JIPYONG LLC

[Case No. Supreme Court decision 2016da236407 dated January 30, 2020]

The Supreme Court held that the holiday allowance as set forth under Article 56 of the old Labor Standards Act (prior to the amendment as the law no. 15513 dated March 20, 2018) was not required as to the overtime of 10 hours per day because the extended work day as set forth under the collective agreement could not be deemed holiday.

The defendant, based on the collective agreement executed by the logistics trade union and labor union, paid the wage to the drivers who are the union members, including the plaintiff. The above collective agreement provided that the working system for the drivers should be with two shifts for one day; the work hours should be 40 hours per week; the overtime should be within five hours every other week (the days on the overtime work was carried out shall be called “Extended Work Days”); there should be one day of absence every other week (without pay); and there should be one holiday per week. The defendant paid the extended labor allowance of 150% of the hourly wage based on 10 hours of work per day for the work on the extended work days.

The lower court decision deemed that the work carried out on the extended work days were work on the holiday requiring holiday allowance in terms of the Labor Standards Act, and accordingly determined that the defendant should pay overtime labor allowance amounting to 200% of the hourly wage including the additional holiday allowance (50% of hourly wage) for the work on extended work days exceeding 10 hours per day.

However, the Supreme Court reversed the lower court decision. First, the Supreme Court noted that Article 45 of the old Labor Standards Act provides for additional payment more than 50% of the ordinary wage for work on the holiday, which includes not only the work on the holiday as set forth under Article 55 of the old Labor Standards Act but also the labor on the days designated as holidays under the collective agreement or rules of employment. The Supreme Court confirmed the existing legal principle that whether these days were holidays should be determined by considering the totality of the wording of the relevant provisions under the collective agreement and rules of employment, the background of these provisions, the regulatory system and practices relating to the work hours of the relevant places of business and the industry and etc.

Further, the court determined that the overtime work of 10 hours per day carried out on extended work day did not require the payment of holiday allowance as set forth under Article 56 of the old Labor Standards Act because it was unlikely that the extended work day at the defendant’s place of work was the day designated as holiday for the following reasons.

(i) With the work hours being reduced to 40 hours per week, the collective agreement provided for five working days and one holiday per week. In this process, the extended work day was not set to be a holiday. Also, there was no material supporting that the extended work day was a holiday by any practice.

(ii) In view of the background circumstances and details on the payment of extended labor allowance, there was no circumstance to deem this allowance to be the holiday allowance. Also, there was no payment of allowance by the defendant for any work carried out on the extended work day as the work on the holiday.

The Supreme Court reversed the part on claim for additional wage for the work on the holiday from the lower court’s decision against the defendant, and remanded the case to the lower court.