the leading association activity but also to have contributed to the instant trade union after dismissal, in the case of activities related to the instant trade union, from the standpoint of the instant trade union, the purpose of the instant trade union’s act is to ensure the level of living like the previous trade union by paying the money to the relevant union after the dismissal. Furthermore, the instant trade union may actively encourage union activities by preparing the funds in the form of such a provision on the guarantee of status in the form of such a provision on the guarantee of status and setting up the regular reserve for which the members bear regularly the funds required for the guarantee of status and the special dues imposed on six months or one year basis.

C. The instant money was paid KRW 7,430,00 in monthly average over five years and four months, and the total amount was KRW 475,500,000. In light of the payment period and amount, it is reasonable to view that the instant money was merely money of the nature of mutual aid, and that it was paid as a case in consideration of cooperative activities, etc.

4. Nevertheless, the lower court determined that the instant money cannot be deemed as one of other income as an honorarium for reasons inconsistent with its reasoning. Therefore, the lower court erred by misapprehending the legal doctrine on honorarium, and the allegation contained in the grounds of appeal on this point is with merit.

5. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)