Plaintiff 1 and one other (Law Firm Mailing et al., Counsel for the plaintiff-appellant)

Leecheon Livestock Cooperatives (Law Firm Dao, Attorney Ha Sang-ok, Counsel for defendant-appellant)

September 7, 2012

1. Revocation of a judgment of the first instance;

2. We affirm that the Defendant’s disciplinary dismissal disposition against the Plaintiffs on May 20, 2010 is invalid.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Basic facts

A. On April 1, 198, Plaintiff 1 joined the Defendant Cooperative and was suspended ex officio from August 1, 2004 to February 9, 2010, and supervised the overall business of the Defendant Cooperative while working as the former managing partner of the Defendant Cooperative until the standby is issued to the Defendant Cooperative. Plaintiff 2, from November 1, 2004 to June 17, 2007, was in general in charge of managing the affairs as a managing partner from June 18, 2007 to February 14, 2010. From January 5, 2010, Plaintiff 2 was in charge of managing the affairs as ○○ Branch.

B. On May 13, 2010, the Ministry of Agriculture, Forestry and Fisheries notified the Defendant Cooperative to take three months of suspension from office against the Plaintiff 1 and three months of reduction of salary against the Plaintiff 2.

C. On May 20, 2010, the Defendant Union attended 8 of the nine members of the personnel committee on May 20, 2010, and opened a personnel committee. The Plaintiff 1 deliberated on the disciplinary action against the Plaintiff 1, which caused the disciplinary cause for neglecting the duty of acquiring fixed assets, violating the prohibition of the use of fixed assets under the name of another person, or violating the prohibition of unjust loans and employees, or changing the order of appropriation, and the disciplinary action against Plaintiff 2, which caused the Plaintiff 2 to unfairly engage in the business of acquiring fixed assets, unlawful lending in the name of another person, or the violation of the prohibition of employees, or the violation of the prohibition of employees, or the violation of the order

D. In accordance with the opinion expressed to the personnel committee members only the ballot papers indicating the same amount of disciplinary action for the purpose of guaranteeing the status and protecting the confidentiality of the personnel committee members, the personnel committee’s members showed 5 copies of the ballot papers indicating the amount of disciplinary action against Plaintiff 1 as “Disciplinary dismissal position” and 5 copies of the ballot papers indicating the amount of disciplinary action against Plaintiff 2 as “Disciplinary dismissal position,” and the personnel committee members present their consent thereto. Following these procedures, the personnel committee of the Defendant Union decided to dismiss the Plaintiffs.

E. In accordance with the resolution of the personnel committee, the Defendant Union issued a disposition to impose disciplinary dismissal on the Plaintiffs (hereinafter “instant disciplinary dismissal disposition”), and notified the Plaintiffs of this on May 20, 2010.

F. The articles of incorporation of the defendant's association are as follows:

Article 49 (Resolution of Board of Directors)

(1) The board of directors shall decide the following matters:

6. Appointment and dismissal of executive officers;

Article 60 (Appointment and Dismissal of Executive Officers)

(2) A union may have not more than three regular directors as executive officers: Provided, That the branch offices may have one regular director as necessary.

(3) The executive officers under paragraph (2) shall be appointed or dismissed by the president of a cooperative through a resolution of the board of directors from among those who passed a screening examination conducted by the

G. The personnel regulations of the Defendant Union include the following provisions:

Article 5 (Authority to Appointment)

(1) The head of an association shall appoint, move, promote, discharge, and all other persons.

(2) Executive officers shall be appointed by a resolution of the board of directors from among the executive officers who have passed the screening examination conducted by the National Federation Chairperson.

Article 76 (Appointment and Dismissal of Executive Officers)

(1) The term "executive officer" means a managing director, a managing director, and the managing director of a branch office.

(2) Executive officers shall be appointed or dismissed by the president of a cooperative upon resolution by the board of directors pursuant to Article 5 from among those who have passed a screening examination conducted by the National Federation Chairperson: Provided, That no resolution by the board of directors is required

1. Where an executive officer is dismissed;

Article 99 (Establishment of Personnel Committee) The Personnel Committee shall be established to deliberate on the personnel management plans, reward and punishment of the staff, public notice, and other important matters concerning the personnel affairs.

Article 101 (Committee's Functions) The Committee shall resolve on the following matters with respect to employees of the Korean Association:

3. Matters relating to discipline;

4. Matters concerning adjudication of compensation;

Article 102 (Proceedings of Committee)

(2) The Committee shall open with attendance of a majority of all incumbent members, and pass a resolution with a consent of a majority of members present.

(3) No deliberation by the Committee shall be open to the public, and no person who participates in the Committee shall divulge confidential information he/she becomes aware of in the course

[Ground of recognition] Facts without dispute, Gap evidence Nos. 2, 5, 18, Eul evidence Nos. 5, 6, 25, 26, 35 (including each number), the purport of the whole pleadings

2. Determination as to the substantive legitimacy of the disciplinary dismissal disposition of the instant case

A. The plaintiffs' assertion

The grounds for disciplinary action that the Defendant Union imposed on the ground of the instant disciplinary dismissal disposition are not practically nonexistent, or even if there exist exist, the heavy disciplinary action, which would be dismissed, deviates from the legitimate scope of exercising the right to disciplinary action, and thus, the instant disciplinary dismissal disposition is null and void.

B. Determination

(1) Existence of grounds for disciplinary action

In full view of the overall purport of the arguments in Gap evidence Nos. 8, 16, 17, Eul evidence Nos. 7 through 20, Eul evidence Nos. 36 (including various numbers), the facts that the plaintiffs violated the provisions of the defendant's association as stated in the following (a) through (e) and the facts that the defendant's association made the disciplinary dismissal disposition of this case by taking them as grounds for disciplinary action can be acknowledged. Accordingly, the plaintiffs' assertion that there is no grounds for disciplinary action is without merit.

(A) Negligence in the acquisition of fixed assets (as to the plaintiff)

In order to acquire fixed assets (land) from a cooperative, a resolution shall be obtained by referring it to the board of directors or a general meeting, along with objective materials, such as a market price appraisal statement, a certified copy of the register, land cadastre, etc. for the determination of the estimated price. Nevertheless, from July 2008 to August 2008, the Plaintiffs determined the sales price without objective materials, such as a market price appraisal statement, and processed the affairs by entering into a sales contract, in the process of purchasing a lot of land owned by the Defendant Cooperative from July 200

(B) Unfair loans made under another person’s name (as to the Plaintiff)

The plaintiffs shall not deal with loans using another person's name for the purpose of avoiding the limit on loans to the same person. Nevertheless, the plaintiffs 1 took out loans of KRW 76 million on March 22, 2006, and KRW 190 million on September 28, 2006 in the name of the non-party 2, the head of which is the non-party 1, a total of KRW 1.41 million on a total of ten occasions from March 22, 2006 to October 31, 208, and the plaintiff 2 paid loans of KRW 1.14 million on a total of ten occasions from March 22, 2006 to March 22, 2006; and the plaintiff 2 paid KRW 76 million on March 22, 2006 and KRW 190 million on September 28, 206 under the name of the non-party 2.

(C) Violation of the prohibition of employees (as to the plaintiff)

The plaintiffs shall not use their status or engage in any act of lending, guaranteeing, taking over, borrowing, etc. money, etc. However, on January 11, 2007, the plaintiffs 1 lent KRW 100 million to the non-party 3 who borrowed from the defendant's association. Upon receiving the request from the non-party 4, the plaintiff 2 borrowed the business fund from the non-party 5's account on April 21, 2005 and lent KRW 50 million to the non-party 4 on August 12, 2006, from the time when he borrowed KRW 159 million to the non-party 4 on March 12, 2006. Upon receiving the request from the non-party 6 to borrow the business fund, the plaintiff 2 lent KRW 10 million from the non-party 7's account on May 10, 2005 to the non-party 6.

(D) Unfair dealing in the business of changing the order of appropriation (as to the plaintiff)

The manual for the bond management business of the defendant association provides that "where the price collected by legal procedures is insufficient to cover the total amount of the claims, and it is deemed impossible to recover the total amount of the claims from the unregistered security or the general property of the person related to the debt, the above collection amount shall be adjusted in the order of expenses, originals and interest for each claim with approval of the person with the discretionary power.

In appropriating 15,1140,00 won collected in the course of the voluntary auction of the secured goods by Nonparty 4 and Nonparty 8 on September 19, 2006, the Plaintiffs should have adjusted the above recovery amount of KRW 15,1140,00,00 from the above obligor’s overdue debts. Since a provisional attachment is made on the part of the property owned by Nonparty 9 of the guarantor, it is possible to recover the total amount of claims from the real property. Thus, the Plaintiffs should have adjusted the above recovery amount of KRW 15,114,00 as follows.

19,185,185, non-party 8 (Account Number 1 omitted), 20,713,7135,725,7130 non-party 8 (Account Number 1 omitted), 20,75,713,713, 7135, 7130, 71325, 7130, 7130, 7138 (Account Number 2 omitted), 20,75, 8 (Account Number 3 omitted), 6, 205, 20, 8 (Account Number 3 omitted), 20,7598, 45, 205, 205, 714, 145, 147, 154, 147, 2514, 157, 147, 147, 2514, 147, 157, 147, 2514

Nevertheless, the plaintiffs unfairly changed the appropriation order of the above collection amount as follows, and as a result, deposited 2,7270,000 won in the provisional collection amount.

Security (unit No. 20,759, 45329, 200, 200 Nonparty 8 (Account Number No. 3 omitted) 20,7598, 4539, 200, 2000, 36,07119, 185 3, 114, 80, 83, 114 27, 270 Nonparty 8 (Account Number 2 omitted) 0,000, 713, 25, 7130, 2000, 200 Nonparty 8 (Account Number No. 3 omitted), 020,759, 329, 200, 2020, 200, 200, 30, 359, 20759, 30, 3014, 2517, 27137, 27197

After that, the Plaintiffs received KRW 5 million from Nonparty 4, and received KRW 10 million from Nonparty 4 the provisional seizure of the real estate owned by Nonparty 9, and subsequently, received KRW 27.2 million from Nonparty 4, the sum of KRW 27.2 million in the amount of the amount of the collection unpaid and KRW 15 million in the amount of KRW 15 million in the amount of the money received from Nonparty 4 (+ KRW 5 million + KRW 10 million), and KRW 42.2 million in the amount of the said amount of the collection unpaid and KRW 15 million in the amount of the money collected from Nonparty 4, as follows:

Non-party 4 credit and security (Account Number 4 omitted), the principal of interest on the principal of the principal of the expenses for credit and security (Account Number 4 omitted), 243 20,015,015 16,021 36,279 243 20,015 877 21,135 15,144 Non-party 8 (Account Number 5 omitted) 230,000 20,804 41,034 230,000 230,909 21,135 19,89 total 4730,015,8257, 3137, 4034, 178242, 2375, 3034, 204

(E) Unfair supply of △△△ Embry (Plaintiff 1)

In principle, the goods handled by △△△△te shall be sold in cash and on a fixed basis, to the extent that it does not hinder the preservation of claims, and the credit sales amount shall be treated as the credit sales amount based on the credit certificate or acceptance certificate. Nevertheless, as the credit sales amount of Nonparty 10 exceeds the credit sales amount of Nonparty 10, the Plaintiff 1 released △△△△△te on four occasions in total from December 28, 2009 to January 22, 2010, without settling accounts of the △△△△△△te’s fixed meat sales amounting to KRW 468,00 (total amounting to KRW 468,00).

(F) In addition, the Defendant Union set up a pledge against the Plaintiff 2 on July 12, 2005 with respect to the loans of KRW 20 million against Nonparty 4, Nonparty 4, the children of Nonparty 4, and claimed that there was a ground for disciplinary action that terminated the pledge on November 21, 2006 without confirmation upon Nonparty 4’s request.

In full view of the overall purport of the arguments in evidence Nos. 17 and 56, the documents (Evidence No. 56) prepared by Nonparty 12 (Evidence No. 56) who investigated the grounds for disciplinary action, such as the alteration of order of appropriation, etc., by the Defendant Union’s inspector Nonparty 12 as one of the facts of violation of the Plaintiff 2’s provision, and the documents (Evidence No. 17) drafted by Plaintiff 2, etc. with regard to the grounds for disciplinary action, such as the alteration of order of appropriation, the fact that Plaintiff 2’s defense is stated together in the contents, and that the documents (Evidence No. 17) drafted by Plaintiff 2, etc. regarding the grounds for disciplinary action, such as the alteration of order of appropriation, are not included in the contents of the wrongful termination of the registered deposit of pledge right. In addition, it is not clear whether the Defendant Union took the grounds for the termination of the registered deposit of pledge right, and it is insufficient to recognize it only with the statements No. 21 and 56.

(2) Determination on whether the exercise of disciplinary discretion is appropriate

(A) Legal principles as to disciplinary action

In principle, the issue of whether a disciplinary measure should be taken against a worker for the reason of disciplinary action is at the discretion of the person having the authority to take the disciplinary measure. Thus, in order to be illegal, the disciplinary measure is limited to cases where the person having the authority to take the disciplinary measure has been deemed to abuse the authority to take the disciplinary measure since the person having the authority to take the disciplinary measure has considerably lost validity under the social norms. If the disciplinary measure is deemed to be a disposition which has considerably lost validity under the social norms, it should be deemed that it is objectively and objectively unfair in light of the characteristics of the job, the content and nature of the misconduct as the reason for the disciplinary measure, and the purpose to achieve through the disciplinary measure and all the circumstances incidental thereto (see Supreme Court Decision 2006Da33999, Dec. 28, 200

(B) Whether the exercise of disciplinary discretion against Plaintiff 1 is appropriate

As seen earlier, the grounds for disciplinary action against Plaintiff 1 are the behavior that treats the property of the Plaintiff 1 as if it were the property of the Plaintiff 1. It is highly likely that the amount of unfair loans using the Plaintiff 1’s name is more than 1.1 billion won, and it is sufficient to view that Nonparty 4 or Nonparty 9 committed an act falling under the grounds for disciplinary action as seen earlier by intentionally or by gross negligence, such as the amount of benefits derived from Nonparty 4 or Nonparty 9 to KRW 1,100,000,000, and the amount of benefits derived from the provisional seizure established by the Plaintiff 1, thereby causing serious damages to the union or seriously disturbing order. According to these circumstances, it is difficult to recognize that Plaintiff 1’s disciplinary power, i.e.,,,, the disciplinary power of Plaintiff 1, the Plaintiff 1, the Plaintiff 1, who was subject to disciplinary action under the name of the Plaintiff 1’s employer for a period of 6 months prior to the Plaintiff 1’s repayment of money due to the Plaintiff 1’s disciplinary action on September 24, 201.

(C) Whether the exercise of disciplinary discretion against Plaintiff 2 is appropriate

In addition, in light of the following circumstances as seen earlier, it is reasonable to view that the instant disciplinary dismissal disposition against Plaintiff 2 constitutes “the case where: (a) the validity of the instant disciplinary dismissal disposition is manifestly unreasonable in light of social norms; and (b) it is invalid as it deviates from and abused the scope of the disciplinary discretion.” In light of the following circumstances, it is reasonable to view that the instant disciplinary dismissal disposition against Plaintiff 2 constitutes “the case where it is objectively unreasonable in view of social norms.”

1) Of the disciplinary reasons against Plaintiff 2’s assertion against the Defendant Union, the illegal loan under the name of another person was extended by Plaintiff 1 in the name of his relative, etc., and Plaintiff 2 merely settled the loan in the position of the managing director. Therefore, it cannot be deemed that the actual pecuniary gain was obtained. The payment is not entirely liable for the remainder of the amount of KRW 260 million out of the total amount of 1.14 billion loan under Plaintiff 1’s name.

2) The act of lending business funds to Nonparty 4 and 6 in violation of the prohibition of employees was in 2005 and almost five years have passed since the date on which the grounds for the disciplinary dismissal of the instant disciplinary action occurred, and the five-year disciplinary action under Article 9 of the Rules on the Handling of the Members’ Disciplinary Action (Evidence B No. 35) was almost complete.

3) Although the Ministry of Agriculture, Forestry and Fisheries notified the Plaintiff 2 to take a disciplinary action for the 3-month reduction of salary against the Plaintiff 2, the Defendant Union was subject to the disciplinary action against the Plaintiff 2. From 2009 to 2010, the relevant local agricultural cooperatives were subject to a disciplinary action like the disciplinary action against the Plaintiff 2, most of the relevant local agricultural cooperatives were subject to the same disciplinary action as the disciplinary action against the Plaintiff 2’s local headquarters. In particular, it is extremely rare in the case of Plaintiff 2, who requested the reduction of salary as in the case of Plaintiff 2, and was subject to a heavier disciplinary action by raising the two stages of the disciplinary action.

4) On March 11, 2008, Plaintiff 2 worked for the Defendant Union and had not been subject to disciplinary action from the Defendant Union prior to the disposition of disciplinary dismissal of the instant disciplinary action, except for those subject to the most minor reprimand among the types of disciplinary action. The disciplinary action of the said reprimand is not due to Plaintiff 2’s own act, but is also responsible for supervising the shortage of time from the payment of non-resources by the subordinate employee.

5) The purpose of the Defendant Union’s efforts to achieve through the disciplinary dismissal of the instant disciplinary action is to be sufficiently possible through other disciplinary means, such as suspension from office or reduction of salary, and it is difficult to view that Plaintiff 2’s misconduct constituted “the extent that it is impossible to continue the employment relationship in light of social norms.”

3. Determination as to the procedural legitimacy of the disciplinary dismissal disposition of the instant case

A. The plaintiffs' assertion

(1) According to Article 43(3)6 of the Agricultural Cooperatives Act, the board of directors of a regional agricultural cooperative shall be subject to a resolution by the board of directors on the appointment and dismissal of executive officers, and the articles of association of a defendant cooperative shall be subject to a resolution by the board of directors when the president of a cooperative intends to appoint and dismiss executive officers. Thus, Article 76 of the personnel regulations of the defendant cooperative provides that disciplinary dismissal of executive officers shall not be subject to a resolution by the board of directors, such as the Agricultural Cooperatives Act and the articles of association, and therefore, the defendant cooperative did not go through a resolution by the board of directors at the time of the instant disciplinary dismissal, although it

(2) At the time when the personnel committee of the defendant union decided to dismiss the plaintiffs, only five copies of the eight ballot papers were shown to the members, and this did not go through the ballot counting.

(3) The instant disciplinary dismissal disposition is null and void due to the foregoing procedural defect.

B. Determination

Article 16 subparagraph 14 of the Agricultural Cooperatives Act (amended by Act No. 9761) provides that the articles of association of a local agricultural cooperative shall include matters concerning appointment and dismissal of executive officers, and Article 43 (3) 6 provides that the board of directors of a local agricultural cooperative shall decide on matters concerning appointment and dismissal of executive officers, and Article 56 (2) provides that local agricultural cooperatives shall appoint executive officers as prescribed by the articles of association, and the executive officers shall appoint and dismiss the president of a cooperative from among those who have passed the screening examination conducted by the chairperson of the central association, and Article 107 provides that the above provisions concerning regional livestock cooperatives shall apply mutatis mutandis.

As seen earlier, Article 49(1)6 of the articles of incorporation of a defendant union requires the board of directors of the defendant union to resolve on matters concerning appointment and dismissal of executive officers, and Article 60(3) provides that the president of the union shall appoint and dismiss the executive officers from among those who have passed the screening examination conducted by the National Federation Chairperson after the resolution of the board of directors.

The purpose of the Agricultural Cooperatives Act and the articles of incorporation of the defendant cooperative lies in the appointment and dismissal of executive officers as above in the appointment and dismissal of the board of directors, taking into account the importance of the duties performed by the executive officers of local agricultural cooperatives, thereby preventing the re-election of the chief of a cooperative who is authorized to appoint and dismiss the chief and ensuring the appropriateness of the appointment and dismissal of executive officers. Among them, the term “election and dismissal” refers to appointment and dismissal as referred to in the articles of incorporation of the Agricultural Cooperatives Act and the defendant cooperative, and among them means dismissal and dismissal against their own will, such as disciplinary dismissal and dismissal from office, in light of the purpose of the Agricultural Cooperatives Act and the articles of incorporation as seen earlier, and it does not constitute natural dismissal and dismissal from office due to death, etc. (see Supreme Court Decision 2005Da62891, Jan. 26, 2006

However, the main text of Article 76 (2) of the Personnel Management Regulations of the defendant union provides that the president of the cooperative shall be appointed and dismissed by a resolution of the board of directors from among those who have passed a screening examination conducted by the National Federation Chairperson, while Article 76 (2) 1 of the proviso provides that the executive officer shall not undergo a resolution of the board of directors in the case of natural dismissal, member dismissal, retirement age or disciplinary dismissal, and accordingly, the resolution of the board of directors is not required for the disciplinary dismissal procedure of this case against the plaintiffs. The provision that does not go through the resolution of the board of directors in the case of natural dismissal, member dismissal, and retirement age dismissal under Article 76 (2) 1 of the Personnel Management Regulations of the defendant union enacted by delegation of the articles of association does not violate the Agricultural Cooperatives Act or the articles of association, but the provision that does not go through the resolution of the board

Furthermore, according to the personnel regulations of the defendant union (Evidence No. 26), the matters concerning disciplinary action shall be subject to the resolution of the personnel committee. However, according to Article 100(1) of the personnel regulations, the personnel committee shall be composed of not more than nine members, including the president of the union, standing directors (or managing director, managing director), non-standing directors, four non-standing directors, and three or less employees appointed by the president of the union from among the employees of Grade 4 or higher, so it is not possible to substitute for the resolution of the board of directors of the defendant union.

Therefore, the disciplinary dismissal of the instant case against the Plaintiffs without the resolution of the board of directors in violation of the provisions of the Agricultural Cooperatives Act or the articles of association in accordance with the invalid personnel regulations is null and void as it lacks procedural legitimacy without any further determination as to other procedural defects claimed by the Plaintiffs.

4. Conclusion

Therefore, the disciplinary dismissal disposition of this case against the plaintiff 1 is procedural legitimacy, and the disciplinary dismissal disposition of this case against the plaintiff 2 is all null and void due to lack of substantive legitimacy and procedural legitimacy. Thus, each of the plaintiffs' claims of this case seeking confirmation of its invalidation are accepted due to grounds. Since the judgment of the court of first instance is unfair differently from this conclusion, it is so decided as per Disposition by confirming that the disciplinary dismissal disposition of this case against the plaintiff 1 is null and void.

Judges Kim Yong-open (Presiding Judge)