In a case where the preparation or revision of the rules of employment is recognized to be reasonable by social norms, whether the application may be denied solely on the ground that workers’ collective decision-making does not consent (negative), and whether the preparation or revision of the rules of employment is reasonable by social norms

In principle, it is not permissible for an employer to unilaterally impose working conditions by depriving workers of their rights or interests through the preparation and revision of new rules of employment. However, even when considering the necessity and content of the enactment or revision of the rules of employment in question and the degree of disadvantages suffered to the workers, the application of the rules of employment may not be denied solely on the ground that there is no consent from the workers subject to the previous rules of employment or collective decision-making methods in order to recognize the reasonableness of the rules of employment in terms of social norms. Furthermore, the determination of reasonableness in social norms ought to be made by comparing the contents before and after the revision of the rules of employment clearly based on the degree of disadvantages suffered to the workers in itself, the necessity and degree of the amendment, reasonableness of the rules of employment after the amendment, the circumstances leading to the amendment of the rules of employment in question, including the improvement of the rules of employment, and the legislative intent of the rules of employment in relation to the increase in employer competitiveness and competitiveness arising from the amendment of the rules of employment in the future and after the revision of the rules of employment, should also be made based on the legislative intent of the Act.

Article 94(1) of the Labor Standards Act

Supreme Court Decision 2009Da32362 Decided January 28, 2010 (Gong2010Sang, 401)

Plaintiff 1 and 2 others (Law Firm Sami General Law Office, Attorneys Kim Young-ok, Counsel for the plaintiff-appellant)

Hotel Pream Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Lee Jong-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2010Na87995 decided April 13, 2012

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. In principle, imposing unfavorable working conditions by unilaterally depriving workers of their rights or interests through the formulation and revision of new rules of employment is not permissible. However, even if the preparation or revision of the said rules of employment takes into account the necessity and content of the necessity and degree of disadvantage to be suffered by the workers, if it is recognized that it still is reasonable in terms of social norms to the extent that the legal norm of the pertinent provisions remains acceptable, its application cannot be denied solely on the ground that there is no consent by the collective decision-making method of the workers subject to the previous rules of employment or the rules of employment. In addition, to recognize that the establishment or revision of the rules of employment is reasonable in terms of social norms, it does not go against the legislative intent of the Labor Standards Act that intends to protect workers, such as substantial disadvantage to the workers, and thus, it should be determined by considering the degree of disadvantage suffered by the workers in itself due to the revision of the rules of employment after comparing before and after the revision, the necessity and degree of amendment of the rules of employment, reasonableness of the contents after the amendment, target (subject), etc. of the rules of employment regulations at issue 20.

2. The court below acknowledged the facts based on its adopted evidence. The "standard plan for granting position positions" and the "plan for changing the salary system for part of the bonus to the executives and employees" which provide that the executives and employees may be granted the position of team members shall be changed disadvantageously to the executives and employees. However, around May 207, the defendant prepared the "plan for granting position" and the "plan for changing the salary system for the executives and employees" to efficiently place the human resources to overcome business crisis at the time of management crisis and enhance workers' desire to work. This means the conversion of the personnel system based on the annual salary class and salary class increase into the favorable system to maximize their work performance and to maximize their work performance. The court below determined that the defendant, even if some of the executives and employees were given a disadvantage to the executives and employees, the defendant did not unfairly consent to the change of the remuneration system and the "plan for the executives and employees" to the majority of the executives and employees," and that the defendant did not unfairly consent to the change of the remuneration system and the opinion that the majority of the executives and employees were given.

However, in light of the above legal principles, even considering the content and degree of the employer's necessity of revision and the reasonableness of the contents of the rules of employment after the revision, considering the circumstances acknowledged by the court below, ① since the employees of Grade 1 and 2 were able to be in charge of the previous work by the employees of Grade 3 through 5 in accordance with the defendant's revised guidelines for granting of new position, the disadvantage of the employees subject to disciplinary action is not small. ② The necessity and degree of revision of the rules of employment seems to be insufficient, ② there is insufficient objective data to recognize that there is an urgent or significant need and degree of revision of the rules of employment. ③ Although multiple workers are directly disadvantaged at the time of the amendment of the rules of employment within one working condition system, if only some workers are expected to be in charge of the new rules of employment after the amendment, only some workers are given consent from the employees of Grade 3 and 5, including those expected to be subject to the revised rules of employment (see, e.g., Supreme Court Decision 2009Da37979, Dec. 4, 2009).

Nevertheless, the lower court determined otherwise solely on the grounds indicated in its reasoning. In so doing, it erred by misapprehending the legal doctrine on amendment to the rules of employment, thereby adversely affecting the conclusion of the judgment.

3. Therefore, without further proceeding to decide on the remaining grounds of appeal, 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)