CONTENTS
- 1. A Case Concerning Whether the Minimum Wage Act Applied
- - The Determination of the Court of First Instance
- - The Determination of the Appellate Court Concerning the Minimum Wage Act
- 2. The Supreme Court's Determination Concerning the Minimum Wage Act
- - The Possibility That the Agreement on Contractual Working Hours (1.5 Hours) Under the One-Person-One-Vehicle System Is Void
- - The Scope of Hours Subject to Minimum Wage Payment
- 3. The Significance of This Judgment Concerning the Minimum Wage Act
- - Daeryun's Strategy
1. A Case Concerning Whether the Minimum Wage Act Applied
This was a case in which the issue was whether an agreement was valid where the employer formally reduced working hours in order to circumvent the mandatory provisions of the Minimum Wage Act.
The defendant company entered into employment contracts with taxi drivers and operated under a structure in which the drivers paid a fixed portion of their transportation revenue as a daily quota payment and then received a fixed wage.
For the one-person-one-vehicle work arrangement newly introduced after 2017, the company set the contractual working hours at 1.5 hours per day.
The drivers claimed that their actual working hours were far longer, and that setting the hours this short was a means of concealing the failure to meet the minimum wage, and they sought the difference in wages.
The issue was whether this setting of 1.5 hours was a valid agreement, or whether it was a void agreement that evaded the special provision of Article 6, Paragraph 5 of the Minimum Wage Act.
The Determination of the Court of First Instance
The court of first instance granted part of the plaintiff drivers' claims, but some plaintiffs, particularly Plaintiff 8, lost or prevailed only in part.
The court of first instance held that even if the setting of the contractual working hours under the one-person-one-vehicle system was somewhat short, it was difficult to conclude that it was legally void.
It did, however, recognize the fact that the minimum wage had not been met for certain periods of employment.
The Determination of the Appellate Court Concerning the Minimum Wage Act
The appellate court (Daegu High Court) made the following determinations.
It held that the one-person-one-vehicle setting (1.5 hours) was valid.
Because this was the first time a new work arrangement had been set after the special provision took effect, the court held that it could not be regarded as an agreement to shorten hours.
It held, however, that the agreement to shorten hours under the alternate-day system (the setting of 3 hours) was void because it was intended to circumvent the minimum wage.
Accordingly, in calculating the minimum wage, the court computed the shortfall by including all 16 hours per day and the portion exceeding 13 full attendance days per month.
Ultimately, the lower court recognized the claims of some drivers and dismissed the rest.
2. The Supreme Court's Determination Concerning the Minimum Wage Act
The Supreme Court reversed part of the lower judgment and remanded the case to the Daegu High Court.
The Possibility That the Agreement on Contractual Working Hours (1.5 Hours) Under the One-Person-One-Vehicle System Is Void
The Supreme Court held that even for a new work arrangement, contractual working hours of 1.5 hours were void if they markedly diverged from the actual work and were intended to circumvent the Minimum Wage Act.
This constitutes an act in evasion of the law that circumvents the mandatory provisions of the Minimum Wage Act, and the court held that it must supplement the intent of the parties to the employment relationship and determine valid contractual working hours.
The court further pointed out that, considering the work arrangements of taxi companies near Gumi (two shifts of six hours and forty minutes or more), the defendant company's setting of 1.5 hours was clearly unreasonable.
The Scope of Hours Subject to Minimum Wage Payment
The Supreme Court held that working hours exceeding the standard of 8 hours per day and 40 hours per week, and working hours on days exceeding the monthly contractual working days (13 days), are in principle excluded from the calculation of the minimum wage.
Accordingly, the court held that the lower court's use of all 16 hours per day as the basis for calculation was a misapprehension of the law.
As a result, Plaintiff 8's final appeal was rejected; the claims of some plaintiffs (relating to the period of employment under the one-person-one-vehicle system) were found to have merit and were reversed; and the portion of the defendant's loss relating to the calculation of the minimum wage was also reversed, and the case was remanded to the Daegu High Court.
3. The Significance of This Judgment Concerning the Minimum Wage Act
This judgment carries significant meaning in the following respects.
· The setting of working hours intended to circumvent the minimum wage is void
The court made clear that where contractual working hours diverge from the actual work and the special provision on the minimum wage has been abused, the court may declare it void as an act in evasion of the law.
· Clarification of the standard for calculating the minimum wage
By holding that the portion exceeding 8 hours per day and 13 contractual working days per month cannot be automatically included, the court gave concrete shape to the standard for calculating wages in alternate-day systems and special-provision industries.
· Presentation of a practical standard for supplementary interpretation
The court recognized that, in interpreting employment contracts and collective agreements, a court may supplement the intent of the parties and determine reasonable contractual working hours.
Daeryun's Strategy
Drawing on this judgment, Daeryun Law Firm presents the following practical strategies for businesses.
▶Verification of the actual working hours
▶Review of employment contracts and wage agreements
▶Litigation response strategy
In similar cases, Daeryun's attorneys experienced in wage and labor standards matters, attorneys handling corporate matters, and certified labor affairs consultants (gongin nomusa) organize the formula for calculating the contractual working hours and support the submission of statements for recalculating the minimum wage difference and severance pay.
▶Corporate risk management
A business that needs legal advice regarding the Minimum Wage Act is welcome to make a 🔗legal consultation reservation at any time.
