Case on Presidential Decree That Determines Provisions of the Labor Standards Act Applying to Small-scale Workplaces

[2013Hun-Ba112. April 11, 2019] * First Draft

In this case, the Court held that Article 11 Section 2 of the Labor Standards Act, which states that some provisions of this Act may apply to a business or workplace with four or fewer employees as prescribed by Presidential Decree, does not violate the rule against blanket delegation.

Background of the Case

The complainant was fired from a business with four or fewer employees a week after beginning to work. Arguing that it was an unfair layoff prohibited by Article 23 Section 1 of the Labor Standards Act, the complainant filed a suit against the employer to claim damages. During the final appeal, the complainant requested a constitutional review on Article 11 Section 2 of the Labor Standards Act, which describes that some provisions of this Act may apply to a workplace that has four or fewer employees (“workplaces with four or fewer employees”) as prescribed by Presidential Decree. After the request was rejected, the complainant filed a constitutional complaint to this Court.

Subject Matter of Review

The subject matter of review in this case is whether Article 11 Section 2 of the Labor Standards Act violates the Constitution.

Provision at Issue

Labor Standards Act (Wholly amended by Act No. 8372, April 11, 2007)

Article 11 (Scope of Application)

(2) With respect to a business or workplace in which not more than four employees are ordinarily employed, some provisions of this Act may apply as prescribed by Presidential Decree.

Summary of the Decision

1. Issue of the Case

The issue is whether the Provision at Issue violates the principle of statutory reservation, which suggests that basic rights can only be restricted by the law. The Provision at Issue states that some provisions of the Labor Standards Act may apply to the workplaces with four or fewer employees as prescribed by presidential decrees of the Executive not by the law of the Legislative.

The issue is whether the Provision at Issue violates the principle of the rule against blanket delegation under Article 75 of the Constitution, by going beyond the limit of the blanket delegation. The Provision at Issue delegates the Executive to determine the provisions of the Labor Standards Act by issuing presidential decrees without specifying any legal standard.

2. Violation of Principle of Statutory Reservation

According to the Provision at Issue, it is not the law but the presidential decree that determines which provisions of the Labor Standards Act apply to workplaces with four or fewer employees. However, Article 11 Section 1 of the Act provides that the whole Act shall apply to all workplaces with five or more employees, while the Provision at Issue stipulates that only some provisions of the Act shall apply to workplaces with four or fewer employees. Whether specific provisions shall apply is not deemed a matter that must be regulated by the law.

Thus, the Provision at Issue that delegates the Executive to determine specific provisions of the Labor Standards Act to apply to certain workplaces with the presidential decree complies with the principle of statutory reservation, as long as it conforms to the limit of the blanket delegation prohibited by Article 75 of the Constitution.

3. Violation of Principle of Rule against Blanket Delegation

In the past, the number of employees which determines the scope of workplaces subject to partial application of the Labor Standards Act was stipulated not by the statute, but by the presidential decree. After the Labor Standards Act was amended on March 29, 1989, the Act specifies that workplaces with five or more employees are subject to full application while those with four or fewer employees are subject to partial application, providing the standard to distinguish

the workplaces that are subject to partial application of the Act.

Although the Provision at Issue did not specifically offer the standard regarding which provisions of the Act shall apply to the workplaces with four or fewer employees, the Act has been expanded the scope of the workplaces that its entirety governs to practically assure the normative power since it was legislated. Before, workplaces with four or fewer employees were not subject to the Act at all, but some provisions of the Act are applied now.

The Provision at Issue delegates authority to the presidential decree with a standard suggesting that the provisions of the Act that are first applicable should be decided in the perspective of reducing the burden on employers and also protecting employees. Those bound by the provision will be able to predict which provisions would apply to the workplaces with four or fewer employees according to this standard.

Hence, the Provision at Issue does not violate the principle of the rule against blanket delegation.

4. Conclusion

The Provision at Issue does not violate the Constitution.

Dissenting Opinion of Two Justices

The two Justices contend that the Provision at Issue does not violate the principle of statutory reservation but violates the principle of the rule against blanket delegation.

The Provision at Issue fails to provide any legal standard on the provisions that apply to the workplaces with four or fewer employees and gives full authority to the presidential decree. Even when the legal provisions with relevance are interpreted comprehensively, it is unpredictable which provisions will be prescribed by the presidential decree. The Executive that creates the presidential decree cannot find any standard from the Provision at Issue about which provisions of the Labor Standards Act it has to choose to apply to the workplaces with four or fewer employees.

The Provision at Issue delegates the legislative power of the National Assembly to the presidential decree of the Executive as to which provisions should apply

without explaining any standard. Therefore, it goes beyond the limit of the delegation, amounting to the blanket delegation that is prohibited by Article 75 of the Constitution. At the same time, it violates the principle of establishing standards of working conditions by statute under Article 32 Section 3 of the Constitution, Article 40 stating that the legislative power shall be vested in the National Assembly, as well as the principle of separation of powers between the Executive and Legislative.

The Provision at Issue violates the Constitution. However, it should remain effective as it provides the legal ground, based on which some of the provisions apply to the workplaces with four or fewer employees. The lawmakers should establish a concrete standard regarding which provisions of the Act shall be prescribed by the presidential decree, to eliminate its unconstitutionality as soon as possible. They are also required to examine again if the provisions inapplicable to the workplaces with four or fewer employees were determined according to reasonable grounds.

* This translation is provisional and subject to revision.