The Supreme Court has ruled that even if a direct labor contract was not concluded, local public enterprises must pay at least a minimum performance bonus to employees of their affiliated organizations.
According to the legal community on the 8th, the Supreme Court's First Division (Presiding Justice Kim Seon-su) overturned the lower court's ruling that dismissed the performance bonus claim lawsuit filed by employees of the Daegu Urban Development Corporation's affiliated Leisure Sports Center against the corporation, and remanded the case to the Daegu High Court.
The court stated, "The lower court's judgment, which dismissed all the plaintiffs' claims on the grounds that the defendant (the corporation) was not obligated to pay even a minimum performance bonus, involved a legal error regarding the occurrence of the defendant's obligation to pay the performance bonus and failed to conduct the necessary examination, which affected the judgment."
The 32 employees of the Leisure Sports Center filed a lawsuit in 2020, claiming that they should have been evaluated and received performance bonuses based on the corporation's own performance management regulations like other employees, but the corporation did not do so. The plaintiffs claimed approximately 427 million KRW in unpaid performance bonuses and interest for the years 2016 to 2018.
However, the corporation argued that the employees had labor contracts with the Leisure Sports Center and that the center's own employee management regulations applied, so the corporation was not obligated to pay performance bonuses.
The first trial sided with the corporation, reasoning that the Leisure Sports Center director hired employees and concluded labor contracts according to the center's own regulations, and since there were separate employee management regulations between the parties, it was difficult to apply the corporation's performance management regulations.
On the other hand, the second trial ruled that the corporation's regulations should apply to the Leisure Sports Center employees, considering that the center director concluded labor contracts with employees under authority delegated by the corporation's president, but it did not recognize the obligation to pay performance bonuses.
The employees filed the lawsuit on the premise that there was an obligation to pay at least a minimum performance bonus, but since no performance evaluation was conducted for the Leisure Sports Center employees, the amount could not be specified.
The court also cited that under the performance bonus calculation system, if the Ministry of the Interior and Safety's management performance evaluation results in the lowest grade, "Ma," the performance bonus could be "0 KRW."
The plaintiffs also claimed damages for the corporation's illegal acts as a preliminary claim in the second trial, but this was also rejected.
However, the Supreme Court's judgment was different.
The Supreme Court ruled that there was an obligation to pay performance bonuses, noting that even employees of the corporation who received the lowest individual evaluations during the claim period from 2016 to 2018 received performance bonuses.
The corporation classified evaluation grades into four levels (Su, Woo, Yang, Ga) based on individual work performance, and paid performance bonuses with different payment rates according to those grades.
The court pointed out, "The corporation never received the 'Ma' grade in management evaluations from 2016 to 2018," and "The payment rates for evaluation bonuses paid to workers who received the lowest individual evaluation grade were 170% in 2016, 175% in 2017, and 130% in 2018."
Furthermore, the court concluded, "Since the defendant did not conduct performance evaluations or assign individual evaluation grades to the plaintiffs from 2016 to 2018, it is difficult to recognize the obligation to pay performance bonuses based on grades higher than the lowest grade 'Ga.' However, since the payment rate assigned to the lowest grade 'Ga' is guaranteed, the defendant should be obligated to pay the corresponding performance bonuses."
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