In cases where the contract period of a contractor and a previous service company expires, and a new service company is in trust that the employment of workers belonging to the previous service company will be established by succeeding to the employment of workers belonging to the previous service company while concluding a service contract entrusted with the relevant work, and thus the right to expect the employment succession is recognized, the validity of the refusal of employment succession without reasonable grounds of the new service company (negative) and the method of determining whether the right to expect the employment succession

Unless there exist special circumstances, a new service company has the right to expect that the new service company will succeed to employment as a new service company, barring special circumstances, if the new service company succeeds to employment of workers belonging to the previous service company, and the new service company refuses to succeed to employment without any reasonable reason even though the worker wants to succeed to employment, is not effective as against the worker. In such a case, whether the new service company is entitled to expect to succeed to employment of the previous service company, including specific provisions that the new service company will succeed to employment of workers belonging to the previous service company, the purpose and background of concluding the relevant service contract, the contents of the service contract and the relevant work-related circumstances surrounding the previous service company, etc., should be determined comprehensively considering whether the new service company includes provisions that the new service company will succeed to employment of workers belonging to the previous service company.

Article 23 of the Labor Standards Act

Supreme Court Decision 2007Du1729 Decided April 14, 201 (Gong2011Sang, 925) Supreme Court Decision 2014Du45765 Decided November 10, 2016 (Gong2016Ha, 1930)

Plaintiff (Law Firm Han-ro, Attorneys Seo-tae et al., Counsel for the plaintiff-appellant)

The Chairman of the National Labor Relations Commission

Defendant 1 and two others (Law Firm East Sea, Attorneys Choi Won-ho et al., Counsel for the defendant-appellant)

Daejeon High Court Decision 2016Nu11696 decided October 7, 2016

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. Whether the Plaintiff bears the obligation to succeed to employment against the Intervenor joining the Defendant (hereinafter “ Intervenor”) (Ground of appeal No. 1)

A. In a case where a contractor entrusts part of the work within the workplace to another company (hereinafter “service company”), and a new service company has employed fixed-term workers until the termination of the pertinent service contract for the performance of the work entrusted by the service company. In a case where a new service company enters into a service contract with the relevant service company upon entrustment of the relevant work, barring special circumstances, the new service company is deemed to have the right to expect that the new service company will succeed to employment as a new service company, barring special circumstances. In such a case where the expectation right to employment succession is recognized, refusal of employment succession by the new service company without reasonable grounds is not effective for the relevant worker (see Supreme Court Decisions 2007Du1729, Apr. 14, 201; 2007Du1729, Nov. 10, 2016; 2015Du4575, etc., etc., the employer’s specific intent to determine whether the new service company’s right to succeed to employment should be acknowledged as a new employee’s labor contract.

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

1) The Ulsan Atomic Energy Headquarters Co., Ltd. (hereinafter “the Ulsan Atomic Energy Headquarters”) has concluded a service contract with the outsourcing service company on a one-year or two-year basis with respect to the cleaning work of the first power plant, etc. in Ulsan Atomic Energy Agency (hereinafter “the Ulsan Atomic Energy Headquarters”) through the Public Procurement Service.

2) Cheongdo Construction Co., Ltd. (hereinafter “Cheongdo Construction”) entrusted the first power plant cleaning services (hereinafter “instant cleaning services”) to the Ulsan Nuclear Headquarters from September 1, 2013 to August 31, 2014. The intervenors joined the Cheongdo Construction and worked at the place of business of the Ulsan Nuclear Headquarters up to August 31, 2014.

3) On August 5, 2014, the Plaintiff engaging in cleaning service business under the trade name “(trade name 1 omitted)” participated in the instant cleaning service open bid and received a successful bid on August 27, 2014. On the same day, the Plaintiff concluded a contract for the instant cleaning service contract with the Ulsan Nuclear Headquarters during the contract period from September 1, 2014 to August 31, 2015 (hereinafter “instant service contract”).

4) The specifications for cleaning services at the first nuclear power plant (hereinafter “instant cleaning services specifications”) at the time when the term “nuclear power plant cleaning services specifications” included in the terms of the instant services agreement (hereinafter “instant cleaning services specifications”) is as follows.

(1) When intending to employ an employee, the counter-party to a contract shall employ only persons who are able to perform the relevant duties, and shall maintain the employment of the said employee who has served as present during the period of employment succession and service contract (Article 10 (1) of the General specifications).

(2) A contract of employment shall be concluded on an annual basis (Article 10 (4) of the General Specifications).

(3) In principle, the counter-party to a contract shall employ employees of an existing cleaning company in consideration of the special characteristics of the nuclear power plant when securing cleaning service workers, except in extenuating circumstances. In cases of new recruitment of vacant workers, the number of employees in other areas may be employed with the approval of the Supervisory Board when the supply and demand of neighboring residents is impracticable, and the employed workers shall maintain the employment during the service contract period (the special term specifications No. 4(d)) except in extenuating circumstances.

5) The service company that performed the instant cleaning service contract has succeeded most to the employment of workers employed by the previous service company, barring any special circumstance. The Plaintiff was entered in the instant cleaning service contract from September 1, 2007 to August 31, 2008, even before the conclusion of the instant cleaning service contract, and at that time, succeeded to the employment of 23 workers employed by the previous service company. The Intervenor 2 was entered into around March 1997 (mutual name 2 omitted), and the Intervenor 3 succeeded to employment in order each time when the service company in charge of the instant cleaning service is changed (mutual name 3 omitted).

6) On September 1, 2014, the Plaintiff rejected four workers, including the intervenors, who worked for the Cheongri Construction on September 1, 2014 (hereinafter “instant refusal to succeed to employment”).

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

1) Of the instant cleaning services specifications, Article 10(1) of the General Specifications and Article 4(d) of the Special Terms and Conditions are specifically specified in order to prevent accidents, etc. that may occur due to the frequent change of service companies, taking into account the characteristics of nuclear power plants, and to ensure the employment stability of workers. The Plaintiff appears to have concluded the instant service contract on the premise that the Plaintiff accepted the instant contract. Ultimately, according to the instant service contract, the Plaintiff, the operator of a new service company, is obligated to succeed to employment of the intervenors who worked in the previous service company, and maintain their employment until the termination of the instant service contract, barring special circumstances.

2) The instant cleaning services ought to be carried out on a regular and continuous basis. At each time the service company is changed, a new service company has formed a practice to succeed most to the employment of workers employed by the previous service company.

3) The Plaintiff concluded the instant service contract with a well-known practice of employment succession, and the Intervenor also trusted that the Plaintiff succeeded to employment as the Plaintiff from September 1, 2014 and continued to conduct the instant cleaning service business, barring special circumstances, according to the content of the instant service contract and the instant cleaning service succession practices.

4) In full view of the above circumstances, it is reasonable to view that the Intervenor, as an operator of a new service company, the right of expectation to succeed to employment as the Plaintiff that entered into the instant service contract, was recognized. If there is no reasonable ground for the refusal of employment succession made against the Intervenor who demanded employment succession, such refusal has no effect on the Intervenor, as in the case of unfair dismissal.

D. In the same purport, the lower court’s determination that the Plaintiff assumed the obligation to succeed to employment against the Intervenor is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the obligation to succeed employment. The Supreme Court precedents cited in the grounds of appeal differ from the instant case, and thus,

2. Whether there is a reasonable ground to deny the Plaintiff’s refusal to succeed employment to the Intervenor (ground of appeal No. 2)

For the reasons indicated in its holding, the lower court rejected the Plaintiff’s assertion that there was a reasonable ground to refuse employment succession against the Intervenor, on the grounds that the Plaintiff did not have any evidence to acknowledge the circumstances incurred by the Plaintiff as a reason for refusing employment succession, or that there was insufficient reason to refuse employment succession. Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by failing to exhaust all necessary deliberations, exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party, including the portion arising from the participation in the appeal. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Dong-gu (Presiding Justice)