Whether the term of validity of a collective agreement is uniformly limited to two years pursuant to Article 32(1) and (2) of the Trade Union and Labor Relations Adjustment Act, where the collective agreement continues to remain in force pursuant to an automatic extension clause with indefinite term after the original term of validity expires (negative)

Article 32(1) and (2) of the Trade Union and Labor Relations Adjustment Act (hereinafter “Trade Union Act”) limit the term of validity of a collective agreement to two years means that it violates the purpose of maintaining appropriate working conditions through a collective agreement and promoting stability in labor-management relations by limiting the term of validity to a certain extent, thereby hindering the adjustment of the contents of a collective agreement in a timely and concrete manner. Therefore, even if the term of validity of a collective agreement exceeds two years is set, the term of validity of a collective agreement shall be reduced to two years by subject to the restriction under Article 32(1) and (2) of the Trade Union Act.

However, the proviso of Article 32(3) of the Trade Union Act provides that if a collective agreement remains in force even after the expiry of the term of validity pursuant to a provision automatically extending the term of validity, one of the parties may terminate the previous collective agreement by notifying the other party not later than six months prior to the date on which the other party intends to terminate the collective agreement. Notwithstanding Article 32(1) and (2) of the Trade Union Act, the purpose of the proviso is to avoid any gap in the collective agreement as much as possible in light of the principle of autonomy of the collective agreement, and to avoid such gap in the collective agreement so far as possible. However, the said proviso allows the parties to agree to extend the validity of the collective agreement after the expiration of the term of validity by the time of entering into a new collective agreement without any restriction under the automatic extension clause automatically extending the term of validity of the collective agreement, to prevent the legislative intent that restricts the term of validity of the collective agreement from damaging the legislative intent of the collective agreement, and to facilitate the conclusion of the new collective agreement by allowing the parties

In full view of the contents of each provision of the Trade Union Act, mutual relationship, legislative purpose, etc., in a case where a collective agreement continues to maintain its validity pursuant to an automatic extension clause after the original term of validity subject to restrictions under Article 32(1) and (2) of the Trade Union Act expires, the term of validity of a collective agreement maintained shall not be uniformly limited to two years pursuant to Article 32(1) and (2) of the Trade Union Act.

Article 32 of the Trade Union and Labor Relations Adjustment Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant)

Plaintiff (Appointed Party) (Attorney Park Ho-hoon, Counsel for the plaintiff-appointed Party-appellant)

Busan Infrastructure Co., Ltd. (Law Firm Sejong, Attorneys Seo Sung-sung et al., Counsel for the plaintiff-appellant)

Changwon District Court Decision 201Na5749 decided July 10, 2012

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Articles 32(1) and 32(2) of the Trade Union and Labor Relations Adjustment Act (hereinafter “Trade Union Act”) provide that “the term of validity of a collective agreement shall not be set more than two years. Where the term of validity is not set in a collective agreement, or where the term of validity is set in excess of the above two years, it shall be two years.” As such, limiting the term of validity of a collective agreement to two years can result in unfairly binding the parties, as it violates the purpose of maintaining appropriate working conditions through a collective agreement and promoting stability in labor-management relations, by limiting the term of validity to a certain extent, thereby bringing a defect in maintaining the contents of a collective agreement at the time and mediating its concrete validity (see Supreme Court Decision 92Da27102, Feb. 9, 193). Therefore, even if the term of validity of a collective agreement exceeds two years, the term of validity of a collective agreement and its reduction to two years under Article 2(1)2(2) of the Trade Union Act shall be imposed on the parties to the collective agreement.

However, the proviso of Article 32(3) of the Trade Union Act provides that “If a collective agreement has not been concluded even after the expiration of the term of validity, any other agreement shall continue to exist until the conclusion of a new collective agreement until the new collective agreement is concluded, that agreement shall be in effect, and either party may terminate the previous collective agreement by notifying the other party six months prior to the date on which the collective agreement is intended to be terminated.” If the collective agreement continues to take effect pursuant to the provisions for automatic extension of indefinite term even after the expiration of the term of validity, the other party may terminate the previous collective agreement by notifying the other party six months prior to the date on which one party intends to terminate the collective agreement.” This is intended to respect the principle of autonomy of the collective agreement to a certain extent and avoid the gap in the collective agreement at any time, with a view to preventing the occurrence of a situation in the collective agreement from being absent from the time when the term of validity expires automatically extended by automatic extension provisions with indefinite term and allowing the other party to terminate the collective agreement at any time with the expiration of the term of validity as above.

In full view of the contents of each provision of the Trade Union Act, mutual relationship, legislative purpose, etc., if a collective agreement continues to maintain its validity pursuant to an automatic extension clause after the original term of validity subject to restrictions under Article 32(1) and (2) of the Trade Union Act expires, it is reasonable to view that the term of validity of a collective agreement maintained in force is not uniformly limited to two years under Article 32(1) and (2) of the Trade Union Act.

B. For the reasons indicated in its reasoning, the lower court determined to the effect that (1) in light of the fact that the instant collective agreement, which applies to the instant branch upon the original adjudication, was terminated on March 31, 2006 and was not a new collective agreement thereafter, and Article 2 of the Addenda of the instant collective agreement, “the validity of this agreement shall continue until the termination of the instant collective agreement, even after the expiration of the term of validity thereof,” and (2) in the instant collective agreement shall continue to have effect even after the expiration of the term of validity pursuant to the proviso to Article 32(3) of the Trade Union Act, and it is reasonable to deem that the instant collective agreement was invalidated on August 1, 2010 after the expiration of the term of validity thereof, and that the instant collective agreement is also applicable to some of the designated parties who joined the instant branch on March 31, 2009, which was prior to the expiration of the term of validity.

C. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court’s determination is based on the legal doctrine as seen earlier. In so determining, contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine on

2. Regarding ground of appeal No. 2

For the reasons indicated in its holding, the lower court rejected the Defendant’s defense that the Defendant was not obligated to pay leave allowances by taking all measures to promote the use of annual leave on the erroneous premise that the system to promote the use of annual leave is applied, as the instant collective agreement, which did not reflect the system to promote the use of annual leave, is null and void because the instant collective agreement, which did not stipulate working conditions that fall short of the standards under the Labor Standards Act, is set out in the Labor Standards Act, or that the system to promote the use of annual leave is naturally applicable due to the implementation of the Labor Standards Act.

Examining the evidence duly admitted the reasoning of the lower judgment and the content and legislative purpose of the annual leave use promotion system as prescribed by the Labor Standards Act at the time of original adjudication, the lower court did not err in its judgment by misapprehending the legal doctrine on the application of the annual leave use promotion system, contrary to what is alleged in the grounds of appeal.

3. Conclusion

Therefore, the appeal is 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.

[Attachment] List of Appointeds: Omitted

Justices Kim Shin (Presiding Justice)