[1] Whether the duty of fair representation under Article 29-4(1) of the Trade Union and Labor Relations Adjustment Act ought to be observed in the course of collective bargaining (affirmative)

[2] Whether a representative bargaining trade union’s provisional agreement agreement prepared in the course of collective bargaining with an employer can be readily concluded as a violation of the duty of fair representation solely on the ground that it did not give an opportunity to participate in the procedures for the simplification of bargaining windows by going through the pro-con voting procedures of the general assembly or the board of representatives substituted by the general assembly or the general assembly, or that it did not decide whether to pass a resolution in consideration of

[3] Where a representative bargaining trade union discriminates against another trade union participating in the procedures for simplification of bargaining windows without reasonable grounds in violation of the duty of procedural fair representation (affirmative in principle)

[4] The case holding that Gap trade union is liable for compensation for damages on the ground that Gap trade union violated Eul's duty of fair representation, since Gap union's notification of the preparation of provisional agreement to Eul's union and its explanation to Eul's union's representative or its member did not take part in the provisional meeting, in case where Gap union's collective bargaining with Eul company as a representative bargaining trade union is conducted and a provisional agreement was prepared, and the provisional agreement was passed, and Eul's union is held as a substitute for the general meeting of union members, which is another trade union participating in the procedures for simplification of bargaining windows was notified of the preparation of provisional agreement or did not gather opinions therefrom, and Gap union did not take part in Eul's representative or union member's participation in the provisional meeting

[1] A trade union which is not a representative bargaining trade union under the system of simplification of bargaining windows is unable to independently exercise its right to collective bargaining. As such, the Trade Union and Labor Relations Adjustment Act (hereinafter “Trade Union Act”) imposes an obligation of fair representation on an employer and a representative bargaining trade union to protect a trade union which has not become a representative bargaining trade union without reasonable grounds so that it does not discriminate against any trade union participating in procedures for simplification of bargaining windows or its members (Article 29-4(1)). The obligation of fair representation functions as an institutional device to ensure that fundamental contents of the right to collective bargaining guaranteed by the Constitution are not infringed, and it is reasonable to justify the effect of a collective agreement concluded by a representative bargaining trade union and an employer on another trade union which has participated in procedures for simplification of bargaining windows (hereinafter “small-scale trade union”). In light of the purport and function of such duty of fair representation, etc., it is reasonable to deem that the duty of fair representation is not only an outcome of collective bargaining, but also an obligation of collective bargaining in the process of collective bargaining and collective bargaining without reasonable grounds.

[2] Even if a representative bargaining trade union did not give the members of other trade unions participating in the procedures for simplification of bargaining windows (hereinafter “small-scale trade union”) an opportunity to participate equally in the procedures, or did not decide whether to pass a provisional agreement by taking into account their pros and cons, it cannot be readily concluded that such circumstance alone constitutes a violation of the procedural duty of fair representation of the representative bargaining trade union. In such a case, barring any special circumstance, it is difficult for the representative bargaining trade union to regard it as a discrimination against small-scale trade union, barring any special circumstance.

① Considering the purport or purpose of the simplification system of bargaining windows and the content and purport of Article 29(2) of the Trade Union and Labor Relations Adjustment Act (hereinafter “Trade Union Act”), the representative of a representative bargaining trade union has an independent right to conclude a collective agreement on behalf of the trade union participating in the procedures for simplification of bargaining windows and all members thereof, in principle, it cannot be deemed that the conclusion of a collective agreement is bound by the intent of a minority trade union or its members.

(2) Even though the rules of a representative bargaining trade union stipulate that the vote for and against union members on a provisional agreement shall take place, they shall only be internal procedures prepared for decision-making by the union members of the relevant representative bargaining trade union, not legal procedures required.

③ Article 29-2 of the Trade Union Act provides for the procedures for the simplification of bargaining windows, and Article 14-7 of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act based on delegation provides for the detailed provisions on the standards for the calculation of the number of union members necessary for the establishment of a representative bargaining trade union. The latter part of Article 41(1) of the Trade Union Act provides that an industrial action may be conducted only when the whole union members of the trade union participating in the procedures for the simplification of bargaining windows have participated in the procedures for the simplification of bargaining windows. On the other hand, in cases where the regulations on the procedures for the simplification of bargaining windows are different by trade union participating in the procedures for the simplification of bargaining windows, there is no provision on the procedures for the simplification of bargaining windows and its Enforcement Decree.

[3] If a representative bargaining trade union discriminates against another trade union participating in the procedures for simplification of bargaining windows (hereinafter “small-scale trade union”), in principle, such act constitutes a tort that infringes on the procedural rights of a small-scale trade union related to collective bargaining in accordance with the procedures for simplification of bargaining windows. Even if the property damage of a small-scale trade union is not recognized, the representative bargaining trade union shall be liable for consolation money for non-property damage, barring special circumstances.

[4] In a case where Gap trade union was conducting collective bargaining with the company as a representative bargaining trade union, and a provisional agreement was prepared, a provisional council meeting substituted for the union members' general meeting was held and resolved. During that process, Eul, another trade union participating in the procedures for simplification of bargaining windows, notified the preparation of provisional agreement or did not gather opinions therefrom, and did not participate in the representatives or union members of Eul, the case held that the court below erred by misapprehending the legal principles as to Gap's duty of fair and fair representation, on the ground that Gap's violation of the duty of fair and fair representation based on the premise that Gap's existence of discrimination was not occurred, on the ground that Gap's union violated Gap's duty of fair and fair representation by making a resolution of an interim council on the provisional agreement to determine whether to conclude a collective agreement was made, and Gap's union did not inform its representatives of the provisional agreement and explain the preparation of the provisional agreement or gather opinions thereon, and it did not err by misapprehending the legal principles as to Gap's duty of fair and fair representation without any justifiable reason.

[1] Article 29-4 (1) of the Trade Union and Labor Relations Adjustment Act / [2] Articles 29 (2), 29-2, 29-4 (1), and 41 (1) of the Trade Union and Labor Relations Adjustment Act, Article 14-7 of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act / [3] Article 29-4 (1) of the Trade Union and Labor Relations Adjustment Act, Articles 750 and 751 of the Civil Act / [4] Articles 29 (2), 29-2, 29-4 (1), and 41 (1) of the Trade Union and Labor Relations Adjustment Act, Article 14-7 of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act, Articles 750 and 751 of the Civil Act

[1] Supreme Court Decision 2017Da218642 Decided August 30, 2018 (Gong2018Ha, 1914)

Sejong Hotel Trade Union and two others (Law Firm Inn, Attorneys taxation and others, Counsel for the plaintiff-appellant)

Sejong Investment Development Co., Ltd and one other (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Seoul Central District Court Decision 2018Na69877 Decided July 18, 2019

The part of the lower judgment against Plaintiff Sejong Hotel Trade Union is reversed, and that part of the case is remanded to the Seoul Central District Court. All appeals by Plaintiffs 2 and 3 are dismissed. The costs of appeal by Plaintiffs 2 and 3 are assessed against the said Plaintiffs.

The grounds of appeal are examined.

1. As to the grounds of appeal by Plaintiffs 2 and 3

A. On the grounds indicated in its reasoning, the lower court rejected Plaintiff 2 and Plaintiff 3’s assertion on the following grounds: (a) there is no defect in the consent to revise the instant annual salary system, which is the rules of employment, to be applied even to employees of Grade IV or higher; and (b) Defendant Sejong Investment Development Co., Ltd. (hereinafter “Defendant Co., Ltd”) prepared by the employer pursuant to the instant annual salary system as above by the Defendant Sejong Investment Development Co., Ltd. (hereinafter “Defendant Co., Ltd.”) pursuant to the instant annual salary system as amended, cannot be deemed as the rules of employment necessary for the separate consent of the majority trade union.

B. Examining the reasoning of the lower judgment in light of the relevant legal doctrine and the record, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the nature of the rules of employment and the amendment procedures.

2. As to the ground of appeal by the Plaintiff Sejong Hotel Trade Union

A. Scope of recognition of procedural representation duty and establishment of tort liability

1) A trade union which is not a representative bargaining trade union under the system of simplification of bargaining windows is unable to independently exercise its right to collective bargaining. As such, the Trade Union and Labor Relations Adjustment Act (hereinafter “Trade Union Act”) imposes an obligation of fair representation on an employer and a representative bargaining trade union not to discriminate against any trade union which has participated in procedures for simplification of bargaining windows or its members without reasonable grounds (Article 29-4(1)). The obligation of fair representation functions as an institutional device to ensure that fundamental contents of the right to collective bargaining guaranteed by the Constitution are not infringed, and it is reasonable to justify the effect of a collective agreement concluded between a representative bargaining trade union and an employer on other trade unions which have participated in procedures for simplification of bargaining windows (hereinafter “small-scale trade union”). In light of the purport and function of such duty of fair representation, it is reasonable to deem that the duty of fair representation is not only an outcome of collective bargaining, but also an obligation of collective bargaining in the process of providing information on small-scale collective bargaining and information on the whole process of collective bargaining without reasonable grounds to the extent that it is not reasonable and reasonable in the collective bargaining trade union.

2) On the other hand, even though a representative bargaining trade union did not give the union members an opportunity to participate equally in the procedures, or did not decide whether to pass a provisional agreement by taking into account their pros and cons and cons, it cannot be readily concluded that such circumstance alone constitutes a violation of the procedural duty of fair representation of a representative bargaining trade union, even if it is difficult for a representative bargaining trade union to view that a representative bargaining trade union discriminates against a small number of trade unions, barring any special circumstance, in such a case, barring special circumstances.

(A) Considering the purport or purpose of the system of simplification of bargaining windows and the contents and purport of Article 29(2) of the Trade Union Act, the representative of a representative bargaining trade union has an independent right to conclude a collective agreement on behalf of the trade union participating in the procedures for simplification of bargaining windows and all members of the trade union participating in the procedures for simplification of bargaining windows, in principle, cannot be deemed binding on the intent of a minority trade union

(B) Even though the rules of a representative bargaining trade union stipulate that a union member's vote on a provisional agreement shall take place, it is only an internal procedure prepared for the decision-making of the union members of the representative bargaining trade union in question, not a procedure required by law.

(C) Article 29-2 of the Trade Union Act provides for the simplification of bargaining windows, and Article 14-7 of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act provides for detailed provisions on the criteria for calculating the number of union members required for the determination of the representative bargaining trade union upon delegation. The latter part of Article 41(1) of the Trade Union Act provides that an industrial action may be conducted only when the whole union members of the trade union participating in the procedures for the simplification of bargaining windows have participated in the procedures for the simplification of bargaining windows. On the other hand, in cases where the statutory provisions on the procedures for the simplification of bargaining windows are different for each trade union participating in the procedures for the simplification of bargaining windows, there is no provision on the procedures for the simplification of bargaining windows and its Enforcement Decree.

3) If a representative bargaining trade union discriminates against a small number of trade unions without reasonable grounds in violation of the procedural duty of fair representation, such act constitutes, in principle, a tort that infringes on the procedural rights of the small number of trade unions related to collective bargaining in accordance with the procedures for the simplification of bargaining windows, and even if the property damage of the small number of trade unions is not recognized, the representative bargaining trade union shall be held liable for consolation

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

1) On June 12, 2014, the Defendant trade union, as a representative bargaining trade union, delivered the requirements of the Defendant trade union and the Defendant company to the Plaintiff-type hotel trade union, which is a small number of trade unions, on the course of conducting collective bargaining for wages and collective agreements between the Defendant company as a representative bargaining trade union, and announced the demand of the Defendant trade union and the Defendant company on the intra-company bulletin board. In addition, the details

2) On July 10, 2014, the Plaintiff Sejong Hotel Trade Union presented to the Defendant Trade Union a proposal that includes the abolition of the annual salary system itself and the conversion of the salary system into the salary system for all employees.

3) When the Defendant trade union established a provisional agreement on collective bargaining including the content that it shall apply the annual salary system to class 4 employees from January 1, 2015, the Defendant trade union held a temporary board of representatives replacing the general meeting of union members and passed a provisional agreement on August 27, 2014. However, the Defendant trade union did not notify the Plaintiff Sejong Hotel trade union of the preparation of the provisional agreement or explain it and gather opinions thereon, and did not allow its temporary board of representatives to participate in the Plaintiff Sejong Hotel trade union’s representative or union members.

4) On August 28, 2014, the Defendant Trade Union: (a) signed an agreement between the Defendant Company to enter into a wage and collective agreement in 2014 as stipulated in the interim agreement; and (b) announced the content of the agreement on August 29, 2014 through a public notice notice of the intra-company bulletin board.

(c) Violation of duties of fair representation and recognition of liability for damages concerning provision of information and gathering of opinions;

1) We examine these facts in light of the legal principles as seen earlier. Even if the Defendant trade union provided part of the information and gathered opinions related to collective bargaining with the Plaintiff’s Sejong Hotel Trade Union prior to the preparation of the provisional agreement, it merely notified the Plaintiff’s representatives of the provisional agreement, which is an important matter in the course of collective bargaining, and did not go through a resolution of the board of representatives, and did not go through a procedure for informing the Plaintiff’s Sejong Hotel Trade Union of the preparation of the provisional agreement or providing its explanation and gathering opinions thereon, the Defendant trade union’s failure to comply with the procedural representative duty by discriminating the Plaintiff Sejong Hotel Trade Union, which is a small number of trade unions, by deviating from the scope of discretion of the representative bargaining trade union when comprehensively and comprehensively seen from the entire process of collective bargaining without reasonable grounds, and the Defendant trade union’s intentional act or negligence on such violation is also recognized. Furthermore, the Defendant trade union is liable to compensate for damages arising therefrom.

2) Nevertheless, the lower court rejected the claim for damages against the Defendant Trade Union of Plaintiff Sejong Hotel Trade Union for reasons indicated in its reasoning, such as that it is difficult to readily conclude that the Defendant Trade Union violated the duty of fair representation and infringed on the right to collective bargaining by Plaintiff Sejong Hotel Trade Union. In so determining, the lower court erred by misapprehending the legal doctrine on the duty of fair representation, contrary to what is alleged in the grounds of appeal, thereby adversely affecting the conclusion

(d) Whether an interim agreement violates the duty of fair representation related to the resolution procedure of the board of representatives on the interim agreement

1) Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, even if the defendant trade union, a representative bargaining trade union, did not equally give the representatives or members of the plaintiff Sejong Hotel trade union with an opportunity to participate in the relevant procedures by a resolution of the board of representatives instead of its members’ general meetings on interim agreements in order to determine whether to conclude a collective agreement, the issue of discrimination does not occur, and thus, it is difficult to recognize the violation of the procedural duties of fair representation premised on the existence of discrimination.

2) Although some of the reasoning of the judgment below is insufficient, the decision of the court below which rejected the claim for damages by denying the procedural fairness representation obligation of the defendant trade union with respect to the resolution of the board of representatives on a provisional agreement, is just in conclusion, and contrary to what is alleged in the grounds of appeal, it did not err by misapprehending the legal principles on the fair representation obligation, thereby affecting the conclusion of the judgment.

3. Conclusion

Therefore, the part of the judgment of the court below against Plaintiff Sejong Hotel Trade Union is reversed, and that part of the case is remanded to the court below for a new trial and determination. All appeals by Plaintiffs 2 and 3 are dismissed, and the costs of appeal by Plaintiffs 2 and 3 are assessed against the above plaintiffs. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Noh Tae-tae (Presiding Justice)