[1] The scope of "suspension of business" under Article 45 (1) of the former Labor Standards Act and the meaning of "temporary retirement" under Article 30 (1) of the former Labor Standards Act

[2] The case holding that where an employer suspends business for an individual worker under Article 45 (1) of the former Labor Standards Act due to the business needs falling under one's own causes, the suspension also constitutes a disadvantageous measure falling under the "temporary retirement" under Article 30 (1) of the former Labor Standards Act

[3] Whether a personnel order including a temporary retirement order belongs to the exclusive authority of the employer who is the personnel management authority (affirmative), and the method of determining whether the temporary retirement order belongs to the legitimate personnel management authority where the temporary retirement order is issued on the grounds of business necessity

[1] Article 45(1) of the former Labor Standards Act (wholly amended by Act No. 8372 of Apr. 11, 2007) provides that "temporary retirement" includes cases where individual workers refuse or are unable to work against their will despite the existence of their intent to provide their labor under a labor contract. Thus, this is a broad concept including "temporary retirement". Meanwhile, Article 30(1) of the former Labor Standards Act (wholly amended by Act No. 8293 of Jan. 26, 2007) provides that "an employer shall not dismiss, suspend, suspend, transfer, reduce, or take other disciplinary action against a worker without any justifiable reason." The term "temporary retirement" refers to a disposition taken by an employer that prevents an employee from performing his/her duties for a certain period of time, while maintaining his/her status as a worker when it is impossible or inappropriate to allow him/her to perform his/her duties.

[2] The case holding that where the employer suspended the business of an individual worker under Article 45 (1) of the former Labor Standards Act (wholly amended by Act No. 8372 of Apr. 11, 2007), the suspension of business constitutes an unfavorable measure corresponding to the "temporary retirement" under Article 30 (1) of the former Labor Standards Act (wholly amended by Act No. 8293 of Jan. 26, 2007) in accordance with the business needs due to the reason attributable to the employer

[3] In order for a company to continuously maintain its activities, it is unnecessary to rearrange its labor force or adjust its supply and demand. As such, personnel orders, including the temporary retirement order, belong to the employer’s inherent authority, who is the personnel management authority, as a matter of principle, and as such, considerable discretion should be granted to the employer to the extent necessary for business operations. Moreover, barring any special circumstance, such as in violation of Article 30(1) of the former Labor Standards Act (amended by Act No. 8293, Jan. 26, 2007) or abuse of rights, preventing the worker from taking disciplinary action, such as dismissal, temporary retirement, suspension from office, reduction of salary, etc. without justifiable grounds, the issue of whether the temporary retirement order falls within the scope of legitimate personnel rights should be compared and compared to the business necessity of the pertinent temporary retirement order, etc., and the criteria for the selection of the person subject to the temporary retirement order should be reasonable, and the procedure required in the process of consultation with the labor union to which the worker belongs should be determined in full consideration.

[1] Article 30(1) of the former Labor Standards Act (amended by Act No. 8293, Jan. 26, 2007; see current Article 23(1)); Article 45(1) of the former Labor Standards Act (amended by Act No. 8372, Apr. 11, 2007; see current Article 46(1)) / [2] Article 30(1) of the former Labor Standards Act (amended by Act No. 8293, Jan. 26, 2007; see current Article 23(1)); Article 45(1) of the former Labor Standards Act (amended by Act No. 8372, Apr. 11, 2007; see current Article 46(1)) / [3] Article 83(1) of the former Labor Standards Act (amended by Act No. 8293, Apr. 26, 2007; see current Article 30(1)

[1] Supreme Court Decision 90Da18999 Decided December 13, 1991 (Gong1992, 497) / [3] Supreme Court Decision 2000Du8011 Decided December 26, 2002 (Gong2003Sang, 518), Supreme Court Decision 2003Da63029 Decided February 18, 2005 (Gong2005Sang, 463) Supreme Court Decision 2007Du20157 Decided April 23, 2009 (Gong2009Sang, 760)

Plaintiff Co., Ltd. (Law Firm Gyeong & Yang, Attorneys Lee Jae-soo et al., Counsel for the plaintiff-appellant)

The Chairman of the National Labor Relations Commission

Intervenor 1 and 10 others (Attorneys Seo-dilution et al., Counsel for the intervenor-appellant)

Seoul High Court Decision 2006Nu9698 decided May 3, 2007

The appeal is dismissed. The costs of appeal are assessed against the Plaintiff, including the part resulting from supplementary participation.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 45(1) of the former Labor Standards Act (wholly amended by Act No. 8372 of Apr. 11, 2007; hereinafter the same) (hereinafter referred to as "Article 45(1) of the former Labor Standards Act") provides that "Where an employer suspends his/her business due to a cause attributable to the employer, he/she shall pay 70/100 or more of the average wage to the relevant employee during the period of suspension of business: Provided, That where the amount equivalent to 70/100 of the average wage exceeds the ordinary wage, he/she may pay the ordinary wage as a shutdown allowance."

The court below held that Article 45 (1) of the former Labor Standards Act is a cause attributable to the employer, and therefore, it is only a provision compelling the company to pay an amount of not less than 70/100 of average wages to the relevant worker where it becomes unable to provide labor due to financial difficulties, lack of self-determination, lack of facilities at workplaces, business difficulties, etc., and on the premise that all temporary closure measures are not legitimate and justifiable if the company pays the above temporary closure allowances only when it pays the above temporary closure allowances. In light of the above legal principles and records, the court below held that the temporary closure leave of this case against the intervenor including the intervenor is not legitimate merely because it paid the allowances as alleged by the plaintiff. In light of the above legal principles and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to Article 45 (1) of the former Labor Standards Act as

2. Regarding ground of appeal No. 2

Article 45(1) of the former Labor Standards Act (amended by Act No. 8293, Jan. 26, 2007; hereinafter “former Labor Standards Act”) provides that “temporary retirement” shall include cases where a worker refuses or is unable to work against his/her will despite the existence of his/her intent to provide his/her labor under a labor contract (see Supreme Court Decision 90Da18999, Dec. 13, 199). This is a broad concept including “temporary retirement.” Meanwhile, Article 30(1) of the former Labor Standards Act (amended by Act No. 8293, Jan. 26, 2007; hereinafter “former Labor Standards Act”) provides that “An employer shall not dismiss, lay off, suspend, reduce, or take other disciplinary measures against a worker without any justifiable reason.” In this context, the term “temporary retirement” refers to cases where a worker is inappropriate to perform his/her duties, or his/her status arises, and where an employer is deemed to have an unfavorable reason for temporary retirement under Article 305(1) of the former Act.

Examining the records of this case in light of the above legal principles, the judgment of the court below that the temporary retirement of this case constitutes “temporary retirement” under Article 30(1) of the former Labor Standards Act is justifiable in its conclusion. In so doing, there were no errors by misapprehending the legal principles on the nature of the temporary retirement.

3. Regarding ground of appeal No. 3

In order for a company to continuously maintain its activities, it is unnecessary to rearrange its labor force or adjust its supply and demand. As such, personnel orders, including the temporary retirement order, belong to the unique authority of the employer who is the personnel management authority, in principle, to the extent necessary for the company’s business (see Supreme Court Decision 2003Da63029, Feb. 18, 2005). Accordingly, it cannot be deemed null and void unless there are special circumstances, such as in violation of Article 30(1) of the former Labor Standards Act prohibiting the worker from dismissing, temporarily suspending, suspending, reducing from office, or taking other disciplinary measures without justifiable grounds or abuse of rights. In a case where a temporary retirement order is issued for business reasons, whether the temporary retirement order falls within the scope of legitimate personnel rights should be compared and compared with the need for management such as the pertinent temporary retirement order, and the reasonable criteria for selecting persons subject to the temporary retirement order should be determined in the process of consultation with the labor union to which the worker belongs.

In full view of the adopted evidence, the lower court found the facts as indicated in its reasoning. The Plaintiff continued to increase the sales amount and operating income from 2003 to 2004, and the management status was improved, such as the conversion of operating income into black during the first half of 2004, and the sales amount or productivity per worker was increased compared to the previous year at the time of the instant temporary closure, and the number of overtime work in the Plaintiff was constantly conducted in almost all sectors after the instant temporary closure, and there is no objective evidence that the management manager in the instant case was mainly attributable to the existence of idle human resources, and it is difficult to recognize that the Plaintiff made every effort to avoid the instant temporary closure. In full view of the circumstances, it is difficult to view that the instant temporary closure is a legitimate measure under Article 30(1) of the former Labor Standards Act where it is inevitable to manage the instant temporary closure, and even considering the contents and preparation process of the agreement with the Trade Union and the Korean Metal Trade Union, the lower court determined that the instant temporary closure was unlawful, which was found unlawful.

In light of the above legal principles and records, we affirm this part of fact-finding and decision of the court below as just, and there is no error in the misapprehension of legal principles as to restrictions on temporary retirement under the Labor Standards Act as otherwise alleged in the

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal, including those resulting from participation, are assessed against the appellant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeon Soo-ahn (Presiding Justice)