Plaintiff 1 and 45 others (Attorneys Go Jae-sik et al., Counsel for the plaintiff-appellant)

Korea Labor Welfare Corporation

August 22, 2007

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Jeju District Court 2007Ma122 deleted the dividend amount of KRW 82,319,941 from among the distribution schedule prepared by this court on May 18, 2007 with respect to the dividend procedure cases, and the amount stated in the corresponding column of the attached sheet, which is the dividend amount against the plaintiffs, shall be corrected as the amount stated in the corresponding column of "request amount" in the same Table.

1. Basic facts

A. The Plaintiffs were workers retired while serving in the department stores in the reason for the issuance of the company (hereinafter “non-party company”) and were entitled to KRW 3,974,714,368 in total for the last three months’ wages and retirement allowances for the last three years. The Defendant Corporation paid KRW 1,535,957,094 in total to the Plaintiffs as part of the last three months’ wages and retirement allowances for the last three years under Article 6 of the Wage Claim Guarantee Act (hereinafter “substitute payment”).

B. On the other hand, on November 10, 2006, before receiving the above substitute payment from Defendant Corporation, the Plaintiffs received a claim claim amounting to 100 million won out of the wages and retirement allowances against Nonparty Company, and received a claim seizure and collection order as the District Court 2006TTT5361 as to the claims held against Nonparty Company against Nonparty, etc.

C. Defendant Corporation received the provisional seizure order against the non-party of the non-party company that received the seizure and collection order by claiming KRW 1,535,957,094 on behalf of the Plaintiffs as the claim amounting to KRW 1,535,957,094.

D. Since then, the non-party deposited KRW 87,711,432 in this court as to the non-party company's obligation to return the lease deposit to the non-party company, and the executing court took the distribution procedure for the deposit in accordance with 2007tagi122, and on May 18, 2007, distributed the amount of KRW 100 million, which is the amount of the seized claim, to the plaintiffs, and KRW 1,535,957,094, which is the amount of the seized claim, to the defendant Corporation, in the same order. As a result, as to the plaintiffs, the distribution schedule (Evidence 3) was prepared to distribute the amount in the corresponding column of the attached Table to the defendant Corporation, and KRW 82,319,941, which is the amount of

[Judgment of the court below] Facts that there was no dispute over part of the grounds for recognition, entry of Gap evidence 1 through 3, purport of whole pleadings

2. The parties' assertion and judgment

A. The plaintiffs' assertion

In the event that the defendant Corporation pays a substitute payment to the plaintiffs who are workers pursuant to the Wage Claim Guarantee Act, the plaintiffs' wage claim against the non-party company and the defendant Corporation's substitute payment for the workers, in light of the legislative intent of the Labor Standards Act and the Wage Claim Guarantee Act that provide for the protection of wage creditors and the stabilization of their livelihood, the plaintiff's wage claim is not equal to the preferential order, and the execution court pays a substitute payment to the non-party company, despite the priority of the plaintiffs' wage claim, so that the execution court distributes the dividend in proportion to the above rights,

B. Determination

(1) In cases where the Defendant Corporation paid the wages and retirement allowances with preferential payment right under Article 37(2) of the Labor Standards Act to an employee on behalf of the insolvent employer, the wage claims of the employee, which have preferential payment right, are transferred to the Defendant Corporation in accordance with Article 7 of the Wage Claim Guarantee Act, and the employee’s wage claims are extinguished within that scope. Thus, the effect of the employee’s preferential payment right that the employee, who received substitute payment, received against the non-party company pursuant to Article 7 of the above Act by the Defendant Corporation, is transferred to the non-party company without changing its nature, and thus, it does not constitute a preferential payment right than the employee’s wage claims

(2) Article 7(1) of the Wage Claim Guarantee Act provides that “When the Minister of Labor has paid a substitute payment to an employee under the provisions of Article 6, he/she shall subrogate the right to claim the unpaid wages, etc. to the relevant employee within the limit of the amount paid.” If the Defendant Corporation provides that the wage claims of the employee who has received the substitute payment from the Defendant Corporation shall take precedence over the subrogated wage claims to the company due to the payment of the substitute payment, if the wage creditors who have not received the substitute payment from the employees of the company participate separately in the distribution procedure, the wage claims of the employee who received the substitute payment and the wage claims of the employee who received the substitute payment shall be distributed in proportion to the amount of each claim in the same order of preferential payment. Thus, the wage creditors who received the substitute payment may obtain more satisfaction than the wage creditors who received the substitute payment, and it is reasonable to exercise the right to claim the substitute payment with the Defendant’s priority to the payment claims of the said employee within the scope of the said Act.

(3) Thus, among the wage claims that the plaintiffs have against the non-party company, 100 million won of the claim amount attached by the plaintiffs and the substitute payment that the defendant Corporation paid to the plaintiffs by the defendant Corporation, the provisional seizure claim amount of 1,535,957,094 won is not erroneous in the distribution schedule of the court of execution prepared by distributing dividends in the same order

3. Conclusion

Therefore, the plaintiffs' claim against the defendant in this case is without merit, and it is dismissed. It is so decided as per Disposition.

[Attachment]

Judges Bo Jinia