[1] The method of determining whether the paid wage falls short of the minimum wage under the Minimum Wage Act

[2] The case holding that the continuous service allowances paid after deducting an amount calculated on a monthly basis as much as the number of absence days is included in the wages for the application of the minimum wage

[3] Whether the weekly holiday allowances, which are wages for paid holidays paid at the weekly wage system or monthly wage system, are included in the wages for the purpose of applying the minimum wage (affirmative), and the meaning of the “number of contractual working hours per week or month” under Article 5(1)2 and 3 of the Enforcement Decree of the Minimum Wage Act

[4] The validity of the wage agreement in case where the worker and the employer have agreed to preserve the portion below the minimum wage by including the wages not included in the wage for the application of the minimum wage in the scope of the wage for the application of the minimum wage (negative)

[1] Whether the paid wage falls short of the minimum wage under the Minimum Wage Act shall be determined by comparing the paid wage with the minimum wage amount, excluding the wage or allowance, as prescribed in Article 6(4) of the Minimum Wage Act and Article 2 [Attachment 1] of the Enforcement Rule of the same Act.

[2] The case holding that the above continuous service allowance is included in the wages for the application of the minimum wage on the ground that the amount uniformly determined according to the continuous service period is paid on a monthly basis, and the amount calculated by deducting the amount calculated on a daily basis as the number of absence days is paid on a regular basis at least once a month for the prescribed working hours or working days, and it does not constitute wages or allowances under Article 6 (4) of the Minimum Wage Act and Article 2 [Attachment 1] of the Enforcement Rule of the same Act

[3] Article 5 (1) 2 and 3 of the Enforcement Decree of the Minimum Wage Act provides that the wage paid on a weekly or monthly basis shall be calculated by dividing the amount by “the number of contractual working hours per week or month” with respect to the wage paid on a weekly or monthly basis. The weekly paid holiday allowance, which is the wage for paid holidays paid on a weekly or monthly basis, is paid on a regular basis at least once a month, and it cannot be deemed as “wages or allowances that are not included in the wage for the handicapped” under Article 6 (4) of the Minimum Wage Act and Article 2 [Attachment Table 1] of the Enforcement Rule of the same Act, so the weekly paid holiday allowance shall be added in calculating the minimum wage. In addition, in calculating the wage for the application of the minimum wage, there is no need to consider the weekly paid hours related to the weekly paid hours in addition to the weekly paid hours, so this refers to the working hours as prescribed in Article 20 of the Labor Standards Act, and it cannot be calculated under Article 6 (2) 3 or 4 of the Enforcement Decree of the Labor Standards Act.

[4] In a case where the worker and the employer have agreed to preserve the portion of wages not included in the wages for the purpose of applying the minimum wage, which is below the minimum wage, such agreement shall be null and void against Article 6(3) of the Minimum Wage Act.

[1] Articles 4, 5, and 6 of the Minimum Wage Act, Article 2 [Attachment Table 1] of the Enforcement Rule of the Minimum Wage Act / [2] Article 6(4) of the Minimum Wage Act, Article 2 [Attachment Table 1] of the Enforcement Rule of the Minimum Wage Act / [3] Articles 5-2 and 6(4) of the Minimum Wage Act, Article 5(1)2 and 3 of the Enforcement Rule of the Minimum Wage Act, Article 2 [Attachment Table 1] of the Enforcement Rule of the Minimum Wage Act, Article 20 of the Labor Standards Act, Article 20 of the Labor Standards Act, Article 6(2)3 and 4 of the Enforcement Rule of the Labor Standards Act / [4] Article

Plaintiff 1 and 10 others

Defendant (Attorney Kim Young-chul, Counsel for defendant-appellant)

Seoul Northern District Court Decision 2006Na34 decided September 6, 2006

The judgment below is reversed, and the case is remanded to Seoul Northern District Court Panel Division.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 6(1) of the Minimum Wage Act provides that “an employer shall pay the worker subject to the minimum wage at least the minimum wage amount” under Article 6(1) of the same Act, and Article 6(4) of the same Act provides that “wages, other than those that are regularly paid once or more a month, as determined by the Minister of Labor (Article 6(4)),” “wages, other than those that are paid for the working hours or prescribed working days, as determined by the Minister of Labor (Article 6(2)),” and “other amount determined by the Minister of Labor as inappropriate to be included in the minimum wage amount” (Article 6(4) [Attachment 1] of the Minimum Wage Act provides that the scope of wages that are not included in the “wages for the application of the minimum wage” (Article 6(4) and Article 2 [Attachment 1] of the Enforcement Rule of the Minimum Wage Act shall be determined in comparison with the amount of wages paid.

However, according to the facts acknowledged by the judgment of the court of first instance as cited by the court below, the plaintiffs have received the amount uniformly determined according to the continuous service period every month as remuneration for continuous service, but at the time of absence, the plaintiffs have received the amount calculated by deducting the amount calculated as the number of absence days.

Therefore, the above continuous service allowance is a regular payment of the prescribed working hours or working days at least once a month, and it is not a wage of a nature for the purpose of supporting the livelihood or welfare of workers. Thus, it shall be deemed that it does not fall under any of the “wages or allowances not included in the wages subject to education” as prescribed in Article 6(4) of the Minimum Wage Act and [Attachment 1] of the Enforcement Rule of the same Act.

Nevertheless, the lower court determined that the instant continuous work allowance does not constitute a “non-school wage” that is to be compared with the ordinary wage under the Labor Standards Act, since the amount of the paid holiday allowance is different and fixed depending on the actual number of working days of the worker, and thus, it does not constitute an “non-school wage” that is to be compared with the minimum wage. In so determining, the lower court erred by misapprehending the scope of “non-school wage” under the Minimum Wage Act, thereby affecting the conclusion of the judgment (Article 5(1)2 and 3 of the Enforcement Decree of the Minimum Wage Act provides that the amount calculated by dividing the amount paid on a weekly or monthly basis by the “number of contractual work hours” with respect to the wages paid on a weekly basis or monthly basis, the so-called “non-school allowance” that is paid on a paid holiday under the weekly or monthly salary system, shall not be deemed a “non-school wage” that is not necessary to be calculated on a monthly basis or on a weekly basis, and thus, it shall not be deemed that the monthly paid holiday allowance and allowance are not necessary to be calculated on a weekly wage.

2. Regarding ground of appeal No. 2

Article 6(3) of the Minimum Wage Act provides that “Any labor contract that provides for wages below the minimum wage amount between the workers and the employer subject to the application of the minimum wage shall be null and void only in that part, and the invalidated part shall be deemed to be determined to pay the same wage as the minimum wage amount as the minimum wage amount prescribed by this Act.” As seen earlier, Article 6(4) of the same Act and Article 2 of the Enforcement Rule of the same Act provide that “wages or allowances that are not included in the wages subject to the ordinary wage” shall be construed as “wages or allowances that are not included in the wages subject to the ordinary wage”. As such, even if there was an agreement between the workers and the employer to preserve the portion below the minimum wage amount by including the “wages not included

citing the reasoning of the judgment of the court of first instance, rejecting the defendant's assertion that there was an agreement between the plaintiffs and the defendant to preserve the part below the minimum wage by paying training allowances (the part exceeding 40,000 won per month) that cannot be included in the comparative wage, is somewhat insufficient, but there is no error of law that affected the conclusion of the judgment.

3. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)