[2] In a lawsuit disputing the appeal court for unfair dismissal due to layoff, the person who bears the burden of proof as to the requirements for layoff including the legitimacy of layoff (=employer)

1. Imminent managerial necessity, among the requirements for layoff, is not necessarily limited to cases where corporate bankruptcy is avoided, and includes cases where personnel reduction is necessary to cope with future crisis, but such reduction of personnel should be recognized as reasonable from an objective perspective (see Supreme Court Decision 2001Da29452 delivered on July 9, 2002).

In addition, efforts to avoid dismissal among the requirements for layoff refers to the rationalization of management policies and work methods, prohibition of new employment, utilization of temporary retirement and voluntary retirement, transfer of work, etc. that an employer takes all possible measures to minimize the scope of dismissal (see Supreme Court Decisions 92Da14779 delivered on December 22, 1992; 9Du202 delivered on April 27, 199). The method and degree of such measures vary according to the degree of the management crisis of the relevant employer, the managerial reasons for which the layoff should be conducted, the contents and scale of the business, and the number of employees by class, etc. (see Supreme Court Decision 2003Du11339 delivered on January 15, 2004).

On the other hand, in the case of a lawsuit disputing the adjudication tribunal on relief against unfair dismissal under Article 31 of the Labor Standards Act, the burden of proof on the legitimacy of dismissal is borne by the employer who asserts it (see Supreme Court Decision 99Du202 delivered on April 27, 199), and in the case of layoff, the employer must prove all the requirements for layoff, including the legitimacy of layoff.

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

(1) The grounds for layoff of the Plaintiff’s Intervenor’s Intervenor

① The Plaintiff, a corporation that employs 1,200 full-time workers and operates securities trading business, etc., carried out self-helping measures to reduce costs, such as reducing welfare systems, following the aggravation of business management conditions around 2012, and began to reduce the number of workers through the reduction of new employment, voluntary retirement, transfer of affiliates, etc.

② In spite of the above efforts, the Plaintiff, despite its continuous aggravation of management conditions, set up a plan for restructuring human resources, including large-scale reduction sources through layoffs, etc. in 2013, and determined that it is necessary to reduce the total amount of 450 members for this purpose.

③ The Plaintiff elected the workers members of the labor-management council in accordance with the procedure for the establishment of the labor-management council, and agreed on the specific contents of the plan for management normalization, the scale of layoffs, the criteria and procedure for selecting those subject to layoffs, etc., by holding a labor-management council over a total of 12 times from October 30, 2013 to December 30, 2013. In the process of the labor-management negotiations, the Plaintiff decided the final reduction goal on December 2, 2013 following the revision process.

④ On December 30, 2013, the 12th Labor-Management Council, which was held on December 30, 2013, finalized and publicly announced the criteria for selection of the recipients of the final layoffs according to the contents of the consultation, and selected and notified 34 persons subject to layoffs according to the criteria for selection of those subject to the final layoffs. Of them, on January 3, 2014, the Plaintiff conducted a layoff on February 9, 2014 (hereinafter referred to as “instant layoffs”), including 27 persons who applied for voluntary layoffs.

(2) Data on the current status of employees at the time of the instant layoff

① According to the Plaintiff’s data on the current status of employees among the business reports publicly announced by the Plaintiff in the Financial Supervisory Service, the total number of full-time employees as of September 30, 2013 is 1,455 and the total number of full-time employees as of December 31, 2013 is 1,114, and the total number of full-time employees as of December 31, 2013 is 341 (1,455 - 1,114) and the number of converted employees who were reduced during the same period is 14.

② With the exception of the list of human resources restructuring prepared by the Plaintiff after the completion of the human resources restructuring of the instant case, there are no records suggesting that only 343 remaining 35 persons, including 350 participants, have been automatically reduced, except for the 350 final reduction target of the said human resources restructuring during the said human resources restructuring period.

(3) Other circumstances before and after the instant layoff.

① According to the Plaintiff’s new employment status, 6 full-time employees, 53 contractual workers, and 3 executive officers were newly employed from July 2013, 2013 to February 2014, which began to have been discussed after the instant plan for the restructuring of human resources was established, and the number of new employees, 49 full-time employees, 6 contractual workers, and 3 executive officers were newly employed between the date of the instant layoff and the date immediately after the layoff to August 2014, and the number of regular promotions for some employees after the instant layoff was suspended.

② The costs incurred in maintaining employment for seven persons subject to final layoffs, including intervenors, are estimated to approximately KRW 770,000,000,000,000,000. The Plaintiff, after setting the total financial resources for business performance in 2013 after the instant layoffs as approximately KRW 1.7 billion, paid KRW 1.5 billion, in particular, as piece rates for support workers who are some departments, not all employees.

③ The Plaintiff paid the total amount of the same educational expenses as the previous year, even though the degree of 1/4 of all employees was reduced due to the instant human resource restructuring, resulting in an increase in the educational expenses paid per employee.

3. We examine the above facts in accordance with the legal principles as seen earlier.

(1) According to the current status of the Plaintiff’s employees at the time of the instant layoff, etc. revealed in the Plaintiff’s business report, etc., 341 persons who were reduced during the period from September 30, 2013 to December 31, 2013 and 382 persons, including 27 persons who applied for a desired retirement and 14 employees who were included in the number of members who were included in the target number of members to be dismissed, are likely to have reached 382 persons who were the final reduction target, even though the number of employees already reduced at the time of February 9, 2014, including 7 persons subject to the final layoff including the intervenors.

Therefore, the judgment of the court below which concluded that it cannot be deemed that there was a decrease in excess of 350 persons who are the last reduction target during the period of human resources restructuring in this case is difficult to obtain, and if the plaintiff already dismissed the intervenors under the circumstances where the last reduction target was reached and the plaintiff was subsequently dismissed, it would be difficult to view it as a violation of consultation with the labor-management council and labor union, and it would be objectively reasonable or a case where the plaintiff has made every effort to avoid dismissal.

(2) The Plaintiff newly employs 55 full-time employees before and after the instant layoff, 59 full-time employees, 6 executives, and 6 employees, and only some departments have paid performance-based bonuses corresponding to the amount of management performance, while maintaining the budget as well as large-scale reduction, resulting in an increase in the amount of expenditure per employee. Considering the Plaintiff’s management situation and scale of layoff, etc., it is difficult to readily conclude that there was a minimum number of inevitable circumstances for the management of the company that should have been implemented even if the Plaintiff had been subject to the instant layoff, and there is room to view that there was insufficient efforts to avoid proper dismissal in view of the fact that the amount of expenditure for the expenses is much larger than the economic cost saved by the instant layoff.

(3) Therefore, the lower court should have deliberated more detailedly on whether the number of persons reduced during the period of human resources restructuring in this case was reasonable in view of objective data, and whether the Plaintiff did not achieve the final reduction target that was agreed upon between labor and management, and whether the Plaintiff could not take all possible measures to minimize the scope of dismissal, but could not take any other managerial measures than dismissal, making it inevitable to dismiss. In addition, the lower court should have determined whether the instant measure was reasonable objectively, and whether the Plaintiff made efforts to avoid dismissal.

Nevertheless, the lower court determined otherwise, that the instant layoff was a justifiable dismissal that meets all the requirements for layoff under the Labor Standards Act, since the Plaintiff did not have any employee employed in excess of 350 prior to the instant layoff, or that the instant layoff was dismissed in accordance with the final reduction objective, and thus there was an urgent need for management, and that the instant layoff was made every effort to avoid dismissal, such as cost reduction and cost reduction. In so doing, the lower court did not exhaust all necessary deliberations by misapprehending the legal doctrine on “a serious managerial necessity” and “an effort to avoid dismissal” among the requirements for layoff, thereby adversely affecting the conclusion of the judgment by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules.

4. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is 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.

Justices Ko Young-han (Presiding Justice)