[1] Whether local public officials in contractual service may reduce their remuneration without undergoing disciplinary procedures prescribed by the Local Public Officials Act, etc. (negative in principle)

[2] Whether Article 8(3) of the Seoul Special Metropolitan City Rules on Personnel Management of Local Contract Public Officials, which provides for the reduction of salary for local public officials in contractual service, is null and void beyond the delegation limit of higher statutes (affirmative)

[3] Whether disciplinary action may be taken against local public officials in contractual service pursuant to the Local Public Officials Act’ Disciplinary Action Act (affirmative)

[1] In light of the legislative purport of the Labor Standards Act, various provisions of the Local Public Officials Act, the Local Public Officials Act and the Local Public Officials Discipline and Appeal Act, it is reasonable to deem that local public officials in contractual service are not able to reduce their remuneration, unless otherwise stipulated in their employment contracts.

[2] Article 8 (3) of the Seoul Special Metropolitan City Regulations on the Personnel Management of Local Public Officials in Contract to provide for matters necessary for the enforcement of the Local Public Officials Regulations provides that the salary may be reduced for those whose work performance is poor as a result of the evaluation of work performance. From the standpoint of the public official who is subject to the reduction of remuneration, the above provision does not guarantee the procedural right of a disciplinary action, such as stating facts beneficial to himself or submitting evidence (Article 5 of the Local Public Officials Disciplinary and Appeal Regulations) but does not guarantee the procedural right of a disciplinary action (Article 16 of the Local Public Officials Disciplinary and Appeal Regulations) and is invalid as it goes beyond the scope of delegation.

[3] In accordance with Article 73-3 of the Local Public Officials Act and Article 13(4) of the Local Public Officials Discipline and Appeal Regulations, a local public official in contractual service may be subject to disciplinary action when there are grounds for disciplinary action under each subparagraph of Article 69(1) of the Local Public Officials Act.

[1] Article 43 of the Labor Standards Act, Articles 70 and 73-3 of the Local Public Officials Act, Article 13(4) of the Local Public Officials Discipline and Appeal Regulations / [2] Articles 8 and 10 of the Local Public Officials Disciplinary Rules, Article 75 of the Constitution / [3] Article 13(4) of the Local Public Officials Discipline and Appeal Regulations, Articles 69(1) and 73-3 of the Local Public Officials Act

Plaintiff (Law Firm Roice, Attorneys Gangnam-gu et al., Counsel for the plaintiff-appellant)

Seoul Special Metropolitan City (Law Firm Daul, Attorney Seo Jong-chul, Counsel for defendant-appellant)

Seoul High Court Decision 2006Nu6767 Delivered on September 29, 2006

The part of the judgment below on the claim for payment of money is reversed, and that part of the case is remanded to the Seoul High Court. The remaining appeal by the plaintiff is dismissed

The grounds of appeal are examined.

1. As to the benefit of confirmation

Even if a local government and a public official in contractual service employed under an employment contract cancel their employment contract before the expiration of the contract term and the expression of intent to cancel the employment contract expires, it is null and void, as long as there is no provision that grants the duty to renew the contract term to the public official in contractual service upon the expiration of the contract term in the Local Public Officials Act or the Local Public Officials in contractual Service Regulations, etc., and thus it is naturally impossible to restore the status of the public official in contractual service, the request for nullification of the declaration of intention to cancel the contract cannot be made only after the request for confirmation of legal relations in the past. Meanwhile, even if the past legal relations affect the current rights or legal status, and it is deemed proper to obtain a judgment on confirmation of the legal relations in order to eliminate risks or apprehension of the present rights or legal status, such legal relations shall be deemed as an immediate final and conclusive interest. However, if the employment contract is terminated with respect to the public official in contractual service, it shall not be deemed that there is no other legal interest in the claim for nullification of the right to claim restitution of the contract before the expiration of the contract term expires.

In the same purport, the court below's determination that the part of the claim for nullification of the cancellation of an employment contract among the lawsuits in this case is unlawful as there is no benefit of confirmation, and there is no error of law such as misunderstanding of legal principles as to the benefit of confirmation, as otherwise

2. As to the legal basis of the instant remuneration reduction measure

Since wages constitute a financial resource that serves as the basis for the survival of workers and their dependents, the Labor Standards Act provides for the payment of wages in currency, direct payment, full payment, and regular payment (Article 43) at least once a month in order to protect wage claims, as well as the recognition of preferential payment right to wage claims (Articles 38 and 43), prohibition of offsetting (Articles 21 and 43), and other Acts provide for the protection of wage claims (Article 246) under the Civil Execution Act. Since public officials are workers provided for in Article 2 of the Labor Standards Act that provides labor for the purpose of wage, the above provisions shall also apply to public officials.

On the other hand, the Local Public Officials Act and the Local Public Officials Remuneration Regulations, which provide for matters necessary for the remuneration of local public officials by delegation of the Local Public Officials Act, provide that the remuneration of public officials in career service as well as remuneration of public officials in career service shall be reduced, but Article 70 of the Local Public Officials Act provides that "the remuneration of public officials in non-career service may be reduced" as one of the kinds of disciplinary actions. Article 73-3 (Disciplinary Action of Public Officials in Non-career Service may apply mutatis mutandis to public officials in non-career service, as prescribed by Presidential Decree, except as otherwise provided in other Acts." Article 13 (4) of the Local Public Officials Disciplinary Action and Appeal Regulations, which are Presidential Decree, may apply mutatis mutandis to public officials in special service under Article 2 (3) 3 of the Act, in addition to cancelling their employment contracts, if there are grounds for disciplinary action under each subparagraph of Article 69 (1) of the Act."

According to the legislative purport of the Labor Standards Act, the Local Public Officials Act and the Local Public Officials Discipline and Appeal Regulations, it is reasonable to view that local public officials in contractual service may not reduce their remuneration without undergoing disciplinary procedures prescribed by the Local Public Officials Act and the Local Public Officials Discipline and Appeal Regulations, unless otherwise stipulated in their employment contracts.

According to the reasoning of the judgment of the court below, the court below cited the judgment of the court of first instance, and found that Article 8 of the Regulations on Local Contract Public Officials, which provides for the employment conditions, appointment procedures, etc. of local contract public officials by delegation of Article 2 (4) of the Local Public Officials Act, can periodically or occasionally evaluate the employment status and performance performance of local contract public officials and reflect them at the time of change, extension, or termination of the contract. According to the Rules on the Personnel Management of Local Contract Public Officials (hereinafter “Personnel Management Rules”) which provides for matters necessary for enforcement of this Decree pursuant to Article 10 of the Rules on Local Contract Public Officials, the regular evaluation of work performance under Article 8 of the Decree shall be conducted every one year after employment, and occasional evaluation shall be conducted every time after the extension, salary, or other terms and conditions of the contract, and the results of the evaluation of work performance shall be reflected in the personnel management of contract public officials (Article 7 (1)) of the Local Public Officials Act). According to the Rules on the Personnel Management of Contract Public Officials (hereinafter “Rules on Contract Officials”).

However, the above determination by the court below is difficult to accept for the following reasons.

First, Article 76 (1), (2) and (3) of the Local Public Officials Act provide that "the appointing authority shall evaluate the service performance of a public official under his/her jurisdiction on a regular or occasional basis and reflect it on the personnel management aspect", and that "any person whose service performance is excellent as a result of the performance evaluation under paragraph (1) may be paid a bonus or special raise in salary," and that "the matters concerning the performance evaluation under paragraph (1) shall be prescribed by the Presidential Decree," respectively. Since each of the above provisions applies to both a public official in career service and a public official in non-career service, he/she can be paid a bonus to a public official with excellent service performance, and therefore, it cannot be the basis for the reduction of his/her remuneration to a public official with poor service performance.

Meanwhile, Article 8 of the Local Contract Public Officials Regulations, which provides for necessary matters concerning the employment conditions, appointment procedures, etc. of local public officials in contractual service, provide that "the head of a local government may evaluate the employment status and performance of employed local public officials on a regular or occasional basis and reflect them at the time of change, extension or termination of the contract." Thus, the above provision that the performance of duties may be reflected in the change of the contract shall not be deemed to have the right to reduce remuneration for local public officials unilaterally to the head of

However, Article 8 (3) of the Regulations on the Management of Public Officials for the purpose of prescribing matters necessary for the enforcement of the Regulations on the Management of Local Public Officials shall adjust the salary of public officials in contractual service in accordance with the amendment of the Local Public Officials Regulations, but the Mayor may separately determine the rate of increase in the salary of public officials in contractual service within the scope of the rate of increase in the salary of all public officials. Provided, That the Regulations on the Management of Public Officials for the Management of Public Officials for the Management of Public Officials for the purpose of the Regulations on the Management of Public Officials for the Management of Public Officials for the purpose of the Regulations on the Management of Public Officials for the Management of Public Officials for the sake of the Regulations on the Management of Public Officials for the Management of Public Officials for the Management of Public Officials for the purpose of the Regulations on the Management of Public Officials for the Management of Public Officials for whom the reduction in remuneration is made shall not apply to a person who has any special reason to adjust his or her interest, such as the acquisition of excellent or new qualifications for his or her performance, or a person whose performance has been poor as a result of the evaluation of work, shall not be justified (Article 16).

Nevertheless, the court below determined that the Defendant’s measure of reducing the remuneration of this case against the Plaintiff based on Article 8(3) of the Personnel Management Rules was justifiable. Thus, the court below erred by misapprehending the legal principles on the remuneration of local public officials in contractual service, etc., which affected the conclusion of the judgment. The ground of appeal pointing this out is with merit.

Furthermore, according to the reasoning of the judgment below, the court below rejected the plaintiff's assertion that the salary reduction measure in this case is a salary reduction measure, and that it is null and void without deliberation or resolution by the disciplinary committee under the Decree on Disciplinary Punishment of Public Officials. The salary reduction measure in this case cannot be a disciplinary measure as part of the contract modification under the Local Contract Public Officials Act and the Local Contract Public Officials Act entered into on July 1, 2002 between the plaintiff and the defendant, and the Decree on Disciplinary Punishment of Public Officials does not apply to the local public officials of special career service such as the plaintiff as the law governing disciplinary action against the state public officials, and according to Article 3 (1) of the Local Public Officials Act, Articles 69 through 73-3 of the Local Public Officials Act concerning disciplinary action against the local public officials of the same special career service as the plaintiff are not applicable. Thus, the plaintiff's assertion on the premise that the salary reduction measure in this case is a disciplinary measure in this case is without merit. However, the plaintiff's assertion that the Local Public Officials Act does not apply to the local public officials of contractual service.

3. Therefore, the part of the judgment of the court below regarding the claim for payment of money is reversed, and that part of the case is remanded to the Seoul High Court, and the remaining appeal by the plaintiff is dismissed. It is so decided as per Disposition by the assent of

Justices Kim Hwang-sik (Presiding Justice)