Supreme Court Rules Support Payments Must Be Made Only When Employers Hire Unemployed Who Completed Employment Success Package

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has ruled that even if an employer hires a person who has completed an employment support program announced by the Minister of Employment and Labor to receive the 'Employment Promotion Subsidy,' the subsidy is not payable if the person hired is not unemployed.

The Supreme Court's 2nd Division (Presiding Justice Min Yoo-sook) announced on the 5th that it overturned the lower court ruling in favor of A, a small business owner, who filed a lawsuit against the Daejeon Regional Employment and Labor Office demanding the cancellation of the order to return the Employment Promotion Subsidy, and remanded the case to the Daejeon High Court.

In 2015, A hired B and C, setting their working hours at 28 hours per week (part-time). B and C applied to participate in the Ministry of Employment and Labor's employment support program called the 'Employment Success Package' one day before being hired. The Employment Success Package is a government program that provides vocational training to low-income individuals facing difficulties in finding employment. Participants who secure jobs receive an employment success allowance, and employers who provide jobs receive an employment promotion subsidy.

B and C completed the first stage of the Employment Success Package, and A subsequently revised their employment contracts to convert them into indefinite-term contracts with 44 working hours per week. Because of this, A applied for and received the employment promotion subsidy. However, the Ministry of Employment and Labor imposed sanctions on A, alleging that A deliberately concealed the fact that B and C were hired before completing the first stage of the Employment Success Package and received the subsidy through false or other fraudulent means. A then filed a lawsuit.

The first trial ruled in favor of the Ministry of Employment and Labor. The court stated, "If the workers hired are not unemployed but already employed, even if they have completed the employment support program, they do not meet the requirements for receiving the employment promotion subsidy," and judged that "the sanction is lawful as it falls under cases where the subsidy was received or attempted to be received through false or other fraudulent methods."

However, the second trial overturned the first trial's decision. The appellate court reasoned, "Although the workers are not unemployed, considering the purpose of the Employment Insurance Act and that workers with prescribed working hours of less than 30 hours per week are also included in the support targets of the employment support program, hiring workers who completed the Employment Success Package can be seen as meeting the requirements for receiving the employment promotion subsidy, so the sanction is illegal."

Nevertheless, the Supreme Court ruled that hiring a person who completed the employment support program but is not unemployed cannot be considered eligible for the employment promotion subsidy.

The court stated, "The law intends to exclude from the subsidy those workers who, even if unemployed, were employed by the same employer immediately before becoming unemployed," and added, "Even if A initially hired the two individuals for less than 30 hours per week and then 're-hired' them for 30 hours or more, it cannot be interpreted that the subsidy is payable."