[2] Whether there is a burden of proof as to the requirements for layoff, including the legitimacy of layoff (=employer)

In addition, it is necessary to make every effort to avoid dismissal among the requirements for layoff means that an employer takes all possible measures to minimize the scope of layoff, such as rationalization of management policies and work methods, prohibition of new employment, utilization of temporary retirement and voluntary retirement, transfer of work, etc., and the method and degree of such measures vary depending on the degree of management crisis of the relevant employer, managerial reasons for which layoff should be conducted, business contents and scale, number of personnel by class, etc., not conclusive and fixed.

[2] In the case of a lawsuit disputing the adjudication court on relief against unfair dismissal under Article 31 of the Labor Standards Act, the employer bears the burden of proving the legitimacy of the dismissal. Therefore, in the case of layoff, the employer must prove all the requirements for layoff including the legitimacy of layoff.

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, Dec. 22, 1992; 99Du202, Apr. 27, 199). The method and degree are not final and conclusive but 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 (see Supreme Court Decision 2003Du11339, Jan. 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. A. Examining the following circumstances acknowledged by the record in light of the aforementioned legal principles, it is difficult to deem that the reduction of the number of employees through layoff in this case constitutes a case where it is reasonable from an objective point of view, or that the Plaintiff made efforts to avoid dismissal.

① The Plaintiff employed a number of employees and executives before and after the instant layoff. The Plaintiff asserts that such new employment was inevitable on the grounds that there was no work substitution between the employees and the retired executives, and that there was also a retired executive officer. However, it is difficult to readily conclude that the employment of a number of new executives was essential situations due to the lack of particular data on the details of the work of retired executives and newly employed executives, mutual relationship, or continuity. Moreover, even if examining the record, there is no evidence to deem that the Plaintiff made efforts to maintain employment of existing employees through regional transfer orders or job training, etc. prior to the layoff and new employment

② The Plaintiff promoted the number of employees to high-ranking positions (class A) compared to that of the year in the course of promotion immediately after the instant layoff. Even when considering the need for regular promotion personnel, it is difficult to easily obtain measures to increase the number of employees who have been promoted to high-ranking positions to receive wages relatively higher than that of the year, while taking into account the need for regular promotion personnel, it is difficult to easily obtain the measures to increase the number of employees who have been promoted to high-ranking positions to receive wages in comparison with that of the year, and there is no objective circumstance acceptable even after examining records.

③ At the time of the progress of the instant layoff, the Plaintiff paid KRW 50 million or a large amount of KRW 1.7 billion as piece rates in comparison with the previous year. In addition, even though the degree of 1/4 of all employees was reduced through human resources restructuring, including the instant layoff, the payment of education expenses was maintained as it was, and the education expenses per employee was increased accordingly. At the time, even if there was a need for the Plaintiff to expand the payment of performance-based bonuses or education expenses to improve the morale and competitiveness of employees, efforts should have been made to avoid layoff or minimize the amount thereof by utilizing such financial resources, rather than to do so.

④ The Plaintiff did not take measures to avoid dismissal or to minimize the scale of layoffs through reduction of working hours, temporary retirement, and circular leave prior to the instant layoffs. Even if the relationship between individual employees and customers takes into account the characteristics of securities business, it is difficult to evaluate that the Plaintiff made every effort to avoid dismissal, unless the aforementioned measures are taken into account.

⑤ It may not be ruled out that the final reduction objective agreed upon between labor and management at the time of the instant layoff. The lower court determined that the number of the Plaintiff, based on the status of human resources publicly announced by the Financial Investment Association, does not exceed 350 persons who were reduced due to the restructuring of human resources. However, the lower court’s aforementioned determination cannot be deemed reasonable since it did not consider the difference between the number of regular employees as of September 30, 2013 and the number of regular employees as of December 31, 2013, one of the causes for which the difference occurred between the number of regular employees as of December 30, 2013, which was one of the causes for voluntary retirement, disciplinary dismissal, or separation from employment due to personal circumstances after September 30

B. Nevertheless, the lower court determined that the instant layoff meets all the requirements for layoff under the Labor Standards Act on the sole basis as stated in its reasoning. In so determining, the lower court erred by misapprehending the legal doctrine on layoff, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, thereby adversely affecting the conclusion

3. 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 Ahn Jae-chul (Presiding Justice)