[1] Standard for determining whether a wage, based on the evaluation of work performance of an employee, is ordinary wage as a fixed wage

[2] In a case where Company A paid performance-based performance-based incentives calculated in the formula of “the monthly amount of annual salary for the preceding year 】 (the internal evaluation payment rate + the evaluation performance-based performance-based payment rate + the differential financial resources + the differential payment rate)” based on the company performance evaluation results and the internal management performance evaluation for the preceding year 】 (the case holding that the fixedness of performance-based performance-based incentives including the internal evaluation pay received by Company B, etc. was not recognized as wages for the preceding year on the ground that the performance-based performance-based incentives including the internal evaluation pay received by Company B, etc. were set at the time of payment for the preceding year

[1] Article 2 (1) 5 of the Labor Standards Act, Article 6 (1) of the Enforcement Decree of the Labor Standards Act / [2] Article 2 (1) 5, Articles 56 and 60 of the Labor Standards Act, Article 6 (1) of the Enforcement Decree of the Labor Standards Act

[1] Supreme Court en banc Decision 2012Da89399 Decided December 18, 2013 (Gong2014Sang, 236)

Attached Table 1 is as shown in the “Plaintiff’s List (Appellant)” (Attorney Kim Young-deok, Counsel for the plaintiff-appellant)

Attached Form 2 is as shown in the List of Plaintiffs (Attorney Kim Young-deok, Counsel for the plaintiff-appellant)

Attached Table 3 is as indicated in the “Plaintiff’s List (Appellant and Appellee)” (Attorney Kim Young-deok, Counsel for the plaintiff-appellant)

Han ElectricPPP Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Park Sang-min et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2017Na2032242 decided June 1, 2018

All appeals are dismissed. Of the costs of appeal, the costs of appeal by the Plaintiffs indicated in the List of Plaintiffs 1 (Appellants) and the List of Plaintiffs 3 (Appellants and Appellee) are assessed against the above Plaintiffs, and the costs of appeal by the Defendant are assessed against the Defendant

The grounds of appeal are examined.

1. Judgment on the grounds of appeal by the Plaintiffs listed in the Plaintiffs’ List (Appellants) and the Plaintiffs’ List (Appellants and Appellee) in Attached Table 1 and Attached Table 3 (hereinafter “Plaintiffs”).

A. As to the allegation in the grounds of appeal on the nature of internal performance-based ordinary wages

1) The judgment of the court below

After finding the facts as indicated in its holding, the lower court determined that the internal evaluation wage cannot be deemed as having satisfied the fixedness required in ordinary wages because it is difficult to determine whether the additional conditions have been fulfilled at the time of providing labor at a voluntary date, and it is difficult to deem that the minimum payment was finalized, on the grounds that it is difficult to view that it is difficult to clearly distinguish the internal evaluation wage and the performance evaluation rating from the performance-based performance rating, and even if it is possible to calculate the amount separately, the differential financial resources should be deducted from the amount calculated based on the internal evaluation wage payment rate.

2) Judgment of the Supreme Court

A) The determination of the work performance of an employee during the period for which a payment was made based on the evaluation can generally be deemed to have been denied as a fixed wage for the period for which a payment was made. However, if a minimum amount of payment has been determined, such as where a certain amount of payment was paid even when a certain amount of payment was paid for work performance, the minimum amount of payment can be deemed to be a fixed wage.

However, in a case where a worker’s wage for the pertinent year is determined according to the worker’s work performance during the pertinent year, if the payment of a certain amount or amount of the wage is fixed during the pertinent year, the wage shall be deemed to fall under a fixed wage in the pertinent year. However, even if a wage is determined based on an evaluation of work performance during the previous year and the payment of the wage is made during the pertinent year, the fixedness as a wage for the previous year shall not be recognized if there are special circumstances to deem that only the time when the payment was made for the previous year is determined during the pertinent year. In this case, even if a certain amount of wage is guaranteed even if the worker’s work performance is the lowest level, the fixed wage for the previous year may be deemed to fall under a certain wage for the previous year (see Supreme Court en banc Decision 2012Da89399, Dec. 18, 2013).

B) According to the reasoning of the lower judgment and the record, the following circumstances are revealed.

(1) In the instant lawsuit, the Plaintiffs asserted that the total performance-based incentives that contain internal evaluation pay constituted ordinary wages for the pertinent year as remuneration for work for the pertinent year, and the Defendant asserted that performance-based incentives constitute remuneration for work in the previous year.

(2) The Defendant’s rules on the implementation of the employee annual salary regulations stipulate that performance-based incentives shall be paid only to a person who was working on the date of payment, and the payment date is set as the specific date of the previous year.

(3) A person who retired prior to the payment of performance-based incentives has received performance-based incentives in proportion to the number of working days in the previous year. On the other hand, the new participant in the current year seems to have never received performance-based incentives that are paid in the current year because there is no working

(4) A performance-based performance-based performance-based performance bonus shall be paid on the basis of the monthly amount of the annual salary based on the basic annual salary on December 15 of the preceding year, and 50% of the performance-based performance-based performance bonus shall be paid in March and September, and the calculation of the performance-based performance-based performance bonus shall be made by reflecting the circumstances, such as absence from office in June and December. In this case, the performance-based performance-based performance bonus for March and June from December 16 of the preceding year to June 15 of the preceding year. The performance-based performance-based performance bonus for September and December from June 16 of the preceding year to December 15 of the preceding year.

(5) The employee annual salary rules of the defendant provide that "Article 13 (Payment of Performance Incentives) (1) The annual payment rate of the performance evaluation performance rating of the company shall be based on the results of the performance evaluation of the company and shall be differentiated according to the results of the internal performance evaluation of the previous year. (2) The detailed matters concerning the performance evaluation performance rating and the payment of internal evaluation pay shall be separately determined." The performance rules of the employee annual salary rules provide that "The performance-based performance rating of the company may be differentiated according to the results of the performance evaluation of the management

(6) A performance-based performance-based incentive that the Defendant paid to the Plaintiffs is calculated in the formula of ① monthly amount of the annual salary in the preceding year 】 (management performance rating - differential revenue + differential payment rate) 】 by the year 2011 x ② monthly amount of the annual salary in the preceding year x (internal evaluation rate + management evaluation performance performance performance payment rate + + differential payment rate + differential payment rate) . Such calculated performance-based performance-based incentives are divided on December 4, 201.

(7) The employee annual salary rules, etc. do not stipulate the purport that a certain amount of performance-based incentives should be guaranteed and paid even if a worker receives the lowest grade.

C) We examine the above circumstances in light of the legal principles as seen earlier.

(1) The Plaintiffs’ performance-based incentives, including the internal evaluation pay, are determined for the pertinent year only when the wages for the previous year were paid.

(2) It is reasonable to view that the internal evaluation rate of performance-based incentives is clearly distinguishable from that of the management evaluation performance rating, and that the internal evaluation rating also constitutes the subject of differential payment. Moreover, it is difficult to readily conclude that the Plaintiffs had minimum amount of performance-based incentives in the previous year at the time of providing overtime, night, and holiday work on the previous day.

(3) Ultimately, performance-based incentives, including internal evaluation pay, cannot be recognized as fixedness as wages for the previous year.

D) Although the reasoning of the lower judgment did not clearly state the internal performance rating for a year’s wage, the lower court did not err by misapprehending the legal doctrine on ordinary wage, contrary to what is alleged in the grounds of appeal, thereby adversely affecting the conclusion of the judgment.

B. As to the ground of appeal on amendment to the rules of employment

The lower court rejected the Plaintiffs’ assertion that the deduction of differential financial resources from the deduction of differential financial resources from the rate of management evaluation performance by the year 2011 constitutes an amendment to the rules of employment unfavorable to workers, and that the deduction of differential financial resources from the sum of the management evaluation performance payment rate and the internal evaluation payment rate from the year 2012 constitutes an amendment to the rules of employment unfavorable to workers, and that the Plaintiffs’ assertion that the deduction is invalid without the consent of

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine regarding amendment to the rules of employment.

2. Judgment on the Defendant’s grounds of appeal

The lower court determined that overseas allowances paid monthly to “overseas dispatch employees” by class are wages paid according to the standard that the labor itself was paid in the special area where the labor is in itself in a foreign country, and thus constitutes ordinary wages.

Examining the reasoning of the lower judgment in light of relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine on wages and ordinary wages, contrary to what is alleged in the grounds of appeal.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal by the plaintiffs are assessed against the plaintiffs, and the costs of appeal by the defendant are assessed against the defendant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment 1] List of Plaintiffs (Appellants): Omitted

[Attachment 2] List of Plaintiffs (Appellee): omitted

[Attachment 3] List of Plaintiffs (Appellants and Appellee): Omitted

Justices Noh Tae-tae (Presiding Justice)