[1] In a case where the collective agreement or the rules of employment provides that regular bonuses shall be paid only to workers employed at a specific point, and the provision that regular bonuses shall be paid in proportion to the period of service, the standard for determining whether a regular bonus shall be paid in proportion to the period of service, even if retirement is made before a specific point of time

[2] In a collective agreement entered into with a trade union, “A” corporation determined that “a bonus of 1,200% (1,200% of the aggregate of the class allowances for the 30th day of basic wage) shall be paid in 100% on the monthly wage payment day,” and in relation to regular bonuses under the rules of employment, “an bonus shall be paid only to a person who served as of 20 days, and where the number of working days falls short of the number of working days,” the case holding that the court below erred by misapprehending the legal principles in holding that the above regular bonus lacks fixedness, even though it cannot be readily concluded that even if a person provided labor at 20 days on the first day of each month, he did not pay a regular bonus at all.

[1] Article 2 (1) 5 of the Labor Standards Act, Article 6 (1) of the Enforcement Decree of the Labor Standards Act / [2] Article 2 (1) 5 of the Labor Standards Act, Article 6 (1) of the Enforcement Decree of the Labor Standards Act

Plaintiff 1 and one other (Attorney Kim Young-deok, Counsel for the plaintiff-appellant)

Korean Astro-ROMs Co., Ltd. (formerly: Korean Astro-ROMs Co., Ltd.) (LLC, Attorneys Kang Jong-young, Kim Yong-sik, Counsel for the plaintiff-appellant)

Daegu High Court Decision 2015Na23667 decided November 21, 2018

The judgment below is reversed, and the case is remanded to the Daegu High Court.

The grounds of appeal are examined.

1. In a case where a worker retires before the due date of a regular bonus which is paid regularly and continuously in accordance with a collective agreement, etc., barring any special provision regarding the payment terms, he/she may claim as compensation for work the amount of regular bonus proportional to the period in which the worker has already worked. Considering the nature as a wage of such regular bonus, in a case where a collective agreement, employment rules, etc. provides that regular bonus shall be paid only to the worker in service at a specific time, and where the former provision provides that regular bonus shall be paid in proportion to the period of service, it shall not be concluded that a person who has provided his/her labor at a certain time does not pay a regular bonus at all, even if he/she has provided his/her labor at a certain time. In such a case, it shall be carefully examined whether a regular bonus should be paid in proportion to the period in which he/she has already worked in accordance with the latter provision, rather than determining whether a regular bonus should be paid in proportion to the period in which he/she has already worked at a specific time.

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

A. The collective agreement that the Defendant entered into with the labor union to which the Plaintiffs belong provides 1,200% bonus of the sum of class allowances for 30 days of basic pay (hereinafter “instant regular bonus”) and the said bonus shall be paid at 10% of the monthly wage payment day (Article 45).

B. In relation to the instant regular bonus, Article 98 of the Rules of Employment of the Defendant provides, “The Company shall pay a bonus of 1,200% per annum in installments (Paragraph 1). Payment rate shall be 1,200% of the amount calculated by adding the class allowances to the 30 days of basic pay (Paragraph 2). The payment period of bonus shall be 100% of the monthly wage payment (Paragraph 3). No bonus shall be paid to a leaver (Paragraph 4). The payment of bonus shall be made only to a person who has served as of 20 days (Paragraph 5). Where the number of working days falls short of the number of working days (Paragraph 6).” (hereinafter referred to as “instant provision”).

C. Article 85 of the Rules of Employment of the Defendant also provides that “If the number of working days falls short of the number of working days due to the admission or retirement, the wage shall be paid on a daily basis, except that the daily amount shall be calculated on the basis of contractual work hours.”

D. Meanwhile, on January 29, 2007, the Defendant dismissed the Plaintiffs as of March 31, 2007. However, at the time, the Defendant calculated and paid the instant regular bonus corresponding to the period of work from March 21, 2007 to March 31, 2007 for the Plaintiffs, who had not been dismissed as of April 20, 2007, who had not been employed as an employee.

3. Examining these facts and the following circumstances revealed therefrom in light of the legal principles as seen earlier, it cannot be readily concluded that the instant provision does not provide any regular bonus to a person who, even if having provided labor on the 20th of each month, did not work at all.

A. The instant regular bonus that is regularly and continuously paid according to the annual payment rate of 1,200% on the basis of collective agreements and rules of employment constitutes wages which are remuneration for labor.

B. It is understood that Article 98(6) of the Rules of Employment of the Defendant provides that the settlement of work hours shall be made in proportion to the period of work performed, taking into account the nature as wages of the instant regular bonus.

C. As seen earlier, the Defendant’s payment of the instant regular bonus to the Plaintiffs that had already been dismissed in proportion to the number of days during which he provided labor may be deemed to have been due to the application of Articles 85 and 98(6) of the Rules of Employment.

D. Unlike the case of the instant regular bonus payment against the Plaintiffs, there is no evidence to verify that the Defendant had not settled and paid the instant regular bonus to the retired workers before every 20th day of the month on the basis of the period of work before the retirement.

4. Ultimately, the lower court should have carefully determined whether the instant regular bonus is not paid to those who were not employed on the 20th day of each month, even if they were to provide labor, or whether they were to pay the instant regular bonus in proportion to the period of service even if they were to retire before the 20th day of each month.

Nevertheless, the lower court, solely on the grounds stated in its reasoning, determined that the instant regular bonus is qualified to receive the benefits of being in service at a specific time, so even if a worker provided labor, it is not entitled to receive the instant regular bonus during the pertinent period if the worker retires before a specific point of time, and thus lacks fixedness, etc., rejected the Plaintiffs’ assertion that the fixedness of the instant regular bonus for the retired worker should be calculated on a daily basis, and that, in fact, the Defendant was not denied to the extent of payment in proportion to the working period, even if the employee retires before a specific point of time.

In so determining, the lower court erred by failing to exhaust all necessary deliberations or exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, thereby adversely affecting the conclusion of the judgment.

5. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Noh Jeong-hee (Presiding Justice)