Administrative Litigation | Judgment Revoking the Suspension of Daycare Center Subsidies as a Violation of the Principle of Statutory Reservation

A, the plaintiff in the administrative litigation, was the director of a daycare center in the OO region. A childcare teacher employed at the center was indicted on charges of habitually subjecting children to physical and emotional abuse and received a suspended sentence (a suspended sentence under Korean law, broadly comparable to a suspended sentence or probation in common-law systems, under which the conviction loses its effect once the suspension period passes without incident) of imprisonment.

A, as the person responsible for managing the childcare teacher, also received a suspension of indictment (a prosecutor's discretionary decision not to indict despite sufficient evidence, comparable to a deferred or declined prosecution) on the ground that A had failed to fulfill that management responsibility.

In response, the local government imposed a one-month suspension of the daycare center's operations and a penalty surcharge of 2.55 million won, and it also imposed a two-year suspension of local-budget subsidies.

A, however, argued that this disposition rested solely on the "OO Regional Guidelines for the Local-Budget Subsidy Program for Infant and Child Care" without any legal basis, and therefore violated the principle of statutory reservation^*.

A also argued that, because A had faithfully carried out supervision and education to prevent child abuse, this disposition amounted to an abuse of discretionary power.

The local government, on the other hand, countered that, under the Enforcement Decree of the Infant and Child Care Act, a local government may determine the specific matters concerning the payment of subsidies, so the disposition had a legal basis and did not constitute an abuse of discretionary power.

* Principle of statutory reservation : the principle that an administrative action requires a legal basis, such as a formal statute enacted by the National Assembly or a legal order issued under delegation by statute, in order to be carried out

The District Court that heard the administrative litigation accepted the arguments of the plaintiff, A, and revoked the disposition suspending the subsidies.

The court held, "The Infant and Child Care Act and its Enforcement Decree merely provide for the methods of supporting subsidies and delegate only the necessary matters concerning such matters; they cannot be construed as delegating even the types or methods of sanctions to be imposed on a recipient of subsidies."

In other words, the State or a local government has only an obligation to pay subsidies to a daycare center that meets the requirements, and has no discretion to suspend the payment of subsidies at will.

In this administrative litigation, we analyzed a District Court judgment finding that an administrative disposition based on a local government's internal guidelines, without any legal basis, was unlawful as applied to the suspension of subsidies for a daycare center.

As in the case above, when a daycare center wrongfully receives subsidies or a child abuse incident occurs, it may be subject to administrative dispositions such as a suspension of operations, a suspension of qualifications, a penalty surcharge, or the recovery of subsidies under the Infant and Child Care Act, the Subsidy Management Act, and other laws.

If, however, an administrative disposition has been imposed unfairly, you may file an 🔗administrative appeal (a pre-litigation review before an administrative agency, comparable to an administrative appeal or agency review in common-law systems) and 🔗administrative litigation. You will need to present clear evidence that the disposition was improper, and seeking the assistance of an attorney experienced in administrative matters can be helpful.

The 🔗Administrative Group of Daeryun Law Firm LLP brings together attorneys experienced in administrative matters, including those with prior official practice at local administrative appeals commissions, the Ministry of Employment and Labor, the Korea Workers' Compensation and Welfare Service, and the Central Disciplinary Committee for Public Officials, who have accumulated varied practical experience and know-how in administrative litigation and administrative remedies and who work to protect the rights and interests of clients. If you need assistance, you are welcome to request a legal consultation.