[1] The purport of Article 6(5) of the Minimum Wage Act amended by Act No. 8818, Dec. 27, 2007; the purport of Article 6(5) of the Minimum Wage Act prohibiting wages based on output from being included in the minimum wage; as a result of the application of the above provision, the validity of the part of the labor contract that sets the

[2] The meaning of the principle of trust and good faith and the requirements for denying exercise of rights on grounds of violation of such principle / Where the contents of a labor-management agreement, such as a collective agreement, are invalid in violation of the mandatory provisions of the Labor Standards Act, etc., whether claiming its invalidation violates

[3] The case holding that in a case where the labor and management of Gap corporation operating a taxi transport business agreed to conclude a labor contract under the so-called contract under the method of a monthly wage contract under which the employees would individually select, and where Eul et al., a taxi driver of Gap corporation, et al. entered into a labor contract under the method of a monthly wage contract under which Eul would pay the taxi commission to the company, and subsequently Eul et al. claimed payment of the unpaid minimum wage, etc. against Gap corporation by claiming that the above labor contract violates the Minimum Wage Act, the case holding that Eul et al.'s assertion is not permissible since it violated the principle of good faith

[1] Article 6(1) of the Minimum Wage Act provides that “An employer shall pay a worker to whom the minimum wage is applied at least the minimum wage amount,” and Article 6(3) of the Enforcement Decree of the same Act provides that “The part which sets the amount short of the minimum wage amount among the labor contract between the employee and the employer subject to the minimum wage shall be null and void, and the invalidated part shall be deemed to have been paid the same wage as the minimum wage amount as prescribed by this Act.” However, in cases of a worker engaged in driving service in a taxi transport business (hereinafter “cab driver”), the scope of the wage included in the minimum wage amount under Article 6(5) of the Minimum Wage Act amended by Act No. 8818, Dec. 27, 2007 is limited to the wage prescribed by the Presidential Decree “excluding the wage calculated on the basis of the output” (hereinafter “special provision”). Accordingly, Article 5-2 of the Enforcement Decree of the same Act provides that “the wage shall be included in the minimum wage amount every month under the collective agreement, employment rules, payment terms and payment rate per month.”

The purport of the amended Minimum Wage Act prohibiting the inclusion of wages calculated on the basis of the output in the minimum wage through the special provision is to ensure the stable livelihood of taxi drivers by guaranteeing that taxi drivers can receive wages exceeding the minimum wage amount even in cases where transport income is low by raising the ratio of fixed wage among the wages they receive. Therefore, as a result of the application of the special provision, the labor contract that sets an amount below the minimum wage amount as wages is null and void contrary to the compulsory provision.

[2] The principle of trust and good faith (hereinafter “the principle of trust and good faith”) refers to abstract norms that a party to a legal relationship shall not exercise a right or perform an obligation in a manner that violates the principle of trust and good faith by taking into account the other party’s interest. In order to deny the exercise of a right on the ground that it violates the principle of trust and good faith, it should have been given to the other party or objectively deemed that the other party has a good faith. The exercise of a right against the other party’s trust and good faith should reach an extent that is not acceptable in light of the concept of justice. In a case where the contents of a labor-management agreement, such as a collective agreement, are null and void in violation of mandatory provisions of the Labor Standards Act, it would result in the elimination of legislative intent stipulated under the compulsory provisions, and thus, it would be difficult to deem such assertion to violate the principle of trust and good faith, unless there are exceptional circumstances to accept the application of the principle of trust and good faith prior to the application of the principle of trust and good faith.

[3] In a case where a labor-management-management-management-employee of a taxi transport business-based company (“A”) concluded a labor contract under the so-called contract by which employees would individually select, among the so-called contract by which taxi commission would be paid to the company and take over excess taxi earnings from taxi earnings remaining through taxi operation, and where Party B, etc. (“A”) entered into a labor contract by the method of monthly wage; thereafter, Party B et al. asserted that the above labor contract violates the Minimum Wage Act; and sought payment of unpaid minimum wage, etc. against Party A, the case affirming the lower court’s assertion that the excess taxi earnings brought about by Party B et al. through a labor contract under the method of contract with Party B et al. constituted “wages based on production” under Article 6(5) of the Minimum Wage Act, and thus, Company A is obligated to pay fixed wages above the minimum wage amount, other than the aforementioned provision, and that the aforementioned special case constitutes a labor contract in light of the legislative intent and the principle of trust and good faith, and thus, it cannot be seen that Party A et al.

[1] Article 6(1), (3), and (5) of the Minimum Wage Act, Article 5-2 of the Enforcement Decree of the Minimum Wage Act / [2] Article 2(1) of the Civil Act, Article 15 of the Labor Standards Act / [3] Article 6(1), (3), and (5) of the Minimum Wage Act, Article 5-2 of the Enforcement Decree of the Minimum Wage Act, Article 2(1) of the Civil Act

[1] Constitutional Court en banc Order 2008Hun-Ma477 Decided August 30, 201 (Hun-Ma179, 1311) / [2] Supreme Court en banc Decision 2012Da89399 Decided December 18, 2013 (Gong2014Sang, 236)

Plaintiff (Counterclaim Defendant) 1 and 7 others (Law Firm Seo-sik, Attorneys Yellow-jin et al., Counsel for the plaintiff-appellant)

Geum River Transportation Co., Ltd. (Attorney Song-young et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2015Na18857, 28977 decided January 15, 2016

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. A. Article 6(1) of the Minimum Wage Act provides, “An employer shall pay workers subject to the minimum wage to pay wages above the minimum wage amount,” and Article 6(3) of the Enforcement Decree of the same Act provides, “The part which sets the amount below the minimum wage amount among the labor contract between the workers subject to the minimum wage and the employer shall be null and void, and the invalidated part shall be deemed to have been paid the same wages as the minimum wage amount prescribed by this Act.” However, in cases of a worker engaged in driving service in a passenger taxi transport business (hereinafter “cab driver”), the scope of wages included in the minimum wage amount under Article 6(5) of the Minimum Wage Act amended by Act No. 8818, Dec. 27, 2007 is limited to wages prescribed by Presidential Decree other than the minimum wage amount calculated (hereinafter “instant special provision”). Accordingly, Article 5-2 of the Enforcement Decree of the same Act provides for “group agreement, payment terms and conditions under the labor contract, and payment rate shall be included in the minimum wage amount per month or more than the minimum wage amount per month.”

The purport of the amended Minimum Wage Act prohibiting the inclusion of wages calculated on the basis of the output in the minimum wage through the instant special provision is to ensure a stable livelihood by guaranteeing that taxi drivers may receive wages exceeding the minimum wage amount even in cases where transport earnings are low, by raising the ratio of the fixed wage out of the wage paid to taxi drivers (see Constitutional Court en banc Order 2008Hun-Ma477, Aug. 30, 201). Accordingly, upon the application of the instant special provision, the part of the labor contract that sets the amount below the minimum wage amount as wages is invalid in violation of the mandatory provision.

B. Meanwhile, the principle of trust and good faith (hereinafter “the principle of trust and good faith”) refers to abstract norms that a party to a legal relationship shall not exercise a right or perform an obligation in a manner that violates the principle of trust and good faith, taking into account the other party’s interests, and thus, in order to deny the exercise of such right on the ground that it violates the principle of trust and good faith, the other party’s exercise of right should have been given to the other party or objectively deemed to have a good faith, and the other party’s exercise of right against the other party’s good faith should reach the level that is not acceptable in light of the concept of justice. In a case where the contents of a labor-management agreement, such as a collective agreement, are null and void in violation of compulsory provisions of the Labor Standards Act, the assertion of invalidation would result in impairing the legislative purport of the provision of compulsory provisions, and thus, barring any exceptional circumstances that affirm the application of the principle of trust and good faith prior to the application of the principle of trust and good faith, such assertion cannot be deemed to violate the principle of trust and good faith (see Supreme Court en banc Decision 2939Da9392, Dec.

2. A. The lower court rejected the Plaintiffs’ claim seeking payment of unpaid minimum wage, etc., on the grounds indicated in its reasoning, on the following grounds: (a) even though the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) concluded a so-called contract on the basis of which fixed wage was not paid at all according to his/her own will, claiming that the labor contract was in violation of the Minimum Wage Act after that contract violated the principle of good faith.

B. However, the lower court’s determination is difficult to accept for the following reasons.

(1) The reasoning of the lower judgment and the record reveal the following facts.

(A) From July 1, 2010, the special provision of this case applies to the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”)’s workplace. As such, the Defendant had to pay to taxi drivers under his/her jurisdiction wages exceeding the minimum wage amount, excluding the wages calculated on the basis of output.

(B) In order to pay fixed wage above the minimum wage amount pursuant to the special clause of the instant case, it was necessary to increase taxi commission, but a large number of taxi drivers opposed to the increase in taxi commission.

(C) Accordingly, the Defendant’s labor and management, around September 30, 2010, concluded a labor contract individually chosen by workers among the labor contract by the so-called contract method, which only pays taxi commission to the company from the transportation revenue, and takes the remainder of excess transportation revenue, through taxi operation.

(D) The majority of taxi drivers, including Plaintiff 3, Plaintiff 4, Plaintiff 5, Plaintiff 6, Plaintiff 7, and Plaintiff 8, selected an employment contract under the contract system as before, and Plaintiff 1 and Plaintiff 2, who were employed on October 11, 2012, entered into an employment contract under the contract system with the Defendant.

(2) Examining these facts in light of the legal principles as seen earlier, it is difficult to view that seeking payment of the minimum wage calculated pursuant to the special provision of this case to the extent that the Plaintiffs’ seeking payment of excess taxi earnings derived from the Plaintiffs through the employment contract under the contract under the contract under the contract under the contract with the Plaintiffs constitutes “wages based on the output” as stipulated in the special provision of this case. Thus, the Defendant is obligated to pay the Plaintiffs fixed wage above the minimum wage amount, excluding this, as wages. Moreover, considering the legislative purport of the special provision of this case, which the Defendant intended to enable taxi drivers to lead a stable life by raising the percentage of fixed wage out of the wage, and the motive and process of maintaining the employment contract under the contract under the contract under the contract under the contract under the contract under the contract with the Defendant even after the enforcement of the special provision of this case, and the circumstance leading up to the conclusion of the employment contract under the contract under the contract under the contract with the Defendant, etc., it constitutes

C. Nevertheless, the lower court determined that the Plaintiffs’ assertion was not permissible on the grounds stated in its reasoning. In so determining, the lower court erred by misapprehending the legal doctrine on the good faith principle, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal on this point is

3. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)