■ Response Strategies of Companies to COVID-19 by Case
COVID-19 is a respiratory infection caused by a novel type of virus that first emerged in Wuhan, China, in December 2019 and has since spread worldwide. The virus is transmitted when droplets from an infected person's saliva enter another person's respiratory tract, eyes, nose, or mouth. The symptoms typically include fever (over 37.5℃), cough, and difficulty breathing, as well as pneumonia as a major symptom, after a latency period of 2 to 14 days (estimated). Naver(Korean Portal Site) Knowledge Encyclopedia, Coronavirus Infectious Disease (COVID-19), 2020. 2. 23. Retrieval: The official name COVID-19 is Co Corona, VI Virus, D Disease, 19 refers to the year 2019 when it was first reported.

On January 31, 2020, the Ministry of Employment and Labor announced guidelines for responding to COVID-19 in the workplace, applying the disease as a level 1 infectious disease. According to Article 2 of the Infectious Disease Prevention Act, a level 1 infectious disease is one that requires immediate reporting upon occurrence due to high fatality rates or the potential for group outbreaks and requires high-level isolation, such as negative pressure isolation (a special isolation ward). Therefore, patients with level 1 infectious diseases such as COVID-19 should receive hospitalization and treatment from infectious disease management institutions.
As no vaccines or treatments have yet been developed, hospitals provide treatments such as antiviral medication or antibiotics for secondary infections to help patients withstand viral attacks.

❍ In the Case of Infected Individuals:
If a worker becomes infected while engaged in personal activities, they will be isolated and receive treatment in accordance with the measures for preventing infectious diseases. If the worker takes leave during this time, the government provides certain support (Article 41 of the Law on the Prevention and Management of Infectious Diseases), but unpaid leave is the general rule as the cause of the absence is attributable to the worker. However, if the worker becomes infected while on a business trip, it will be considered an occupational disease under the Industrial Accident Compensation Insurance Act (Article 34 of the Enforcement Decree of the Industrial Accident Compensation Insurance Act).

❍ In the Case of a Shutdown Due to the Occurrence of Infected Individuals:
If a workplace shuts down due to the occurrence of an infected individual to prevent the spread of infection within the company, this cannot be attributed to the Employer, and may be considered an exception to the payment of shutdown allowance.

❍ In the Case of a Shutdown to Prevent the Spread of Infectious Diseases:
If a workplace is temporarily closed to prevent the spread of infectious diseases in accordance with legal and government directives, this may be considered an exception to the payment of shutdown allowance.

❍ In the Case of a Shutdown Due to a Shortage of Raw Materials Caused by the Spread of the Coronavirus:
In the event of a shutdown due to a shortage of raw materials, shutdown allowances should be paid. However, if the extended shutdown poses a significant impediment to business, approval from the Labor Committee may be obtained to forego paying the shutdown allowance (Article 46, Paragraph 2 of the Labor Standards Act).
■ Legal Criteria for Paid Leave
According to Article 46 (Paid Leave) of the Labor Standards Act, if an employee takes leave due to the employer's fault, the employer must pay the employee a leave allowance of at least 70% of the average wage during the leave period. However, if this amount exceeds the usual wage, the employer may pay the usual wage as a leave allowance. If a business cannot continue due to unavoidable circumstances and has received approval from the labor committee, the employer may pay an allowance that falls short of the statutory leave allowance. The regulations for paid leave under the Labor Standards Act apply to all businesses or workplaces that employ five or more regular employees and not to businesses with fewer than five regular employees. Those who violate the regulations for paid leave compensation are subject to a fine of up to KRW 30 million or imprisonment for up to three years in order to ensure the effectiveness of the paid leave compensation system.
The purpose of the paid leave system is to guarantee the right to survival of employees by providing them with a leave allowance during the period when they cannot work due to the employer's fault rather than the fault of the employees themselves. However, if employers are forced to pay leave allowances even when they cannot continue their business due to unavoidable circumstances, it can place an excessive burden on them, causing significant damage to the company's operations and even promoting bankruptcy. Therefore, there are reduction provisions in paid leave compensation. Lim Jong-ryul, Labor Law 17th Edition, Parkyoungsa, 2019, p. 422; Myeong-Hyeon Jung, The duality of the legal nature of the shutdown allowance, Justice 147, Korea Law Institute, 2015.4. page 253.

'Leave' refers to cases where an employee is unable to provide labor contrary to their intention under a labor contract, even though they had the intention to provide labor. Supreme Court ruling 2012.10.11. 2012da12870 Decision.
The Civil Law stipulates that if an employee cannot perform labor due to an uncontrollable reason that is not the employer's fault, the employee is not held responsible. Civil Act Article 537 [Principle of Debtor Bearing Risk] If an obligation of one of the parties to a bilateral contract becomes impossible to perform due to reasons not attributable to either party, the obligor may not demand performance from the other party.
However, if an employee cannot perform labor due to the employer's fault, the employee can claim the full amount of wages instead of a leave allowance. In this case, the Civil Law doctrine of risk burden applies because it is difficult to prove the employer's intention or negligence. Labor Law Practice Research Society, Highlights of the Labor Standards Act (III), 2nd Edition, Park Youngsa, 21020, page 121.


■ Conditions and Scale of Payment for Leave Allowance
The following are the conditions for the payment of the leave allowance. Firstly, there must be a reason attributable to the Employer. The Employer's attributable reasons refer to all reasons that may arise within the Employer's jurisdiction.
Secondly, the leave must not be caused by force majeure. Force majeure refers to reasons for leave that occur outside the Employer's jurisdiction, such as natural disasters, war, large-scale power outages in the region, and the spread of large-scale infectious diseases.
Thirdly, leave must be assumed to have been taken. A leave can be a complete or partial break.

❍ Full Payment of Wages
In cases where the Employer's intentional or negligent actions result in a work stoppage, the entire wage must be paid. This includes situations such as a legitimate waiting order without reason, a mandatory leave of absence, or unfair dismissal. This is in accordance with Article 538, Paragraph 1 of the Civil Code, which states that if a worker is on leave due to the Employer's illegal conduct, they must receive 100% of their wages rather than a leave allowance. However, according to Article 538, Paragraph 2 of the Civil Code, intermediate profits may be deducted. Supreme Court ruling 1991. 6. 28. 90dakka25277 Decision (Compensation)

Firstly, when the Employer's unfair dismissal is invalidated or canceled, the worker's position as an employee continues, and the worker's failure to provide labor during that time is due to the Employer's fault. Therefore, if the worker continues to work under Article 538, Paragraph 1 of the Civil Code, they may claim full payment of the wages they would have received. Supreme Court ruling 1981. 12. 22. 81da626 Decision

Secondly, if it is determined that the Employer's suspension of vehicle operations (dispatch suspension) for the worker is unjustified, the Employer's fault in not being able to provide labor must be acknowledged, and the leave allowance specified in Article 46 of the Labor Standards Act must be paid. However, in cases where the Employer's intentional or negligent conduct is recognized as the reason for not providing labor, the right to claim full payment of wages under Article 538, Paragraph 1 of the Civil Code also arises. Administrative Analysis: Wage and Working Hour Policy Team-711, 2006.3.29


❍ Payment of Shutdown Allowance
If an employee takes leave due to the employer's fault, the employer must pay a shutdown allowance of at least 70% of the average wage. The employer's fault generally refers to a work stoppage caused by financial difficulties resulting from management problems within the employer's control, such as a lack of funds or raw materials, a decrease in orders, a market downturn, a reduction in production volume due to management difficulties at the parent company, or a shortage of raw materials or funds at subcontracting factories due to a shortened operating period. Administrative Interpretation: Labor Standards Act 68207-106, 1999.9.21; Wage and Working Hour Policy Team-711, 2006.3.29.
In cases where only part of the workplace is closed or where a portion of the working hours per day are reduced, a partial shutdown allowance should be paid. Ministry of Employment and Labor Administrative Interpretation: Criteria for shutdown Allowance System, Labor Standards Act-387, February 13, 2009.)
For example, if a subcontractor stops working due to a work stoppage order from the main contractor, it cannot be claimed as a force majeure reason, and the employer has an obligation to pay a shutdown allowance to the employee. Supreme Court ruling 2019.9.10. 2019Do9604 Decision

In the case where workers belonging to subcontractors are unable to provide work due to restricted access due to the removal of hazardous chemicals by the prime contractor, it is difficult to view it as a force majeure reason beyond the scope of the employer's power. Administrative Interpretation: Labor Standards Policy Division-3535, 2018.5.30.


❍ Reduction of shutdown allowance
The reduction of the shutdown allowance can only be made and approved by the labor commission in cases where it is impossible to continue business due to inevitable reasons, even if it is attributable to the employer's fault. This is applicable even
in cases where the employer's fault is acknowledged and the damage is estimated to be significant enough to lead to bankruptcy, allowing for the payment of reduced shutdown allowance that is less than the statutory shutdown allowance.
The requirements for reduction of shutdown allowances include ① that business continuation is impossible due to unavoidable reasons as a practical requirement, and ② approval from the Labor Relations Commission as a procedural requirement. Even if business continuation is impossible due to unavoidable reasons, if approval from the Labor Relations Commission is not met and procedural requirements are not met, the payment of shutdown allowance cannot be waived or reduced. Supreme Court ruling 1968.9.17. 68nu151 Decision

The level of reduction for shutdown allowance is up to 70% of the average wage and may also be reduced in full. The following are examples of cases where the shutdown allowance was reduced: Supreme Court ruling 2000. 11. 24. 99du4280.

First, a company closed its factory in Bupyeong due to a significant drop in sales for more than three months after the Mandu wave, and an increase in inventory, leading to difficulties in management. It was acknowledged that the company had to let go of approximately 80 employees due to these difficulties, and it was deemed impossible to continue the business under normal circumstances unless consumer trust was restored. Therefore, it was determined that the company met the criteria for reducing the shutdown allowance (Incheon Labor Commission, Case No. 04huup1).
Second, a company was experiencing cumulative deficits even after the commencement of the bankruptcy proceedings, and there were no alternatives available for normalizing management, leading to the pursuit of a company sale, which also did not yield results. In such cases, the inevitable shutdown status meets the criteria for reducing the shutdown allowance (Incheon Labor Commission, Case No. 00huup1).
Third, in cases where the company faces an urgent management situation due to an unknown fire incident that led to bankruptcy, the employer cannot avoid reducing the shutdown allowance due to the inevitable force majeure as an Employer (National Labor Commission, Case No. 89huup1).

❍ Unpaid Leave
According to Article 46 of the Labor Standards Act, "employer's attributable reasons" refers to management difficulties that occur within the employer's scope of influence, such as financial difficulties, lack of raw materials, market downturns, etc. In cases where it is impossible for the employer to continue the business due to uncontrollable circumstances such as natural disasters or disasters for which the employer cannot be held responsible, it cannot be considered the employer's attributable reason. Administrative interpretation: Labor Standards Act-802, 2010. 2. 16.

Uncontrollable circumstances, such as natural disasters, are beyond the employer's control and therefore cannot be considered the employer's attributable reasons. In this case, regardless of whether the Labor Committee approves it, there is no obligation to pay unpaid shutdown allowances. Administrative interpretation: Labor Standards Act 68207-598, 2000. 2. 28.

On the other hand, the employer is not obligated to pay unpaid shutdown allowances for unavoidable shutdown periods caused by third-party interference with attendance. Administrative interpretation: Labor Standards Act-2855, 2004. 6. 9.

Uncontrollable circumstances such as natural disasters or disciplinary actions such as honesty, suspension of attendance, absences, or leave due to illness cannot be considered the employer's attributable reasons and therefore cannot be a reason for unpaid shutdown allowances. Im Jong-ryul, Labor Law, 17th Edition, Parkyoungsa, 2019, p. 423.