[1] Whether a representative who was deprived of his/her power to pay a retirement allowance before 14 days elapse from the date on which the cause for the payment of the retirement allowance occurred in the case of a corporation constitutes a crime under Article 109(1) of the Labor Standards Act (negative in principle), and whether the grounds for the loss of power to pay are also included in the statutory loss (affirmative)

[2] The case affirming the judgment below which held that where the company was declared bankrupt before 14 days after the worker's retirement, the representative director of the company cannot be held liable for the crime under Article 109 (1) of the Labor Standards Act due to delayed payment of wages, etc.

[1] Articles 36 and 109(1) of the Labor Standards Act / [2] Articles 36, 109(1) of the Labor Standards Act, Articles 311, 382(1), 384, 473 subparag. 10, and 475 of the Debtor Rehabilitation and Bankruptcy Act

[1] Supreme Court Decision 94Do1477 delivered on November 10, 1995 (Gong1995Ha, 3959) Supreme Court Decision 2002Do5044 Delivered on November 26, 2002 (Gong2003Sang, 289) Supreme Court Decision 2005Do8364 Delivered on May 11, 2006 (Gong2006Sang, 1092)

Defendant

Prosecutor

Daegu District Court Decision 2009No1129 Decided July 16, 2009

The appeal is dismissed.

The grounds of appeal are examined.

1. As to ground of appeal No. 1 (Fraud)

This part of the grounds of appeal is merely the purport of criticizeing the selection of evidence and fact-finding which belong to the lower court’s exclusive jurisdiction, and thus does not constitute legitimate grounds of appeal.

2. As to ground of appeal No. 2 (Violation of the Labor Standards Act)

Article 36 of the Labor Standards Act provides that an employer shall pay wages, compensations, and all other money or valuables within 14 days from the time when the cause for the payment thereof occurred, thereby compelling the employee to liquidate legal relations early in order to promote the stability of the livelihood of retired workers, etc., while delaying the period required for such liquidation. Thus, a violation of Article 109(1) of the Labor Standards Act due to delayed payment of retirement allowances is established at the expiration of 14 days from the date when the cause for the payment occurred. Therefore, if the employer is a juristic person, the representative with the authority to pay retirement allowances, etc. at the expiration of 14 days is in principle responsible for the crime resulting from delayed payment, and the representative who lost such authority before the expiration of 14 days from the date when the said cause for payment occurred shall not be liable for such crime (see Supreme Court Decisions 94Do1477, Nov. 10, 1995; 200Do5044, Nov. 26, 2002).

The court below held that all property owned by the debtor at the time that the debtor is declared bankrupt shall belong to the bankrupt estate (Article 382(1) of the Debtor Rehabilitation and Bankruptcy Act), the debtor loses the right to manage and dispose of property that constitutes the bankrupt estate by declaration of bankruptcy (Article 384 of the same Act), and the right to manage and dispose of this property shall be exclusive to the trustee in bankruptcy (Article 384 of the same Act), the debtor's wage, retirement allowance, and accident compensation shall be foundation claims regardless of whether the time of occurrence is before or after the declaration of bankruptcy (Article 473 subparagraph 10 of the same Act), and the foundation claims shall be repaid frequently without bankruptcy proceedings (Article 475 of the same Act). In full view of the above provisions of the Debtor Rehabilitation and Bankruptcy Act, when the debtor is declared bankrupt, the representative director of the debtor company shall lose the right to pay wages, retirement allowance, etc., which is estate claims from the time of the bankruptcy, and the defendant shall not be found to be not guilty of the defendant's right to pay the above part of retirement allowance, etc.

Examining the judgment of the court below in light of the above legal principles and records, the above judgment of the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the exclusive right to manage and dispose of property and the establishment of violation of the Labor Standards Act

3. Conclusion

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cha Han-sung (Presiding Justice)