Whether “total construction cost” under Article 3(1)3 of the former Enforcement Decree of the Industrial Accident Compensation Insurance Act, which provides for projects exempt from application of the Industrial Accident Compensation Insurance Act, includes value-added tax (negative)

Since it is reasonable to view that “total construction cost” under Article 2(1)2 of the Enforcement Decree of the Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance does not include value-added tax, the “total construction cost” does not include value-added tax even “total construction cost” under Article 3(1)3 of the former Enforcement Decree of the Industrial Accident Compensation Insurance Act, which prescribes the business excluded from

Article 2(1)2 of the Enforcement Decree of the Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance, Article 5(see current Article 6) of the former Industrial Accident Compensation Insurance Act (Amended by Act No. 7796, Dec. 29, 2005); Article 3(1)3(a) [see current Article 2(1)3(a) of the former Enforcement Decree of the Industrial Accident Compensation Insurance Act (Amended by Presidential Decree No. 19513, Jun. 12, 2006)]

Plaintiff (Law Firm International, Attorneys Jeon Soo-soo et al., Counsel for plaintiff-appellant)

Korea Labor Welfare Corporation

Busan High Court Decision 2008Nu2811 Decided December 5, 2008

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

Article 5 of the former Industrial Accident Compensation Insurance Act (amended by Act No. 7796 of Dec. 29, 2005; hereinafter “former Industrial Accident Insurance Act”) and Article 3(1)3 of the Enforcement Decree of the same Act stipulate that the total construction cost under Article 2(1)2 of the Enforcement Decree of the Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance (hereinafter “Insurance Act”) is less than 20,000 won as one of the projects excluded from the application of the Industrial Accident Compensation Insurance Act. The instant provision does not expressly state whether the total construction cost is calculated in accordance with the method determined and publicly notified by the Minister of Labor among construction works for which a building contractor is not restricted under Article 41 of the Framework Act on the Construction Industry.

However, according to Article 6 of the Regulations on the Calculation of Total Wage Amount of Construction Works executed by a person other than a constructor, the total construction cost shall be calculated by multiplying the standard construction cost by the area of construction permit. In light of the standards for establishing the budget by the Ministry of Labor, the standard construction cost referred to in the above public announcement refers to the cost of construction not including value-added tax. In addition, according to the provisions of Article 22(5) of the Framework Act on the Construction Industry, Article 26-2 of the Enforcement Decree of the same Act and the standards for applying the social insurance (so-called four-party insurance), public notice by the Minister of Land, Transport and Maritime Affairs (former Minister of Construction and Transportation) pursuant to the above provisions, the contract party to the construction work shall specify the total industrial accident insurance premium to be borne by the constructor in accordance with the above public notice standards, but the total construction cost of construction works to be executed by a person other than a constructor is excluded from the total construction cost subject to the above public notice standards, and if so, the total construction cost shall be calculated by adding the market price of the materials supplied to the contract.

In the same purport, the court below is just in holding that the construction work executed by the non-party, who is not a constructor under the Framework Act on the Construction Industry, is 20 million won including value-added tax, and thus constitutes an exception business under the Industrial Accident Insurance Act, and there is no violation of law by misapprehending the legal principles as to total construction cost under Article 3 (1) 3 of the Enforcement Decree of the Industrial Accident Insurance Act, as otherwise

Therefore, the appeal is dismissed, 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.

Justices Kim Nung-hwan (Presiding Justice)