[edit] Supreme Court Decision 98Da34331 delivered on May 26, 2000 [Wages]
【Main Issues】
[1] Whether a labor union's act of dispute lacks legitimacy merely because of the fact that the dispute was triggered by a somewhat unreasonable demand for wage increase by the union, and that the act of dispute resulted in obstruction of the normal operation of business of the employer (negative)
[2] Requirements for a lock-out by employer to be deemed as legitimate, and the effects thereof
[3] A case where a lock-out by the employer was carried out abruptly only 3 days after the labor union commenced a law-abiding struggle was found to be lacking in legitimacy
【Summary of Decision】
[1] An act of dispute by a labor union is an act of strike staged in order to realize its arguments, by causing the state of conflict arising out of a disagreement on the terms of labor to be developed in its favor, which entails obstruction of the normal operation of business. Accordingly, an act of dispute is not lacking in legitimacy merely because the dispute was triggered by a somewhat unreasonable demand for wage increase by the union to the employer, and the act of dispute resulted in obstruction of the normal operation of business of the employer.
[2] There are explicit provisions in the Constitution and the labor-related laws which actively guarantee the employee's right of dispute, while there is no clear provision on the employer's right of dispute. This difference aims at liberating the employee, who stands in a clearly unfavorable position in his relationship to the employer due to severe restriction in terms of applying the means of pressure under general civil laws, from such restrictions, thereby promoting and securing equality between labor and management. Accordingly, as a general rule, it would not be necessary to recognize a right of dispute on the part of the employer who has an advantage in terms of power. However, in case where the employees' act of dispute in a specific labor dispute situation upsets the balance of power between labor and management, and the management becomes subject to a clearly unfavorable pressure on the contrary, it would serve the principle of equity to recognize the right of dispute on the part of the employer as a means of confrontation and defense, to resist such pressure and to recover the balance of power. It is apparently in anticipation of such case that our laws provide for the employers' lock-out as a form of an act of dispute along with the employees' strike or sabotage under Article 3 of the former Labor Dispute Mediation Act (repealed by Article 3 of Addendum to the Labor Union and Labor Relations Mediation Act, Law No. 5244 of December 31, 1996). However, a lock-out by the employer under the specific circumstance of labor dispute action can be deemed legitimate only if such action can be deemed reasonable as a means of confrontation and defense in respect to the act of dispute by the employees, in light of the principle of equality, in view of the specific circumstances relating to the attitudes of the parties and developments in the labor-management negotiations, the form of the employees' act of dispute, and the degree of damages incurred by the employer as a result thereof. Only if the lock-out is deemed a legitimate act of dispute, the employer can be exempted from the obligation to pay wages to the relevant employees for the lock-out period.
[3] A case where a lock-out by the employer was carried out abruptly only 3 days after the labor union commenced a law-abiding struggle was found to be lacking in legitimacy, even though the wage negotiation broke down because the labor union requested a wage increase to the highest level despite the fact that their average wage were already at the highest level when compared to that of other tax companies in the province.
【Reference Provisions】 [1] Article 3 (see Article 2, Item 6 of the Labor Union and Labor Relations Mediation Act) and Article 17 (see Article 46 of the Labor Union and Labor Relations Mediation Act) of the former Labor Dispute Mediation Act (repealed by Article 3 of Addendum to the Labor Union and Labor Relations Mediation Act, Law No. 5244 of December 31, 1996) / [2]Article 3 (see Article 2, Subparagraph 6 of the Labor Union and Labor Relations Mediation Act) and Article 17 (see Article 46 of the Labor Union and Labor Relations Mediation Act) of the former Labor Dispute Mediation Act (repealed by Article 3 of Addendum to the Labor Union and Labor Relations Mediation Act, Law No. 5244 of December 31, 1996) / [3] Article 3 (see Article 2, Item 6 of the Labor Union and Labor Relations Mediation Act) and Article 17 (see Article 46 of the Labor Union and Labor Relations Mediation Act) of the former Labor Dispute Mediation Act (repealed by Article 3 of Addendum to the Labor Union and Labor Relations Mediation Act, Law No. 5244 of December 31, 1996).
Article 3 of the former Labor Dispute Mediation Act (repealed by Article 3 of Addendum to the Labor Union and Labor Relations Mediation Act, Law No. 5244 of December 31, 1996) (Definition of Act of Dispute) The term "act of dispute" as used in this Act means actions or counter-actions which obstruct the normal operation of a business, such as strikes, sabotage, lock-outs and other activities through which the parties to labor relations intend to accomplish their claims.
Article 17 of the former Labor Dispute Mediation Act (repealed by Article 3 of Addendum to the Labor Union and Labor Relations Mediation Act, Law No. 5244 of December 31, 1996) (Requirements for Lock-out) An employer may conduct a lock-out only after the union commences an act of dispute, in which case the employer shall report the lock-out to the relevant administrative agencies and the Labor Committee.
【Plaintiffs, Appellees】 Kang Sang-bin and 81 others (Law Office Duksoo, Cheju Branch, Attorneys Jin Young-jin and 1 other, Counsel for plaintiffs- appellees)
【Defendant, Appellant】 Sung-Il Transportation Corporation (Law Firm Lee & Ko, Attorney Yoo Kyung-hee, Counsel for defendant-appellant)
【The Judgment of the Court Below】 Gwangju High Court Jeju Branch Judgment 97Na562 delivered on June 12, 1998
【Disposition】 The appeal shall be dismissed. All costs of appeal are assessed against the defendant.
【Reasoning】 The grounds for appeal are examined as follows.
An act of dispute by a labor union is an act of strike staged in order to realize its arguments, by causing the state of conflict arising out of a disagreement on the terms of labor to be developed in its favor, which entails obstruction of the normal operation of business. {See Article 3 of the former Labor Dispute Mediation Act (repealed by Law No. 5244 of December 31, 1996 - the same hereafter).} Accordingly, an act of dispute is not lacking in legitimacy merely because the dispute was triggered by a somewhat unreasonable demand for wage increase by the union from the employer, and the act of dispute resulted in obstruction of the normal operation of business of the employer.
Meanwhile, there are explicit provisions in the Constitution and the labor-related laws which actively guarantee the employee's right of dispute, while there is no clear provision on the employer's right of dispute. The purpose of this is to liberate the employee, who stands in a clearly unfavorable position in his relationship with the employer due to severe restriction in terms of the means of applying pressure under general civil laws, from such restrictions, thereby promoting and securing equality between labor and management. Accordingly, as a general rule, it would not be necessary to recognize a right of dispute on the part of the employer who has an advantage in terms of power. However, in case where the employees' act of dispute in a specific labor dispute situation upsets the balance of power between labor and management, and the management becomes subject to a clearly unfavorable pressure on the contrary, it would serve the principle of equity to recognize the right of dispute on the part of the employer as a means of confrontation and defense, to resist such pressure and to recover the balance of power. It is apparently in anticipation of such case that our laws provide for the employers' lock-out as a form of act of dispute along with the employees' strike or sabotage (Article 3 of the former Labor Dispute Mediation Act).
However, a lock-out by the employer under the specific circumstance of labor dispute action can be deemed legitimate only if such action can be deemed reasonable as a means of confrontation and defense in respect to the act of dispute by the employees, in light of the principle of equality, in view of the specific circumstances relating to the attitudes of the parties and developments in the labor-management negotiations, the form of the employees' act of dispute, and the degree of damages incurred by the employer as a result thereof. Only if the lock-out is deemed a legitimate act of dispute can the employer be exempted from the obligation to pay wages to the relevant employees for the lock-out period.
According to the reasoning in the court below's decision, the court below adopted the following facts: ① In the 1995 wage negotiations, the labor union of the defendant company (the "labor union") demanded an additional 10% wage increase even though, in the 1994 wage negotiation, it had agreed to a 14% wage increase which was the highest level along with 11 other companies among 35 tax companies within Jeju Province, while the defendant argued that the wages should stay at their current level considering that the wage level of the drivers of the defendant company was higher than that of other companies. Accordingly, the labor union and the defendant engaged in wage negotiations on 8 occasions from June 12 to July 12, 1995, but the negotiations were unsuccessful due to difference in opinion on wage increase rate and the company portion amount (portion of income to be paid to the company by the drivers). ② The labor union thus submitted a report of labor dispute to the Jeju Regional Labor Committee and other authorities on July 31, 1995, and further negotiations took place on several occasions during the cooling-off period. When these negotiations proved to be unsuccessful, the labor union resolved upon a sabotage at an extraordinary general meeting on August 17, 1995, and commenced a so-called law-abiding struggle whereby the drivers reported to and left work on time, did not commit any violation of traffic regulations such as speeding or signal violation, and did not engage in any illegal activity such as ride sharing or charging improper fare. ③ As a result, the amount of company portion decreased to a level of 35,000~75,000 won per day, which was about one-half of the previous level of 98,000~120,000 won. ④ The defendant then submitted a lock-out report to the said Labor Committee and other authorities on the grounds of decrease in revenue on August 19, 1995, which was 3 days after commencement of the law-abiding struggle by the labor union, and effected the lock-out as of 04:00 hours on August 20, 1995 against all members of the labor union, by suspending service of the defendant company's 46 vehicles except for 5 vehicles operated by non-union members. ⑤ Thereafter, defendant continued the lock-out without any particular dialogue with the labor union, arguing that "[the defendant] cannot revoke the lock-out unless the labor union first promises to stop the act of dispute including the law-abiding struggle, and to resume normal operation" until September 22, 1995, when it concluded a wage agreement with the labor union for increase of the wages by 4.5%, in consideration for an increase in the company portion by 4,000 won, and discontinued the lock-out. ⑥ As of August 17, 1995 when the labor union commenced the said law-abiding struggle, the monthly average wage of the drivers at the defendant company was 651,400 won (in case of 1 year of continuous service), which was the highest level among the 35 tax companies within Jeju Province, along with 12 other companies. ⑦ Among the 35 taxi companies within Jeju Province, 25 companies had concluded their negotiations for the 1995 wage increase, and 12 of those 25 companies decided to increase wages by 2 to 10% for 1995, while 13 companies decided to freeze the wages. In particular, only 3 out of the 12 other companies which paid the same level of wages as the defendant company decided upon a wage increase by 3% to 10%, and the other 9 companies were conducting normal operations following agreements to freeze the wages. The court below then concluded that the lock-out effected by the defendant was lacking in legitimacy, and accordingly the defendant cannot be exempted from the obligation to pay the wages to the plaintiffs for the lock-out period, on grounds that the lock-out by the defendant, effected only 3 days after commencement of the law-abiding struggle, without any attempt to negotiate with the labor union through dialogue over a longer period of time, cannot be deemed an unavoidable measure that was taken passively and defensively in order to protect the company, under circumstance where the balance of power between labor and management was upset due to an act of dispute by the employees, and the employer was being subject to seriously disadvantageous pressure on the contrary. The court below based this conclusion on the observations that: the above law-abiding struggle of the labor union was similar in form to the sabotage in light of its purpose, procedure, manner and the decrease in defendant's income caused thereby, and the legitimacy of such act of dispute cannot be denied merely because the normal operation and financial conditions of the defendant were adversely affected thereby in view of the engaging party, objective, timing, procedure, means and method thereof, and meanwhile, the demands of the labor union for increase of wages was not so exorbitant that it was utterly unacceptable by the defendant considering that some of 12 other companies which were paying the same level of wages as the defendant decided to increase the wages by 10% as demanded by the labor union of the defendant company; the law-abiding struggle of the labor union did not and reach a point of illegal and disruptive operation such as fixing the level of the company portion or refusing to take passengers, beyond compliance with laws and regulations relating to operation of vehicles and terms on working hours under the collective bargaining agreement; and that the law-abiding struggle of the labor union lasted only 3 days and it cannot be conclusively assumed that the decrease in the defendant's income for such brief period of time resulted in a material adverse effects on the management of the defendant.
The above judgment of the court below is valid as it is in compliance with the legal principles discussed above, and there was no reversible error in matters of law as to legitimacy of law-abiding struggle or lock-out as otherwise alleged in the grounds for appeal.
The grounds for appeal cannot be accepted.
Accordingly, the appeal shall be dismissed. All costs of appeal are assessed against the losing party. This decision is delivered with the assent of all Justices who reviewed the appeal.
Justices Song Jin-hun (Presiding Justice)
Lee Don-hui (Justice in charge)
Lee Im-soo
Yoon Jae-sik
- This is a legal document in the public domain according to Korean Copyright Law.
