[1] In a case where the Korea Labor Education Institute established with a labor union to enforce the wage peak system to extend employment for two years after the retirement age instead of reducing the wage of an employee aged 58 at a certain rate before the retirement age under the labor-management agreement, the case holding that the contents of the above agreement in conflict with the existing personnel regulations shall not affect the Korean Labor Education Institute or the Korea Labor Education Institute

[2] The meaning of ordinary wages and the standard for determining the fixedness of wages

[1] Articles 1 (current Deletion), 7 (current Deletion), 12 (current Deletion), 13 (current Deletion), and 16 (current Deletion) of the former Korea Labor Education Center Act (repealed by Act No. 9318, Dec. 31, 2008) / [2] Articles 2 (1) 5 and 56 of the Labor Standards Act; Article 6 (1) of the Enforcement Decree of the Labor Standards Act

[2] Supreme Court en banc Decision 2012Da89399 Decided December 18, 2013 (Gong2014Sang, 236)

Plaintiff

Korea Labor Education University and two others (Law Firm Lee & Lee, Attorneys Lee Jin-jin, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2010Na117476 decided October 12, 2012

The part of the lower judgment against the Plaintiff regarding the Korea Institute of Technical Education, which is the taking-off of the lawsuit by Defendant Korea Labor Education Center, is reversed, and that part of the case is remanded to the Seoul High Court. The Plaintiff’s appeals against Defendants 2 and 3 are all dismissed. The costs of appeal between the Plaintiff, Defendant 2 and Defendant 3 are assessed against

The grounds of appeal are examined.

1. As to the grounds of appeal against Defendant 2 and Defendant 3

In light of the relevant legal principles and records, the court below's determination that Defendant 2 and Defendant 3's liability for damages is not recognized on the grounds as stated in its reasoning is just and acceptable, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles

2. As to the grounds of appeal by Defendant Korea Labor Education Institute (hereinafter “Education Institute”) against the Korea Institute of Technology Education, which is the taking over of a lawsuit

A. Provisions on the validity of the collective agreement

The court below acknowledged the fact that the education center and the National Public Research Workers' Education Center of October 9, 2006 entered into a labor-management agreement on the wage peak system and a public recruitment implementation labor-management agreement (hereinafter "the agreement of this case") (hereinafter "the agreement of this case"), and determined that the agreement of this case was not null and void even if the education center did not obtain the approval of the board of directors under the former Labor Education Center Act (the wage peak system of this case was enacted without the approval of the resolution of the board of directors before repeal of Act No. 9318, Dec. 31, 2008) on the basis of the annual salary for the year immediately before the transition of the wage peak system, since the wage peak system stipulated in the agreement of this case is not an increase in remuneration, but an increase in wage, and the employee working in the education center is mandatory when he is 58 years of age.

However, this decision of the court below is not acceptable.

The purpose of the Education Institute Act is to establish a democratic labor-management relationship, to achieve industrial peace, and to enhance the ability to solve labor-related issues, thereby contributing to the development of the national economy. For this purpose, the former Labor Education Institute Act provides that the Government shall contribute the expenses required for the establishment and operation of the Education Institute for each business year (Article 13) within budgetary limits, and the Education Institute shall obtain approval from the Minister of Labor for its budget and settlement of accounts for each business year (Article 16), four representatives of workers recommended by the nationwide employers’ organizations, four representatives of employers recommended by the Minister of Labor, and public interest representatives recommended by the Minister of Labor shall deliberate and decide on the amendment of the articles of incorporation, the enactment and amendment of important regulations, the amendment and repeal of the business plan, budget and settlement of accounts, and other important matters concerning the operation of the Education Institute (Article 7 and Article 12).

However, the wage peak system under the instant agreement provides that the extension of employment for two years after retirement age instead of reducing wages at a certain ratio before the retirement age, and inevitably entails changes in personnel regulations, budget and new scale of employment, etc. Therefore, it can be evaluated as an important matter necessary for the resolution of the board of directors to determine or implement the contents thereof.

Considering the purpose of the establishment of the Education Center, the process of raising and executing funds for operation, the management and supervision of the State, and the composition and resolution of the board of directors, etc., even if the Education Institute entered into the instant agreement to enforce the wage peak system in conflict with the existing personnel regulations without the resolution of the board of directors, the contents of such collective agreement shall not affect the employees of the Education Center or the Education

Nevertheless, the court below determined that the wage peak system under the Convention was effective only for the reasons stated in its holding. In so doing, the court below erred by misapprehending the legal principles on the validity of a collective agreement concluded by a public institution, which affected the conclusion of the judgment. The ground of appeal pointing this out has merit.

B. The part concerning ordinary wages

The ordinary wages prescribed in the Labor Standards Act as the basis for the calculation of premium pay for overtime, night, and holiday work refer to money and valuables agreed to be paid for contractual work hours, which are ordinarily provided by an employee. The fixed wage here refers to the minimum wage that a worker who has worked for contractual work hours on a voluntary day, regardless of its title, retires on the following day, and is entitled to receive a fixed and conclusive payment in return for the daily work. As such, if an employee provided contractual work on a voluntary day, regardless of whether an additional condition is met, it can be deemed that the employee is naturally expected to be paid and the amount determined in advance is fixed.

Where a worker determines whether to pay a certain amount of wages or the amount of wages during the pertinent year according to the worker’s work performance during the pertinent year, the payment of the wages or the amount of wages during the pertinent year is fixed, and thus, the relevant wage in the pertinent year shall be deemed to be a fixed wage. Provided, That in extenuating circumstances to deem that the payment of wages in the ordinary previous year is delayed only when the payment was made, fixedness may not be recognized, but in such a case, where a certain amount of wages is to be paid by guaranteeing a minimum amount of wages even when the payment was made for work performance, it may be deemed to be a fixed wage within the extent (see Supreme Court en banc Decision 2012Da89399, Dec. 18, 2013

According to the reasoning of the judgment below and the records, the education center paid an amount equivalent to 600% of the basic salary system to its employees subject to the annual salary system in monthly installments as a regular bonus, and according to the annual salary plan of 2006 of the education center, regular bonuses are included in performance-based incentives in the previous year and the amount varies from 80% to 120% according to the performance evaluation of the previous year.

Examining these facts in light of the legal principles as seen earlier, although the aforementioned regular bonus may vary depending on the results of personnel evaluation in the previous year, once the payment rate was set based on the results of personnel evaluation in the previous year, such amount would be paid without changing the amount of work for the pertinent year regardless of the results of the work performance in the pertinent year. Thus, it can be deemed that a worker’s provision of contractual work becomes final and conclusive, and thus, it constitutes ordinary wage, which is a fixed wage regularly and uniformly paid.

Nevertheless, the court below determined that the above regular bonus does not constitute ordinary wages for the reasons stated in its holding. In so doing, the court below erred by misapprehending the legal principles as to the scope of ordinary wages, which affected the conclusion of the judgment. The ground of appeal pointing this out

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the part of the judgment below against the Plaintiff regarding the Korean Institute of Technology Education, which is the taking-off of the Defendant Education, is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. All appeals against the Plaintiff 2, Defendant 3 are dismissed, and the costs of appeal between the Plaintiff, Defendant 2, and Defendant 3 are assessed against the Plaintiff who is the losing party. It is so decided as per Disposition by the assent of

Justices Kim So-young (Presiding Justice)