2013Guhap20387 The revocation of revocation of an application for non-recognition of bankruptcy, etc.

A

The Head of Seoul Regional Employment and Labor Agency

December 5, 2013

January 16, 2014

1. On May 15, 2013, the Defendant’s disposition of non-recognition of bankruptcy, etc. against the Plaintiff is revoked. 2. The litigation cost is assessed against the Defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On December 13, 2010, the Plaintiff joined a corporation B (hereinafter “B”) that is engaged in civil engineering design, measurement and management business, etc., and was in charge of accounting and management business, and retired on September 1, 2012, and B closed down business on September 10, 2012.

B. From April 2012 to August 2012, the Plaintiff was not paid KRW 11,388,063 (i.e., KRW 7.5 million + KRW 3,888,063) out of the wages from B, and KRW 11,388,063 (i.e., KRW 7.., KRW 7.5 million + KRW 3,88,063). The Plaintiff established D (hereinafter referred to as “D”) that is engaged in civil engineering design and measurement and management business, as in B, as in November 1, 2012.

D. On January 17, 2013, the Plaintiff filed an application with the Defendant for recognition of bankruptcy, etc. under Article 4 of the Enforcement Decree of the Wage Claim Guarantee Act (hereinafter “Enforcement Decree”). However, on May 15, 2013, the Defendant rendered a non-recognition of the Plaintiff’s above application on the ground that the Plaintiff was established D in the same place and most workers succeeded to employment in accordance with Article 5(1) of the Enforcement Decree, etc. of the same Act, and confirmed that most of the workers were operating the same type of business by utilizing the same business network and confirmed that the Plaintiff was operating the same type of business, and cannot be deemed as having actually been in the process of discontinuance and discontinuance of business (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1 through 3, Gap evidence 5, Eul evidence 8, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) The plaintiff's assertion

D is not a company identical to B that closed its business, but is not a company that received business comprehensively from B, such as unpaid wages and retirement allowances. Therefore, since B constitutes a company that closes its business under Article 5(1)2 of the Enforcement Decree, it constitutes a company that satisfies all the requirements of each subparagraph of Article 5(1) of the Enforcement Decree, B’s disposition of this case on a different premise is unlawful.

2) The defendant's assertion

Article 5(1)2 of the Enforcement Decree provides that the existing company shall be in the process of discontinuance of the business or discontinuance of the business as a requirement for recognition of bankruptcy, etc. Accordingly, if the existing company is closed in its form but a new company acquires the business of the existing company, it cannot be deemed that the existing company is in the process of discontinuance or discontinuance of the business. Considering that D and B are the same as the location of its main office, D are the same as that of the eight workers, D succeeds to the employment of six workers among B, and D is engaged in the same type of business as that of the same business partner as B, D is running the business by acquiring the business of B. Accordingly, it cannot be deemed that B is in the process of discontinuance or discontinuance of the business. Therefore, the instant disposition is legitimate since it cannot be deemed that the Plaintiff’s application for recognition of bankruptcy, etc. satisfies the requirements under Article 5(1)2 of the Enforcement Decree.

B. Relevant statutes

Wage Claim Guarantee Act (Payment of Overdue Wages, etc.)

(1) Notwithstanding Article 469 of the Civil Act, the Minister of Employment and Labor shall pay, on behalf of the employer, the unpaid wages, etc. on behalf of the employer, if the retired worker claims the payment of unpaid wages, etc. in cases specified by Presidential Decree, such as bankruptcy.

"Grounds prescribed by Presidential Decree, such as bankruptcy" in Article 4 (1) of the Enforcement Decree of the Wage Claim Guarantee Act means any of the following:

3. Article 5 (Requirements and Procedures for Recognition of Facts of Bankruptcy, etc. by the Minister of Employment and Labor under Article 5)

(1) Upon receipt of an application from a retired worker without receiving any wages, etc. from an employer, the Minister of Employment and Labor may recognize that the employer has no ability to pay the unpaid wages, etc. if the employer meets all of the following requirements (hereinafter referred to as "recognition of bankruptcy, etc."):

1. The number of regular employees calculated by the method specified in attached Table 1 (hereinafter referred to as "number of regular employees") shall not exceed 300 persons;

2. The business shall be discontinued or in the process of discontinuance of the business due to any of the following causes:

(c) Where the main production or business activities of the business have been suspended for at least one month;

3. The payment of wages, etc. shall be suspended due to the lack of ability to pay wages, etc. or any of the following grounds:

(b) Where it is recognized that an employer will take part in the realization or recovery of his/her property for not less than three months from the date of application for recognition of bankruptcy, etc.

C. We examine whether B formally closes its business and D comprehensively takes over its business, including the obligation of unpaid wages and retirement allowances, to workers in B.

In full view of the aforementioned evidence, Gap evidence, Eul evidence, Eul evidence Nos. 4, Eul evidence Nos. 1, Eul evidence No. 2, Eul evidence No. 5, Eul evidence No. 9-1 and Eul evidence No. 2, and the whole purport of each statement and arguments, Eul has continued to engage in the same kind of business as a considerable number of companies (B entered into a service contract related to the construction from July 25, 2012, and D also entered into a service contract related to the construction during the above period) among the companies which were traded with Eul with trade names similar to Eul, and Eul had eight employees including the plaintiff, and two remaining 6 employees were in charge of civil engineering and measurement management business, and 100,000,000 office rent No. 1 and 200,000,000,000 office rent No. 1 and 200,000,000,000,000 won were used for the above office rent No. 1 and 201.

However, in light of the following circumstances acknowledged by comprehensively taking account of the aforementioned facts and evidence Nos. 4, 2, 6, and 8’s respective statements and arguments, it is difficult to view that B formally discontinued its business and D comprehensively took over its business, including the unpaid wages and retirement allowances, to the employees of B, and there is no other evidence to acknowledge it otherwise.

Therefore, the Defendant’s disposition of this case is unlawful on a different premise.

1) B is operated by F, and D is operated by C as the head of F, and D is different from B and D, and F, which is operated by B, is not entirely involved in D. Therefore, it cannot be deemed that B and D are substantially identical.

2) Even if D used the office and equipment used by D and succeeded to the employment relationship with B, and continues to engage in continuous transactions with B, the transfer of business under the Commercial Act requires an express or implied contract between the parties to the transfer of business (see, e.g., Supreme Court Decision 2012Da10247, Feb. 2, 2013).

There is no evidence to prove that B and D made an explicit contract for business transfer. Moreover, it is difficult to view that B and D concluded a contract for business transfer, including unpaid wages and retirement allowances, for employees who were well aware of B and B, with respect to whether B and B entered into a contract for business transfer comprehensively, including the obligation to pay wages and retirement allowances, the sales amount at the time of the business closure was over KRW 600 million, and continuously incurred losses. Since April 2012, the wages of employees including the Plaintiff were not properly known, most of B assets were impossible to recover from non-performing assets, etc., and B continued to operate its business with its loans and business owners, but it is difficult to view B as having entered into a contract for business transfer, including unpaid wages and retirement allowances, and it is difficult to readily view B as having succeeded to B’s business transaction parties, offices, security deposits and fixtures, which are not worth economic value instead of succeeding B’s debt to B including retirement allowances. In light of the fact that it is difficult to clearly understand that B and B’s business transfer contracts were related to B and B.

3) In circumstances where it is unclear whether a new company comprehensively takes over the existing company’s business closed, it is difficult to deem that the purpose of legislation is to ensure the payment of unpaid wages and retirement allowances for retired workers without receiving wages is also consistent with the Wage Claim Guarantee Act, which aims to contribute to the stabilization of workers’ livelihood by establishing measures to guarantee the payment of unpaid wages and retirement allowances for retired workers.

3. Conclusion

If so, the plaintiff's claim shall be accepted for the reasons and it is so decided as per Disposition.

The presiding judge, judges and vice-ranking

Judges Kim Jin-han

Judges Kim Jae-hwan