[1] Whether it is against the principle of trust and good faith for an employee to add wages without a labor-management agreement that excludes ordinary wages to ordinary wages and to claim additional statutory allowances based on such added amount to ordinary wages (negative)

[2] In a case where the issue is whether seeking additional statutory allowances calculated by adding the achievements annual salary to ordinary wages is contrary to the principle of good faith, the case affirming the judgment below holding that Eul's claim cannot be deemed as violating the principle of good faith on the grounds that there exists a labor-management agreement excluding the achievements annual salary from ordinary wages, or that such labor-management practice or implied agreement cannot be deemed as having been reached

[1] In a case where the contents of a labor-management agreement, such as a collective agreement, are null and void in violation of the Labor Standards Act’s compulsory provisions, the assertion of invalidation is an exercise of a right contrary to the principle of good faith (hereinafter “new rules”), and thus, the legislative intent of which is stipulated as compulsory provisions would be reversed. Therefore, such assertion cannot be deemed to be contrary to the principle of good faith. However, notwithstanding the compulsory nature of the Labor Standards Act, the assertion of invalidity of the labor-management agreement cannot be permitted as it goes against the principle of good faith only in exceptional circumstances where it satisfies the general requirements for applying the principle of good faith and where there

If a labor-management-management-management-management-management-management-based agreement to exclude a regular bonus from the ordinary wage calculation criteria on the premise that a regular bonus does not constitute ordinary wage, and then set the level of wage, it may be against the good faith that an employee’s demand for the payment of an additional statutory allowance based on adding a regular bonus to ordinary wage would cause excessive financial difficulties to the employer or endanger the company’s existence. However, with respect to a wage that does not have a labor-management-management-management-management-based agreement to exclude the ordinary wage, it cannot be deemed that the employer’

[2] In a case where the issue is whether seeking additional statutory allowances calculated by adding the annual salary to ordinary wages is contrary to the principle of good faith by Eul, etc., who are office workers of the automobile manufacturing company Gap, were derived from the existing regular bonus, the case affirming the judgment below holding that although the achievement annual salary is derived from the existing regular bonus, it is difficult to view it as identical to the regular bonus, and the achievement annual salary was introduced together with the implementation of the annual salary system for the office workers; the implementation of the annual salary system, including the performance annual salary, was conducted in the way that individual consent is obtained from the office workers; there was no consultation between labor and management; and the office workers including Eul, including the time, did not join the labor union; it cannot be deemed that there was a labor-management agreement to exclude the performance salary from ordinary wages; and it cannot be deemed that such labor-management practice or implied agreement has been reached.

[1] Article 2(1) of the Civil Act; Articles 2(1)5, 15, 56, and 60 of the Labor Standards Act; Article 6(1) of the Enforcement Decree of the Labor Standards Act / [2] Article 2(1) of the Civil Act; Articles 2(1)5, 15, 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)

See Attached List of Plaintiffs (Law Firm Jeongse, Attorneys Regular-type et al., Counsel for the plaintiff-appellant)

Korea District Court Decision 201Na14144 decided May 1, 201

Supreme Court Decision 2013Da69705 Decided November 26, 2015

Seoul High Court Decision 2015Na31393 decided September 1, 2017

All appeals are dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Whether ordinary wages constitute grounds of appeal (Ground of appeal No. 5)

The lower court determined that the Defendant’s performance annual salary, survey and research allowances, organizational management allowances, and family allowances constituted ordinary wages paid in consideration of contractual work, on the ground that the amount of the principal’s share, when the employee provided contractual work, becomes final and conclusive.

The judgment of the court below is just in accordance with the purport of the judgment remanded. In so determining, the court below did not err by misapprehending the legal principles on ordinary wages.

2. Whether the principle of good faith is violated (ground of appeal Nos. 1 and 4)

A. Article 2(1) of the Civil Act provides, “The exercise of rights and the performance of duties shall be in accordance with good faith” with respect to the principle of trust and good faith (hereinafter “the principle of trust and good faith”). The principle of trust and good faith is an abstract norm that a party to a legal relationship should not exercise rights or perform duties in a manner that violates the equity or trust in consideration of the other party’s interests, and is acting as a general principle leading to the overall legal order. In order to deny the exercise of rights on the grounds that the principle of trust and good faith is contrary to the principle of trust and good faith, trust should be provided to the other party or the other party’s trust should be objectively deemed reasonable, and the exercise of rights against such other party’s trust should reach an extent that it is not acceptable in light of the concept of justice (see, e.g., Supreme Court Decisions 2003Da2390, 2406, Apr. 22, 2003; 689Da1491, Feb. 10, 20111).

If the contents of a labor-management agreement, such as a collective agreement, are null and void in violation of the Labor Standards Act’s compulsory provisions, it would result in denying the legislative intent of the labor-management agreement on the ground that it is an exercise of rights against the good faith principle. Therefore, such assertion is not a violation of the good faith principle. However, the attitude of judicial precedents is that asserting the invalidity of a labor-management agreement is not permissible only in exceptional cases where the general requirement for applying the good faith principle is met and there are special circumstances where the good faith principle is preferentially applied despite the nature of the Labor Standards Act’s compulsory provisions (see Supreme Court en banc Decision 2012Da89399, Dec. 18, 2013).

In a case where a labor-management-management-management-management-management-based agreement to exclude a regular bonus from the ordinary wage calculation standard on the premise that a regular bonus does not constitute ordinary wage, and the level of wage is determined based on such agreement, it may be against the principle of good faith to put excessive financial burden on an employer out of an excessive financial burden or endanger the company’s existence (see Supreme Court en banc Decision 2012Da89399, supra). However, with respect to wages for which there is no labor-management-management-management-management-management-based agreement to exclude from ordinary wage, even if an employee claims additional statutory allowances based on such agreement, it cannot be deemed as contrary

B. On the following grounds, the lower court rejected the Defendant’s assertion that the Plaintiffs’ claim seeking additional statutory allowances violates the good faith principle by including the achievements annual salary in ordinary wages.

Although the performance salary is derived from the existing regular bonus, it is difficult to view it as the same as the regular bonus in light of the wage system, the amount determination structure, and the method of payment, etc. of the Defendant company. The achievement annual salary was introduced together with the implementation of the annual salary system for workers in office. The implementation of the annual salary system, including the achievement annual salary, was conducted by the method of obtaining individual consent of the workers in office, and there was no agreement between the labor and management in relation thereto. At the time, there is no agreement between the Plaintiffs and the employees in office including the Plaintiffs, and there was no agreement between the labor and management in relation thereto. In light of the situation that the employees in office, including the Plaintiffs, did not join the labor union, there is no labor-management agreement excluding the performance annual salary from ordinary

Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the record, the lower court did not err by misapprehending the legal doctrine on the good faith principle.

3. Conclusion

The Defendant’s appeal is dismissed in entirety as it is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

[Attachment] The List of Plaintiffs: omitted

Justices Noh Jeong-hee (Presiding Justice)