[1] The method to determine which place of business includes bonuses, etc. as the basis for the calculation of retirement allowances under the wage regulations of a certain place of business

[2] In a case where a retirement allowance calculated according to the collective agreement or rules of employment, etc. at the time of a worker's retirement falls short of the lower limit of the retirement amount stipulated under Article 8 (1) of the Guarantee of Workers' Retirement Benefits Act, whether the lower limit should be paid (affirmative), and in a case where the retirement amount exceeds the lower limit of the retirement amount stipulated under the above provision, whether the retirement allowance may be paid more disadvantageous

[3] In a case where Eul et al., an employee of Gap corporation, received retirement allowances calculated based on the interim settlement of the retirement allowances with Gap company, and part of the annual bonuses among family allowances and special bonuses paid by Gap company, were not included in average wages, the case holding that the court below erred in the misapprehension of legal principle in holding that although family allowances and bonuses are included in average wages as the basis of calculation of retirement allowances in the wage regulations of Gap company, although family allowances and bonuses are below the amount guaranteed by the Guarantee of Workers' Retirement Benefits Act, the interim retirement allowances calculated by excluding family allowances and bonuses from average wages may be paid

[1] In a case where the wage rules in a certain place of business include bonus, etc., it shall be interpreted by interpreting the wage rules, and it shall be interpreted by comprehensively taking into account various circumstances such as the workplace’s payment practices and the process and contents of the amendment of the wage regulations.

[2] When a collective agreement or rules of employment that were enforced at the time of retirement of a worker stipulate the retirement allowance, the employer shall pay the retirement allowance calculated in accordance with such rules. Provided, That if the retirement allowance calculated in accordance with such rules of retirement falls short of the lower limit of the amount of retirement stipulated in Article 8(1) of the Guarantee of Workers' Retirement Benefits Act (hereinafter “Retirement Benefits Act”), the said lower limit must be paid. However, this does not mean that if the retirement allowance exceeds the lower limit of the amount of retirement stipulated in the retirement Benefits Act, it shall not be said that the retirement

[3] Where Eul et al., a worker Eul et al., received retirement allowances calculated based on the interim settlement of the retirement allowance with Gap company, and part of the annual average bonus paid by Gap company during the calculation of the retirement allowance does not include as average wages, the case held that the judgment below erred by misapprehending the legal principles on the payment of interim retirement allowances except for the average wages, since family allowances and bonuses are included in the average wage determined based on the calculation of the retirement allowance under the wage rules of Gap company, since family allowances and bonuses are calculated based on the contents of the wage rules of Gap company, family allowances and family allowances and bonus payment circumstances, etc., Gap company should pay Eul et al. with the average wage calculated based on the calculation of the retirement allowance under the wage rules, and it is not allowed to calculate and pay the retirement allowance contrary to the wage rules, and even if the amount exceeds the amount guaranteed by the Act on the Guarantee of Workers' Retirement Benefits (hereinafter "Retirement Benefits Act"), although it is not different, even if it does not fall short of the amount guaranteed by the Act on the Guarantee of Workers' Benefits.

[1] Article 8 (1) of the Guarantee of Workers' Retirement Benefits Act, Article 2 (1) 5 and 6 of the Labor Standards Act / [2] Article 8 (1) of the Guarantee of Workers' Retirement Benefits Act / [3] Article 8 of the Guarantee of Workers' Retirement Benefits Act, Article 2 (1) 5 and 6 of the Labor Standards Act

[1] Supreme Court Decision 9Da71276 delivered on March 27, 2001 (Gong2001Sang, 992) / [2] Supreme Court Decision 76Da502 delivered on October 26, 1976, Supreme Court Decision 2005Da25113 Delivered on July 12, 2007 (Gong2007Ha, 1233)

See Attached List of Plaintiffs (Law Firm Inn, Attorneys Kwon Du-seop et al., Counsel for the plaintiff-appellant)

Gangwonland Co., Ltd. (Law Firm Barun, Attorneys Kim Jae-hyung et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2016Na2007607 decided May 18, 2016

Of the lower judgment, the part against Plaintiffs 67, 69, 73, 90, 91, and 92 and the part against the remaining Plaintiffs are reversed, and that part of the case is remanded to the Seoul High Court. The Defendant’s appeal is dismissed.

The grounds of appeal are examined.

1. Basic factual basis

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

On December 31, 2011, the Plaintiffs, who are the Defendant’s employees, received retirement allowances calculated based on the interim settlement of accounts between the Defendant and the Defendant. In calculating retirement allowances, the Defendant calculated part of the annual bonus out of family allowances and special bonuses that the Defendant paid every month (hereinafter “instant bonus”) without being included in the average wage.

The Defendant’s benefit provision provides that “The amount calculated by dividing the average wage by the total number of days of the period concerned the wage paid in three months in the calendar from the day before the cause for calculation occurred and all other money and valuables paid in the name of the calendar (Article 3).” (Article 3) The Defendant’s benefit provision provides that the average wage, which forms the basis for the calculation of the retirement allowance, shall include the amount calculated by dividing the bonus paid within one year from the date of retirement by 12 (Article 26), and that the family allowance shall be included in the allowances corresponding to the benefit (Article 17).

The Defendant’s benefit provision was originally required to apply the progressive system in the calculation of retirement allowances, but the Defendant and the Defendant’s trade union agreed on the fractional transition since January 1, 2010 and the progressive rate as of December 31, 2009 and revised the benefit provision.

2. Family allowances and whether the instant bonus is the average wage that is the basis for calculation of retirement allowances (Defendant’s ground of appeal)

In a certain workplace’s wage provision, whether bonus, etc. is included in the basis for the calculation of retirement pay, it shall be interpreted by the interpretation of the wage provision. It shall be interpreted by comprehensively taking into account various circumstances such as the practice of payment in the workplace and the process and contents of the amendment of the wage provision (see Supreme Court Decision 9Da71276, Mar. 27, 2001, etc.).

In addition to these legal principles, comprehensively taking account of the contents of the Defendant’s benefit provision, the details and practices of the payment of the instant bonus and family allowance, it is reasonable to deem that the instant bonus and family allowance are included in the average wage determined based on the Defendant’s benefit calculation.

Although the reasoning of the lower judgment is somewhat insufficient, the lower court’s conclusion that the instant bonus and family allowances are included in the average wage that serves as the basis for calculating the Plaintiffs’ retirement allowances is justifiable. In so determining, the lower court did not exhaust all necessary deliberations, contrary to what is alleged in the grounds of appeal, exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or misapprehending the legal doctrine

3. Whether the defendant's calculation method of retirement allowance is legitimate (the plaintiff's grounds of appeal)

A. When a collective agreement or rules of employment that were enforced at the time of retirement of a worker stipulate the retirement allowance, the employer shall pay the retirement allowance calculated accordingly: Provided, That if the retirement allowance calculated in accordance with such rules of retirement does not reach the lower limit of the amount of retirement stipulated in Article 8(1) of the Guarantee of Workers' Retirement Benefits Act (hereinafter “Retirement Benefits Act”), the said lower limit must be paid (see, e.g., Supreme Court Decisions 76Da502, Oct. 26, 1976; 2005Da25113, Jul. 12, 2007). However, this does not mean that if the retirement allowance exceeds the lower limit of the amount of retirement stipulated in the Retirement Benefits Act, it does not mean that the retirement allowance would be paid more unfavorable than that stipulated in the rules of retirement benefits.

B. The lower court determined that the amount of retirement benefits received by the Plaintiffs is not unlawful unless the amount of retirement benefits paid by the Plaintiffs falls short of the amount guaranteed by the Retirement Benefits Act, as a result of applying the progressive retirement system, even if family allowances and the instant bonus

C. However, the lower judgment is difficult to accept for the following reasons.

The Defendant shall pay the Plaintiffs an interim retirement allowance calculated by applying the rate of continuous employment and payment of retirement allowances as stipulated by the labor-management agreement to the average wage calculated including family allowances and the instant bonus pursuant to the wage rules. The Defendant’s calculation and payment of retirement allowances against the wage rules is not permissible, and it does not change even if the amount exceeds the amount guaranteed by the Act on Retirement Benefits.

D. Nevertheless, the lower court determined that, regardless of whether the retirement benefit Act was contrary to the benefit provision, even if the amount is below the amount guaranteed, it would be an interim settlement retirement allowance calculated by excluding family allowances and the instant bonus from the average wage. In so doing, it erred by misapprehending the legal doctrine on the duty to pay retirement allowances. The Plaintiffs’ ground of appeal assigning this error is with merit

4. Conclusion

The Plaintiffs’ final appeal is with merit, and the part against Plaintiffs 67, 69, 73, 90, 91, and 92 of the lower judgment against the Plaintiffs is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The Defendant’s final appeal is all dismissed, and is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment] List of Plaintiffs: Omitted

Justices Lee Dong-won (Presiding Justice)