There may be some confusion as to whether national holidays must be granted with pay and whether employees should be granted paid leave in case of illness or injury that occurs regardless of work. In this regard, legal holidays must be granted with pay, and in the case of contractual holidays, the decision to grant paid or unpaid leave may be determined by the Employer's approval, a collective agreement, or employment rules. In other words, if paid leave is stipulated under labor law, it becomes a legal holiday and a legal vacation. If it is not specified by labor law and is determined at the discretion of the company, it becomes a contractual holiday or a contractual leave. Legal holidays include national holidays, weekly holidays, and workers' days, and contractual holidays refer to all holidays implemented by the company. Legal vacations include annual paid vacation, prenatal and postnatal leave, spouse childbirth leave, etc., while contractual leaves include condolence leave, sick leave, summer vacation, etc. We will examine the key points and application cases related to this matter in detail.

■ Contractual Holiday
A contractual holiday is recognized when it is specifically established through employment regulations or collective agreements and differs from statutory holidays. Employers may choose to treat contractual holidays as either paid or unpaid days off. In the case of statutory holidays, employers must grant employees time off on specific dates and provide additional holiday pay if employees work on those days. Statutory holidays include weekly rest days (as mandated by Article 55 of the Labor Standards Act, which requires employers to provide paid days off to employees at least once per week on average), national holidays, and Labor Day (designated as May 1st and recognized as a paid holiday under the Labor Standards Act). However, the scheduling and compensation for contractual holidays are determined entirely at the employer's discretion. If a contractual holiday is designated as a paid holiday, employers must pay holiday overtime wages to employees who work on that day.

❍ Types of Contractual Holidays
Contractual holidays include dates such as the company's founding anniversary or the establishment date of a labor union, as designated by the employer through collective agreements or employment regulations.

❍ Relationship between Labor Law and Contractual Holidays
National holidays are generally considered statutory holidays for which employers must provide paid time off. However, as noted above, statutory holidays are limited to Labor Day, national holidays, and weekly rest days. If a contractual holiday is established as a paid holiday, employers are not obligated to provide work on that day, and if work is provided at the employer's direction, the employee must receive their regular pay (100%) as well as holiday overtime pay (150% as mandated by Article 56 of the Labor Standards Act).

■ Contractual leave
Contractual leave refers to a type of leave that exempts employers from their obligation to provide work by providing paid leave through the Employer's approval, collective agreement, or employment rules. Examples of contractual leave include family leave, sick leave, summer vacation, special leave, etc. Contractual leave is not guaranteed by the Labor Standards Act, such as annual paid leave, pre- and post-natal leave, or spouse childbirth leave, but rather is a type of leave introduced from the perspective of employee welfare and in recognition of traditional Korean values. It is not a violation of the Labor Standards Act if contractual leave is not provided, and the employer may choose to operate it as paid, partially paid, or unpaid at their discretion.

❍ Types of Contractual Leave
(1) Family Leave
Many companies grant family leave in accordance with Korea's long-standing wedding and funeral customs. While the scope of the leave and the number of days may vary, generally, additional paid leave is granted in addition to annual paid leave. In the case of the employee's own marriage, up to 5 days of leave may be granted, up to 5 days for the death of an immediate family member, and 1 day for a parent's 60th birthday celebration.

(2) Sick Leave
If a worker cannot perform their duties due to personal illness or injury outside of work, they are not entitled to statutory sick leave, so they must use their own annual paid leave for medical care or pay for their own medical expenses. However, government officials can use paid sick leave for up to 60 days under Article 18 (Sick Leave) of the National Civil Servants Duty Regulations. Therefore, in the case of general companies without sick leave regulations, employees must use their remaining annual paid leave for treatment, and if they have used up all their annual paid leave, they may apply for unpaid leave. If an employee continues to be absent due to illness or injury, the company may terminate their employment due to the employee's fault. Many companies have established limited paid sick leave regulations in their employment rules, which are as follows:


Type
1
No sick leave policy. In this case, the employee must use their annual leave.
Type
2
"The company may provide sick leave for up to 90 days per year. Sick leave is unpaid."
Type
3
"In case an employee needs to take a prolonged absence due to an accident or illness outside of work, they may apply for paid sick leave within the limit of 14 days, including weekends, after using up all of their annual leave."
Type
4
"For personal illness-related leave, the employee will receive 90% of their monthly salary for the first month, 70% for the second month, and 50% for the third to sixth months."


(3) Summer Vacation
Summer vacation is an additional contractual leave system that is granted within one week during mid-summer to boost employee morale, separate from paid annual leave. It is mainly used collectively in manufacturing companies, and in small businesses, it may be used as a substitute for annual leave.

❍ Relationship between labor law and contract leave
(1) Impossible to change the timing of condolence leave and retroactive impossible Labor Standards Act 68207-1452, 1994. 9. 14.

Condolence leave is a paid leave granted to a worker on a specific day or for a specific period to guarantee the worker's participation in a commemoration or a condolence event through a collective agreement or employment rules. The employer cannot exercise the right to change the worker's leave schedule, and if the period has passed, the purpose of the leave has disappeared, and the right to claim the leave has also disappeared.

(2) Non paid condolence leave during the period of dispute Labor Standards Act 68207-883, 1999. 12. 15.

In the Labor Standards Act, a holiday refers to a day when the employer has no obligation to provide work to the worker, while a leave refers to a day when the employer exempts the worker from the obligation to provide labor even though the worker is in a state where the employer can receive labor. In the case of so- called contract holidays or contract leave stipulated in collective agreements or employment rules between labor and management, it should be regarded as a day when the employer has an obligation to provide labor, unlike a holiday in the Labor Standards Act, but the employer has waived the obligation to provide labor for the worker through a special agreement between labor and management. Therefore, if the employer cannot receive the worker's labor and cannot exercise the exemption, the contract holiday or contract leave itself does not occur. However, in the case of non-striking workers during the strike period, it should be judged based on whether the employer can receive the worker's labor.

(3) Calculation method for average salary during leave Administrative Interpretation: Retirement Pension and Welfare Division-518, 2008 10. 21.

When an employee takes a leave of absence with the approval of the employer due to injury, illness, or other reasons and then retires, the average salary is calculated as follows: For the purpose of calculating the retirement allowance, the average salary is the total amount of wages paid to the employee during the three months prior to the occurrence of the reason for which it should be calculated, divided by the total number of days in that period. If the average salary thus calculated is lower than the employee's regular salary, the regular salary is used as the average salary. If the employee has taken leave of absence due to injury, illness, or other reasons with the approval of the employer during the period of calculating the average salary, the period and the wages paid during that period are deducted from the total amount of wages used as the basis for calculating the average salary. Therefore, if an employee has taken a leave of absence with the approval of the employer due to injury, illness, or other reasons, the average salary should be calculated based on the remaining days and wages, excluding the leave period. If the leave period exceeds three months and there is no period to be used as a basis for calculating the average salary, the first day of the leave of absence is considered the date of occurrence for calculating the average salary for the previous three months. Additionally, if the average salary thus calculated is lower than the employee's regular salary, the regular salary should be used as the average salary.

(4) Changing the use of agreed-upon leave is a change in working conditions disadvantageous to the employee Working Condition Guidance Division-1774, 2009. 3. 25.

Previously, the company provided 5-10 days of sick leave per year based on the employee's position and length of service, without any restrictions on when it could be used. However, changing the conditions for the use of sick leave to only allow it to be used after the paid annual leave is exhausted ultimately restricts the employee's freedom to use it. Therefore, this is considered a disadvantageous change and requires the employee's consent to be validly applied.