[1] Whether wage creditors entitled to preferential reimbursement under the Labor Standards Act and the former Guarantee of Workers' Retirement Benefits Act are entitled to receive preferential distribution by the deadline for filing a demand for distribution in the compulsory execution procedure, etc. (affirmative)

[2] In cases where a wage creditor who has preferential right to payment acquires a right to collateral security concerning the employer's property by using the current and future wage or retirement allowance claims as the secured claim, whether a person who has a preferential right to collateral security may receive a preferential dividend than the person who has a preferential right to collateral security (affirmative) / In such cases, the meaning of "wages for the last three months" and "retirement allowance for the final three years" and "retirement allowance for the final three years," if it is proved that the secured claim is a wage claim with preferential right to collateral prior to the determination of the distribution schedule, such person may receive a preferential dividend than the person who has a preferential right to collateral security (affirmative)

[1] Wages for the last three months under Article 38(2) of the Labor Standards Act, accident compensation, and retirement allowances for the last three years under Article 11(2) of the former Guarantee of Workers' Retirement Benefits Act (wholly amended by Act No. 10967, Jul. 25, 201) shall be paid in preference to claims secured by security rights under the Act on Security over Pledges, Mortgage, Movable Property, Claims, Etc., on the whole property of the employer, taxes, public charges, and other claims. This is a provision that limits the validity of general security rights, tax, public charges, and preferential rights to payment, and the purport of the provision is to stipulate that claims on wages, etc. for the last three months shall be paid in preference to other claims if they are paid concurrently with the same property, regardless of whether the establishment of pledges or mortgages or mortgages has been established. Thus, even if a creditor who has preferential payment under the Labor Standards Act, etc. is entitled to receive a lawful distribution from the date of termination of the last three-month period from the date of payment to the final claim for distribution.

[2] Even if a person having a right to preferential payment, who is extinguished by a sale and registered prior to the registration of the decision on commencing commencement of a distribution, is naturally entitled to dividends within the scope of the maximum debt amount stated on the register, as a creditor entitled to dividends, without a demand for distribution. Even if an wage creditor who has a right to preferential payment, acquires a right to preferential payment by using the current and future wages or retirement allowance claims as a secured claim, he/she did not clearly prove that the secured claim is a right to preferential payment prior to the completion date of a demand for distribution, if it is clearly explained that the secured claim is a right to preferential payment prior to the confirmation date of the distribution schedule, he/she may receive a preferential distribution prior to the wage of the last three months or retirement allowance for the final three years. Provided, That as in cases of a demand for distribution as a wage creditor who has a right to preferential payment without a right to preferential payment without the establishment of a right to demand a distribution, the wages of the last three months which may receive preferential dividends, such as a prior to the completion date of a demand for distribution, shall be subject to preferential payment from three months prior to the final completion date of the labor relationship.

[1] Article 38(2) of the Labor Standards Act; Article 11(2) of the former Guarantee of Workers' Retirement Benefits Act (wholly amended by Act No. 10967, Jul. 25, 201); Articles 88 and 148 subparag. 4 of the Civil Execution Act / [2] Article 38(2) of the Labor Standards Act; Article 11(2) of the former Guarantee of Workers' Retirement Benefits Act (wholly amended by Act No. 10967, Jul. 25, 201); Articles 88, 148 subparag. 4, and 149 of the Civil Execution Act

[1] Supreme Court Decision 98Da47412 Decided April 9, 1999, Supreme Court Decision 2006Da1930 Decided June 26, 2008 (Gong2008Ha, 1044)

Korea Deposit Insurance Corporation (Law Firm Law Firm, Attorneys Kim Jong-soo et al., Counsel for the plaintiff-appellant)

Defendant 1 and six others (Law Firm Inology, Attorneys Noh Jeong-hee, Counsel for the defendant-appellant)

Suwon District Court Decision 2014Na53487 decided January 16, 2015

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

The grounds of appeal are examined.

1. Claims falling under wages for the last three months under Article 38(2) of the Labor Standards Act, accident compensations, and retirement allowances for the last three years under Article 11(2) of the former Guarantee of Workers' Retirement Benefits Act (wholly amended by Act No. 10967, Jul. 25, 201) shall be paid in preference to claims secured by security rights under the Act on Security over Pledges, Mortgage, Movable Property, Claims, Etc. on the whole property of the employer, taxes, public charges, and other claims. This provision provides for partial restriction on the effect of general security rights, and preferential rights to payment of wages for the last three months. The purport of the provision is that where claims on wages, etc. are paid concurrently from the same property of the employer at the same time, they may be paid preferentially regardless of whether the establishment thereof is established, pledges, or mortgage establishment. Thus, even if a creditor who has preferential payment under the Labor Standards Act, etc. are entitled to receive retirement allowances from the final claim for distribution at least 20 months prior to the expiration of the period of the final claim for distribution.

Meanwhile, even if a mortgagee, who has been registered prior to the registration of the decision on commencing the commencement of distribution and has become extinct by sale, is naturally entitled to receive distributions according to the order of priority within the scope of the maximum debt amount indicated on the register, as a creditor entitled to receive distributions, without a demand for distribution. Even if an wage creditor, who has a preferential right to payment, has acquired a right to payment by designating a current and future wage or retirement allowance claim as a secured claim, and did not vindicate that such secured claim is a priority claim on the employer’s property by the completion date of a demand for distribution, if it is clearly explained that such secured claim is a wage claim with a preferential right to payment prior to the confirmation of the distribution schedule, he/she may receive a preferential distribution than the prior mortgagee, etc.: Provided, That as seen earlier, as in the case of a demand for distribution as a wage creditor who has a preferential right without the establishment of a collective security right and without the establishment of a right to payment, the final three months which may receive dividends, such as the prior mortgagee, should be explained as a priority claim during the period of demand for distribution from three months prior to the termination date of labor relations.

2. On the grounds stated in its reasoning, the lower court determined that the Defendants’ wage claims cannot be deemed as wage claims with preferential rights to payment under Article 38(2) of the Labor Standards Act even if the Defendants, as wage creditors, did not pay three-month wage claims based on the Defendants’ respective retirement dates after the completion date of the instant demand for distribution, and the Defendants’ retirement allowances did not have preferential rights to payment under Article 38(2) of the same Act on the grounds that the Defendants retired from their labor relations on the final date of the instant demand for distribution, and the Defendants did not have preferential rights to payment on the grounds that the Defendants did not have preferential rights to payment on the ground that the Defendants’ retirement allowances did not exist on the ground that the Defendants’ retirement allowance claims were acknowledged to exist after they were retired from their labor relations on the final date of the instant demand for distribution, and that the Defendants did not have preferential rights to payment on the final date of the instant demand for distribution.

Examining the reasoning of the judgment below in light of the records, the above determination by the court below seems to be based on the legal principles as seen earlier, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal principles regarding the starting point of

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kwon Soon-il (Presiding Justice)