[1] The validity of such agreement where an employer agreed with the taxi driver trade union to reduce only contractual work hours without changing the actual work environment or work hours in order to increase the external shape of the fixed hourly wage calculated on the basis of contractual work hours with the intent to avoid the amount of fixed wage, excluding the wage calculated on the basis of the output under the fixed taxi commission scheme / Whether such agreement equally applies to cases where the employer amends the rules of employment to reduce contractual work hours with the consent of the trade union organized by a majority of taxi drivers or a majority of the workers (affirmative)

[2] In a case where there is a ground for dispute as to the existence of the obligation to pay the difference of wages which falls short of the minimum wage amount, whether an employer may be found to have the intent to commit a crime under Articles 6(1) and 28 of the former Minimum Wage Act (negative); and the standard for determining whether there is a ground for dispute as to the existence and scope of the obligation to pay the difference of wages which falls short of the minimum wage amount / Whether the employer is deemed to have paid wages which are less than the minimum wage amount ex post facto, calculated based on the previous contractual work hours on the ground that the provision on contractual work hours under a collective agreement or rules of employment that reduces contractual work hours becomes invalid under the evasion of the law and thus, it can be readily determined

[1] Comprehensively taking into account the contents and structure of the provisions related to the Constitution and the Minimum Wage Act, the legislative intent and legislative process of Article 6(5) of the Minimum Wage Act (hereinafter “Special Provisions”), the purport of the Passenger Transport Service Act, the public nature of the taxi transport business, and the circumstances before and after the agreement on the reduction of contractual work hours, etc., in a case where the employer agreed with the taxi driver trade union to reduce only contractual work hours without changing the actual work environment or work hours in order to increase the external shape of the fixed wage per hour calculated on the basis of contractual work hours under the fixed taxi commission scheme with the intent to avoid the amount of fixed wage other than the wage calculated on the basis of the fixed taxi commission scheme, the agreement shall be deemed null and void as an evasion of the law to avoid the application of the Special Provision, etc. under the Minimum Wage Act, which is a mandatory provision. This legal doctrine likewise applies to cases where the employer amends the rules

[2] If there is a ground for dispute as to the existence of the obligation to pay the difference of wages short of the minimum wage amount, it shall be deemed that there exists a reasonable ground for the employer to refuse to pay such wage. As such, it is difficult to find that the employer had intent to commit a crime of violation of Articles 6(1) and 28 of the former Minimum Wage Act (amended by Act No. 11278, Feb. 1, 2012; hereinafter the same). Whether there is a ground for dispute as to the existence and scope of the obligation to pay the difference of wages short of the minimum wage amount should be determined by comprehensively taking into account the grounds for the obligation to pay the wage, the reasons for the employer’s failure to pay the wage, the business purpose and scale of the company run by the employer, and other various circumstances at the time of dispute over the existence and scope of the obligation to pay wage. Since the provision on contractual work hours under the collective agreement or rules of employment reducing contractual work hours is deemed to have been null and void as a result of calculating the existing contractual work hours, it should not be readily concluded that the employer had

[1] Article 32(1) of the Constitution of the Republic of Korea; Article 6(1), (3), and (5) of the Minimum Wage Act / [2] Articles 6(1) and 28 (see current Article 28(1)) of the former Minimum Wage Act (Amended by Act No. 11278, Feb. 1, 2012)

[1] Supreme Court en banc Decision 2016Da2451 Decided April 18, 2019 (Gong2019Sang, 1074) / [2] Supreme Court Decision 2010Do14693 Decided October 27, 201 (Gong2011Ha, 2500)

Defendant

Defendant

Law Firm LLC, Attorneys Kim Jong-ho et al., Counsel for the defendant-appellant

Suwon District Court Decision 2014No369 decided December 5, 2014

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

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

1. Summary of the facts charged

The Defendant, as the representative member of Nonindicted Partnership 1 (hereinafter “instant company”), is an employer who runs taxi transport business by employing 76 full-time workers as the representative member of Nonindicted Partnership 1 (hereinafter “instant company”). As indicated in the attached Table of the lower judgment, the Defendant paid a total of KRW 49,136,961 to Nonindicted 2 and 22 taxi drivers of the instant company below the minimum wage, thereby not paying wages above the minimum wage amount to workers subject to the Minimum Wage

2. The judgment of the court below

The lower court reversed the first instance judgment that acquitted the aforementioned facts charged and convicted the Defendant on the following grounds.

A. Upon amendment of the Minimum Wage Act, Article 6(5) excluded “wages calculated on the basis of output” from the scope of wages included in the minimum wage of drivers in the taxi transport business (hereinafter “Special Provision”), the instant company revised the rules of employment on two occasions to reduce the previous contractual work hours (hereinafter the amended rules of employment referred to as “Rules of Employment I” and “Rules of Employment II”; and the rules of employment prior to the amendment referred to as “Rules of Employment”).

B. This does not actually increase the percentage of fixed wage so that it does not fall short of the minimum wage in line with the purport of the Amendment of the Minimum Wage Act. However, the ratio of fixed wage is almost as it is, and it is merely a measure to ensure that the payment of minimum wage is made only formally and externally only by prescribing working hours which are considerably shorter than actual working hours as working conditions.

C. Although the consent of taxi drivers was obtained, the rules of employment amended to reduce contractual work hours as above is aimed at avoiding the Minimum Wage Act, which is a mandatory provision, and thus, is null and void in violation of the Minimum Wage Act.

3. Judgment of the Supreme Court

A. Comprehensively taking into account the details and structure of the provisions related to the Constitution and the Minimum Wage Act, the legislative purport and legislative process of the Special Provision, the purport of the provisions of the Passenger Transport Service Act, the public nature of taxi transport business, and the agreement before and after the reduction of contractual work hours, where an employer agreed to reduce only contractual work hours without changing the actual work environment or work hours in order to increase the amount of fixed hourly wages calculated on the basis of contractual work hours under the fixed taxi commission scheme with the taxi driver trade union, with the intent of evading fixed wage excluding wages calculated on the basis of output under the fixed taxi commission scheme from below the minimum wage, such agreement shall be deemed null and void as an evasion of the law to avoid the application of the Special Provision, etc. under the Minimum Wage Act, which is a mandatory law. Such legal doctrine likewise applies to cases where the employer amends the rules of employment with the consent of the trade union or the majority of the employees organized by a majority of taxi drivers (see Supreme Court en banc Decision 2016Da2451,

Meanwhile, if there is a ground for dispute as to the existence of the obligation to pay the difference of wages short of the minimum wage amount, it shall be deemed that there exists a reasonable ground for the employer to not pay the relevant wage. As such, it is difficult to recognize that the employer had intentional intent to commit the crime of violating Articles 6(1) and 28 of the former Minimum Wage Act (amended by Act No. 11278, Feb. 1, 2012; hereinafter “former Minimum Wage Act”). Whether there is a ground for dispute as to the existence and scope of the obligation to pay the difference of wages short of the minimum wage amount should be determined by comprehensively taking into account the grounds for the obligation to pay the wage, the reason for the employer’s failure to pay, the business purpose and scale of the company run by the employer, as well as other various circumstances at the time a dispute over the existence and scope of the obligation to pay the wage. Since the provision on contractual work hours under the collective agreement or rules of employment reducing contractual work hours becomes invalid on the grounds of the evasion of the law, it should not be readily concluded that the employer had an intent to commit a violation of Articles 28(13.

B. As to the validity of the provision on contractual work hours under the revised rules of employment

Examining the record in accordance with the aforementioned legal principles, the lower court’s determination that the provision on contractual work hours under the Rules of Employment I and II was invalid as it constitutes an evasion of the law is justifiable.

C. As to the defendant's intentional recognition

(1) Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following circumstances.

(A) If maintaining the existing contractual work hours despite the enactment of the Special Provision, as the amount of fixed wage to be paid to taxi drivers increases rapidly, the taxi transport business entity would have increased the incentive to increase the taxi commission, which serves as a major source of the fixed wage, as the amount of the fixed wage to be paid to taxi drivers. On the other hand, from the standpoint of taxi drivers under the fixed taxi commission scheme, even if the fixed wage is increased to a certain extent, the increase in the taxi commission would lead to a decrease in excess taxi earnings, and the gross income would not always increase. In line with both interests surrounding the issue of whether to increase the taxi commission, a taxi transport business entity would not increase the taxi commission, thereby overcoming the issue of violating the Minimum Wage Act without the increase in taxi commission, and seek ways to maintain the excess taxi earnings at the previous level while causing damage to taxi drivers. As a result, the labor-management agreement was established to reduce contractual work

The instant company operated with the fixed taxi commission scheme has amended the rules of employment in sequence to reduce contractual work hours with the voluntary consent of the majority of its taxi drivers.

(B) Despite the reduction of contractual work hours, the fixed wage of taxi drivers, which can be seen through the second employment rules and the labor contract related thereto, was somewhat increased compared with the previous employment rules at the time of the employment rules. Compared with the previous employment rules at the time of the employment rules and the date of the second employment rules, the gross income of taxi drivers seems not to have been specially reduced.

(C) As stated in the facts charged in this case, the Defendant’s obligation to pay the difference of wages below the minimum wage amount becomes null and void, and thus, the provision on contractual work hours under the previous rules of employment is still valid in the labor relationship. However, with respect to the validity of the provision on the reduction of contractual work hours with the consent of taxi drivers upon the enactment of the Special Provision, the Ministry of Employment and Labor’s explicit guidelines or court’s ruling did not exist.

(D) In the case of calculation based on contractual work hours under the rules of employment reduced successively, there is no evidence to deem that the Defendant paid wages below the minimum wage amount calculated accordingly.

(2) Examining these circumstances in light of the legal principles as seen earlier, the Defendant appears to have believed at the time that the provision on contractual work hours under the Rules of Employment I and II, which reduced contractual work hours with the consent of a large number of taxi drivers, was valid, and thus, the Defendant was not obliged to pay the difference of wages below the minimum wage amount. Thus, it can be deemed that there is a ground to dispute whether the Defendant is obligated to pay the difference of wages below the minimum wage amount, and that there is a reasonable ground to deem that the Defendant paid the taxi drivers wages below the minimum wage amount. Therefore, it cannot be readily concluded that the Defendant had the intent to commit a crime under Articles 6(1) and

(3) Nevertheless, the lower court found the Defendant guilty of the instant facts charged on the premise that the Defendant had the intent to commit the instant crime. In so determining, the lower court erred by misapprehending the legal doctrine regarding the intent to commit a crime under Articles 6(1) and 28 of the former Minimum Wage Act, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules

4. 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 Min You-sook (Presiding Justice)