[1] In a case where it is deemed that an employer was unable to pay wages or retirement allowances to workers, whether it constitutes a ground for dismissal of liability for violation of the obligation to pay wages and retirement allowances within the due date under the Labor Standards Act or the Guarantee of Workers' Retirement Benefits Act (affirmative)

[2] In a case where a custodian inevitably fails to pay wages or retirement allowances to an employee within the payment deadline due to the aggravation of financial conditions or the legal limitation on the custodian’s performance of his/her duties in the course of conducting the business for promoting the efficient rehabilitation of the debtor or the business by adjusting the legal relations among the interested parties under the Debtor Rehabilitation and Bankruptcy Act, etc., the standard for determining whether there exists a ground for rejecting liability for a crime of violating

[1] Where an employer is not allowed to delay the payment of wages or retirement allowances to an employee solely on the ground that the company is under economic depression, but it is recognized that the employer was unable to prevent the delayed payment of wages or retirement allowances, even if all gender and efforts were made, and that the employer was unable to expect more lawful acts or that the employer was an inevitable circumstance, such reason constitutes a ground for denial of liability for a violation of the duty to pay wages or retirement allowances within the due date under the Labor Standards Act or the Guarantee of Workers' Retirement Benefits Act.

[2] When a decision is made to commence rehabilitation procedures for a company, the authority to perform the debtor's business, manage and dispose of assets shall belong exclusively to the custodian [Article 56 (1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter "the Debtor Rehabilitation Act"). However, the custodian falls under a kind of public trustee as a manager of the so-called organization comprised of debtors, their institutions or representatives, and interested persons, not creditors, etc., to coordinate legal relations among interested persons, including creditors, shareholders, equity right holders, etc., and to carry out business operations in order to efficiently recover debtors or businesses. The custodian is subject to court supervision by various methods, such as obtaining prior permission from the court for disposal of assets or reporting the debtor's business and asset management status, etc. to the court (see Articles 91 through 93 of the Debtor Rehabilitation Act, etc.).

In light of the status and role of a custodian in rehabilitation procedures, details of the performance of duties, etc., if the custodian inevitably fails to pay the employee’s wages or retirement allowances within the due date in accordance with the aggravation of financial situation or the limitation on the law regarding the performance of duties of the custodian in the course of performing duties to coordinate the legal relations of the interested parties under the Debtor Rehabilitation Act, etc., the custodian may be deemed one specific requisition, which serves as the grounds for excluding the offense of violating the obligation to pay wages and retirement allowances

Furthermore, whether a custodian was unable to pay wages or retirement allowances within the due date in the course of performing his/her duties ought to be determined individually and specifically in full view of all the circumstances such as the debtor’s commencement of rehabilitation procedures, the reason why the court appoints a custodian, the debtor’s business and property management status at the time of the commencement of rehabilitation procedures, the details of duties performed in order to promote rehabilitation of the debtor or his/her business, his/her effort to consult with interested parties including workers, and progress of rehabilitation procedures

[1] Articles 36, 43, and 109(1) of the Labor Standards Act; Articles 9 and 44 subparag. 1 of the Guarantee of Workers' Retirement Benefits Act / [2] Articles 36, 43, and 109(1) of the Labor Standards Act; Articles 9 and 44 subparag. 1 of the Guarantee of Workers' Retirement Benefits Act; Articles 56(1), 61, 91, 92, and 93 of the Debtor Rehabilitation and Bankruptcy Act

[1] Supreme Court Decision 2001Do204 Decided February 23, 2001 (Gong2001Sang, 822), Supreme Court Decision 2008Do5984 Decided October 9, 2008 (Gong2008Ha, 1568) / [2] Supreme Court Decision 2010Da63836 Decided March 28, 2013 (Gong2013Sang, 733)

Defendant

Prosecutor

Law Firm Citizens, Attorneys Kim Ho-soo et al.

Seoul Eastern District Court Decision 2014No608 decided September 19, 2014

The appeal is dismissed.

The grounds of appeal are examined.

Although an employer is not allowed to delay the payment of wages or retirement allowances to a worker solely on the ground that the company is in economic depression, if it is recognized that the employer was unable to prevent the delayed payment of wages or retirement allowances even if all gender and efforts were made, and it is recognized that the employer was unable to expect more lawful acts or that it was an inevitable circumstance, such reason constitutes a ground for the violation of the duty to pay wages and retirement allowances under the Labor Standards Act or the Guarantee of Workers' Retirement Benefits Act (see Supreme Court Decisions 2001Do204, Feb. 23, 2001; 2008Do5984, Oct. 9, 2008, etc.).

When a decision is rendered to commence rehabilitation procedures for an enterprise, the authority to perform the debtor's business, manage and dispose of assets shall be placed under the exclusive jurisdiction (Article 56 (1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter "the Debtor Rehabilitation Act"). However, the custodian constitutes a kind of public trustee as a manager of the so-called organization of interested parties comprised of the debtor, his/her institution or representative, not the debtor, and creditors, etc. (see Supreme Court Decision 2010Da63836, Mar. 28, 2013, etc.). The custodian performs his/her business in order to facilitate efficient rehabilitation of the debtor or his/her business by adjusting legal relations among interested parties, such as creditors, shareholders, equity right holders, etc., and is subject to court's permission for certain acts such as disposal of assets or monetary expenditure (see, e.g., Article 61 of the Debtor Rehabilitation Act), and reporting the debtor's business and asset management to the court (see, e., Articles

In light of the status and role of a custodian in rehabilitation procedures, details of the performance of duties, etc., if the custodian inevitably fails to pay the employee’s wages or retirement allowances within the due date in accordance with the aggravation of financial situation or the legal limitation on the custodian’s performance of duties, etc. in the course of performing duties to coordinate the legal relations of interested parties under the Debtor Rehabilitation Act, etc., the custodian may be a specific requisition, which serves as one of the grounds for excluding the offense of violating the obligation to pay wages and retirement allowances

Furthermore, whether a custodian was unable to pay wages or retirement allowances by the due date during the performance of his/her duties ought to be determined individually and specifically in full view of all the circumstances such as the debtor’s commencement of rehabilitation procedures, the reason why the court appoints a custodian, the debtor’s business and property management status at the time of the commencement of rehabilitation procedures, the details of the duties performed to promote rehabilitation of the debtor or his/her employees, the effort to consult with the interested parties, including workers, and the progress of rehabilitation procedures.

For reasons indicated in its holding, the lower court determined that ① Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) was in arrears with wages, etc. from around 2010 due to the use of interim retirement allowances settled by Nonindicted Co. 2, the actual owner of the company, unreasonable progress of the business, etc., and there was a risk of causing bankruptcy, such as exceeding twice the assets. ② On November 24, 201, the Defendant, who was appointed to the general president, made efforts to normalize the management and financial status of Nonindicted Co. 1, including the implementation of various restructuring, such as reorganization, personnel announcement, reduction of the annual salary for officers, etc., and the employee’s contribution of approximately KRW 1.3 billion to the rehabilitation court for the repayment of the obligations of Nonindicted Co. 1, the lower court determined that the Defendant was not guilty of the accrued assets of Nonindicted Co. 1, the lower court applied for commencement of rehabilitation procedures to the Daegu District Court because of the serious liquidity crisis of the employee’s assets such as sales claims, etc., and that the Defendant was not aware of the employee’s retirement allowance plan and other circumstances.

Examining the records in light of the aforementioned legal principles, the above determination by the court below is just, and there is no error of law by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal principles on the grounds for excluding the violation of the duty to pay wages and retirement allowances stipulated in the Labor Standards Act or the Guarantee of Workers

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-deok (Presiding Justice)