CONTENTS
- 1. Case Overview: Termination of an Automobile Sales Labor-Provision Contract and the Labor Relations Commission's Remedy Order
- - The Lower Court's Determination
- - The Supreme Court's Determination
- 2. The Standard for Establishing the Crime of Violating a Remedy Order as Determined by the Supreme Court
- - The Meaning of the Crime of Violating a Remedy Order Under the Trade Union and Labor Relations Adjustment Act
- - Expiration of the Contract Term and the Possibility of Reinstatement to the Original Position
- - Why Whether a Reasonable Expectation of Contract Renewal Was Asserted Is Important
- - Whether a Criminal Court May Separately Determine the Contractual Relationship
- 3. The Impact of the Judgment on Corporate Human Resources and Labor Practice
- - Matters Companies Need to Verify
- 4. Corporate Human Resources and Labor Disputes, the Assistance of the Corporate Legal Group
- - The Corporate Legal Group's Strategy
1. Case Overview: Termination of an Automobile Sales Labor-Provision Contract and the Labor Relations Commission's Remedy Order
This case began when an employer operating an automobile dealership terminated, in the middle of the contract term, the labor-provision contracts it had concluded with salespersons.
The salespersons in question were found to be employees under the Trade Union and Labor Relations Adjustment Act, and each of their contract terms was set at two years.
The employer, however, terminated the contracts while the contract terms still remained, and the workers responded by filing applications with the Labor Relations Commission for a remedy against the unfair labor practice.
The Jeonbuk Regional Labor Relations Commission determined that the employer's termination of the contracts constituted an unfair labor practice and issued a remedy order requiring revocation of the termination of the labor-provision contracts and reinstatement to the original positions.
The National Labor Relations Commission subsequently dismissed the employer's application for reexamination as well, so the remedy order was maintained, and the employer even brought a lawsuit seeking revocation of the reexamination decision but lost.
However, while the administrative litigation was pending, the contract terms of all the workers expired, after which the prosecution, taking the view that the employer had failed to reinstate the workers despite the finalized remedy order, indicted the employer on charges of violating Article 89, Item 2 of the Trade Union and Labor Relations Adjustment Act.
The Lower Court's Determination
The lower court found the defendant guilty. The lower court took the view that the Labor Relations Commission's remedy order had already become final and that it was possible for the defendant to reinstate the workers.
It further determined that, because the employer had not actually complied with the reinstatement order, the crime of violating a remedy order under the Trade Union and Labor Relations Adjustment Act was established.
In other words, the lower court held that, regardless of whether the contract term had expired, criminal liability could be found if a finalized reinstatement order existed and the employer had failed to comply with it.
The Supreme Court's Determination
The Supreme Court, however, did not accept the lower court's determination as it stood.
The Supreme Court held that the crime of violating a remedy order under the Trade Union and Labor Relations Adjustment Act is established on the premise that the content of the remedy order is clear, that an actual possibility of compliance exists, and that the employer is able to recognize the scope of the duty.
In particular, the following circumstances were given significant weight in this case.
• the Labor Relations Commission likewise did not separately determine whether the contractual relationship continued after the contract term expired; and
• it was not made clear that the reinstatement order extended to the period after the contract ended.
Under these circumstances, the Supreme Court determined that it was difficult for the employer to clearly recognize that a duty of reinstatement continued to exist even after the contract term ended.
In the end, the Supreme Court held that, unless it was made clear in the Labor Relations Commission's determination that a duty of reinstatement continued to exist even after the contract term expired, the crime of violating a remedy order is difficult to recognize, and it accordingly reversed and remanded the lower judgment.
2. The Standard for Establishing the Crime of Violating a Remedy Order as Determined by the Supreme Court
In this case, the Supreme Court focused on examining whether criminal liability can be found immediately solely on the ground that a reinstatement order of the Labor Relations Commission exists.
In particular, how far the content of the remedy order extends, and whether an actual possibility of compliance exists, were treated as important criteria for the determination.
The Meaning of the Crime of Violating a Remedy Order Under the Trade Union and Labor Relations Adjustment Act
Any person who falls under any of the following items shall be punished by imprisonment for not more than three years or by a fine not exceeding 30 million won.
1. A person who violates the provisions of Article 37 (2), Article 38 (1), Article 42 (1), or Article 42-2 (2)
2. A person who violates a remedy order that has become final under Article 85 (3) (including cases where it applies mutatis mutandis under Article 29-4 (4)) or that has become final after the filing of an administrative lawsuit
Article 89, Item 2 of the Trade Union and Labor Relations Adjustment Act provides that criminal punishment is possible where a person fails to comply with a finalized remedy order or reexamination decision of the Labor Relations Commission.
In this case as well, the Supreme Court took the view that the crime of violating a remedy order is a crime that is established on the premise of a finalized remedy order of the Labor Relations Commission.
The Supreme Court, however, also set forth as criteria for its determination that, because the remedy order forms the basis for criminal punishment, it must be clear enough for the employer to recognize and an actual possibility of compliance must exist.
In particular, the Supreme Court held as follows.
“Because a remedy order serves as the premise for criminal punishment, its content must be clear enough for the employer, as the counterparty, to recognize.”
This can be understood to mean that criminal liability is not found immediately merely because a reinstatement order exists.
Expiration of the Contract Term and the Possibility of Reinstatement to the Original Position
Where, at the time a worker filed an application for a remedy against unfair dismissal, the working relationship had already terminated and the worker had departed from the status of an employee due to grounds such as reaching the mandatory retirement age, expiration of the term of the employment contract, or closure of the business, it is reasonable to regard the interest in receiving a remedy order from the Labor Relations Commission as having been extinguished.
Citing its existing precedent, Supreme Court, Decision of July 14, 2022, 2020 Du 54852, the Supreme Court determined that even in the case of a dismissal or a termination of a labor-provision contract carried out during the contract term, if the contract term expires while the dispute is ongoing, the contractual relationship is, in principle, also terminated.
In this judgment as well, the Supreme Court took the view that “the employment relationship or the labor-provision contractual relationship terminates as a matter of principle” and that, after the contractual relationship terminates, “the worker's reinstatement to the original position or the employer's compliance with the remedy order becomes impossible.”
On the premise of this legal principle, the Supreme Court determined that, in a situation where the contract term has already expired, how far the scope of the reinstatement order can be interpreted to extend is important.
Why Whether a Reasonable Expectation of Contract Renewal Was Asserted Is Important
The Supreme Court determined that there are exceptional cases in which the effect of a reinstatement order may be maintained even after the contract ends, and in this connection it noted that whether a practice of contract renewal or a form of continued employment exists is also an important factor in the determination.
The Supreme Court took the view that, where a worker argues in the Labor Relations Commission proceedings to the effect that the contract should be renewed even after the contract ends, the Labor Relations Commission may examine and determine whether the contract is to be renewed and whether the contractual relationship continues.
Accordingly, in the judgment the Supreme Court held that “a remedy order directing reinstatement to the original position may be issued even after the term has expired.”
• the Labor Relations Commission likewise did not determine whether the labor-provision contractual relationship continued after the contract term expired; and
• no related statement existed in the reasoning of the reexamination decision or the initial decision either.
However, in this case the points above were given significant weight, and on the basis of these circumstances the Supreme Court determined that it was difficult for the employer to clearly recognize that the reinstatement order extended to the period after the contract ended.
Whether a Criminal Court May Separately Determine the Contractual Relationship
The Supreme Court also examined whether a criminal court may separately make a supplementary determination on matters that the Labor Relations Commission did not determine.
This is a question connected to how the relationship between the scope of the Labor Relations Commission's determination and criminal liability should be viewed, and the Supreme Court took the view that a criminal court must not, beyond the Labor Relations Commission's determination, separately make a supplementary determination on the contractual relationship.
Accordingly, in the judgment the Supreme Court held that “it is not for the court to determine this separately and thereby find the crime of violating a remedy order to be established.”
In other words, the Supreme Court held that, where the Labor Relations Commission has not determined matters such as whether the contractual relationship continued after the contract ended or whether a reasonable expectation of contract renewal existed, a criminal court cannot additionally interpret these matters and find criminal liability.
This holds practical significance in that it organizes the relationship between the scope of the Labor Relations Commission's determination and criminal liability.
3. The Impact of the Judgment on Corporate Human Resources and Labor Practice
This judgment is a case that shows that a remedy order of the Labor Relations Commission can later lead to a question of criminal liability.
In particular, for companies that operate fixed-term or labor-provision contract structures, there is a possibility that the timing of contract termination and the scope of the Labor Relations Commission's determination will develop into important issues.
It is also significant in that what arguments and determinations were made at the Labor Relations Commission stage may affect the subsequent administrative litigation and criminal proceedings.
Matters Companies Need to Verify
Given that the scope of a reinstatement order may become an issue even after the contract ends, companies may need to review their contract structures and their strategies for responding before the Labor Relations Commission.
Matters to Verify | Key Points to Review |
Contract Structure | Whether it is fixed-term and the structure of contract termination |
Renewal Practice | Whether there is repeated renewal and the issue of a reasonable expectation of contract renewal |
Response Before the Labor Relations Commission | The arguments and the structure of proof at the remedy application stage |
Scope of Reinstatement | Whether the duty of reinstatement after the contract ends is included |
Reexamination and Administrative Litigation | Review of the timing of the contract term's expiration |
Criminal Risk | The possibility that the crime of violating a remedy order is established |
In particular, companies that operate labor-provision contract structures should also review what significance their contract operation methods and the actual form of work may carry in the course of the Labor Relations Commission's determination.
4. Corporate Human Resources and Labor Disputes, the Assistance of the Corporate Legal Group
In Labor Relations Commission cases, there are instances in which the timing of contract termination, the scope of the reinstatement order, and whether the contractual relationship continues all become issues together.
In particular, for companies that operate fixed-term or labor-provision contract structures, the structure of the determination in subsequent administrative litigation and criminal proceedings may differ depending on what arguments and determinations were made at the Labor Relations Commission stage.
Even where operations are carried out in the form of an engagement contract or a freelance contract, whether the parties qualify as employees under the Trade Union and Labor Relations Adjustment Act may become an issue depending on the actual manner in which the work is performed and the structure of direction and supervision.
The Corporate Legal Group of Daeryun Law Firm LLP forms a task force composed of labor attorneys, labor consultants, and corporate attorneys to carry out a review of the contract structure connected to the Labor Relations Commission's remedy procedure, the scope of the reinstatement order, and the issues of administrative litigation and criminal risk.
The Corporate Legal Group's Strategy
▶ Reviewing the content of the arguments and the structure of the decisions at the initial and reexamination stages before the Labor Relations Commission to analyze the scope of the reinstatement order and whether the contractual relationship continues
▶ Confirming the actual manner in which work is performed and the relationship of direction and supervision in engagement-contract or freelance operating structures to assess the possibility of recognizing employee status under the Trade Union and Labor Relations Adjustment Act
▶ Organizing the key issues on the basis of relevant precedents and legal principles where, in the course of administrative litigation, the timing of the contract term's expiration conflicts with the scope of the remedy order
▶ Analyzing whether the crime of violating a remedy order is established in connection with a Labor Relations Commission case, as well as the issues arising in criminal proceedings, in order to establish a direction for response
If you need a review of the dispute structure relating to a Labor Relations Commission remedy order, an unfair labor practice, or a fixed-term or labor-provision contract, you are welcome to review your direction for response through a consultation with a 🔗corporate attorney.
