Refusal to Approve Collective Agreement

(16-2(A)KCCR260, 2003Hun-Ba58 and other(consolidated), August 26, 2004)

Held, the relevant provision of the National Health Insurance Act validating the regulations concerning the personnel decision and the compensation of the National Health Insurance Corporation subject to the approval of the Minister of Health and Welfare is not

in violation of the Constitution.

Background of the Case

Pursuant to the relevant provision of the National Health Insurance Act, the regulations concerning the organization, personnel decision, compensation and accounting of the National Health Insurance Corporation(hereinafter referred to as the 'Corporation') should be determined by the resolution of the board of directors and then the approval thereof by the Minister of Health and Welfare. Here, the Minister of Health and Welfare did not approve the collective agreement concluded between the Corporation and the labor union of the Corporation to which the complainants belonged as members, with respect to the treatment(specifically the promotion) of the employees in continuous service for a long term, and as a result, the provision for the promotion by reason of continuous service in the above collective agreement failed to become enforceable. The complainants thereupon filed the constitutional complaint in this case, claiming that requiring the approval of the Minister of Health and Welfare even for the regulations concerning personnel decision and compensation included in the collective agreement violated the right to collective

bargaining and the right to equality guaranteed by the Constitution.

Summary of the Decision

The Constitutional Court, in a six-to-three opinion, issued the decision holding that the statutory provision at issue in this case is not in violation of the Constitution. The summary of the grounds

for the Court's decision is stated in the following paragraphs.

1. Summary of the Majority Opinion

A. Section 1 of Article 33 of the Constitution provides that " to

enhance working conditions, workers shall have the right to independent association, collective bargaining and collective action." Section 2 of Article 33 provides that these three labor rights are not guaranteed for the public officials unless the exception thereto is

provided in the statute.

The employers of the Corporation are not public officials, hence there is no provision within the Constitution restricting their right to collective bargaining. Thus, in principle, the Trade Union and Labor Relations Adjustment Act applies to them as in the case of the workers in the private sector. However, the Corporation is a non-profit corporation specially incorporated under public law established to perform health insurance business for the purpose of enhancement of public health and promotion of social welfare. As such, the state takes part in the appointment of its directors and officers, the cost necessary for the operation of health insurance business is subsidized from the state budget, and the Corporation is subject to strict state supervision and control over the overall management and operation of the Corporation including its budget and accounting. Due to such nature of the Corporation, the employers of the Corporation stand in the middle area between the public officials and the employers of a public corporation that has both aspects of public nature and business nature. Therefore, in reality, certain restrictions such as the approval of the minister of pertinent ministries of government or the budgetary limits do follow,

even after the conclusion of the collective agreement.

B. The statutory provision at issue in this case has a legitimate legislative purpose, as it is to promote smooth execution of business of a public corporation that performs health insurance business upon delegation from the state, by way of adequate control over the exercise of the authority and operation of the Corporation by the chairman of the board of directors of the Corporation, and also to secure the authority of the Minister of Health and Welfare to guide and supervise the Corporation in order to prevent careless operation with respect to such matters as personnel and compensation that are connected to the national treasury. In addition, in the Corporation's determination or alteration of the matters concerning personnel and compensation, when the content of such decision is against the public nature of the Corporation or the execution thereof is implausible due to the lack of secured budget, enabling the Minister of Health and Welfare to halt such decision from becoming enforceable by not approving the decision is an appropriate means

for the achievement of such legislative purpose.

Furthermore, the matters concerning personnel and compensation among those included in the collective agreement of the Corporation

inevitably accompany changes in the business plan and the budget of the Corporation, as they result in a burden on the national treasury, beyond their meaning as the collective agreement between the labor and the management. Should the collective agreement increasing compensation or retirement pay be concluded and executed as is with no control whatsoever, the meaning of the overall provisions of the National Heath Insurance Act intended to control the business plan and the budget would be reduced and state supervision and control over the Corporation would become impossible in general. Therefore, also in the case where matters concerning personnel decision and compensation are determined by the collective agreement, it is unavoidable to require the approval thereupon of the Minister of Health and Welfare to be obtained. In addition, when the Minister of Health and Welfare does not approve a regulation concerning personnel decision or compensation that is included in a collective agreement, this can be challenged by way of administrative litigation, therefore, there also exists an available remedy therefor. Then, as the degree of restriction upon the right to collective bargaining due to the statutory provision at issue in this case falls within the appropriate scope thereof in light of the public nature of the Corporation, such restriction is not in violation of the

Constitution.

2. Summary of the Dissenting Opinion of Three Justices

In light of the inclusion of the special provisions in the Constitution of Sections 2 and 3 of Article 33 with respect to the three labor rights of the workers who are public officials and who are in service for the major defense industries, the restriction of the three labor rights of the rest of the workers may be justified only when it satisfies stricter prerequisites. The Trade Union and Labor Relations Adjustment Act established for the substantive realization of the three labor rights under the Constitution recognizes the normative effect for the provisions concerning the working conditions and other treatment of the workers included in the collective agreement. Thus, in light of the Constitution's guarantee of the right to collective bargaining in principle for the workers with the exception of public officials, it is desirable to resolve the dispute rising between the labor and the management of the Corporation by way of the system established by the current labor relations law as a matter of principle. In addition, the control over the matters of personnel decision and compensation of the Corporation may in fact be exercised through the authority to make personnel decisions over officers and directors of the Corporation and the authority to manage and supervise the Corporation.

Subjecting the validity of the provisions of the collective agreement concerning personnel and compensation concluded through autonomous collective bargaining between the labor and the management of the Corporation to the approval of the Minister of Health and Welfare who is a third party in the labor-management relationship, is in violation of the Constitution as an excessive

restriction of the right to collective bargaining.