Section 1: Parties and Need for Remedy
Chapter 1: Employees
2. Determination of the Existence of Executive's and Internal Subcontractor[so-sa-jang]'s Employee Status under the Labor Standards Act
2.3 Representative Director
| Supreme Court Decision on May 29,2014, Case 2012da98720 (Denial of Employee Status of the CEO) | |||||
| * Plaintiff, Appellant: A
* Defendant, Appellee: B Corporation 1. Facts: a. The plaintiff was employed by ○○○○ International Company as the HR head for the Asia Pacific region and also as the general manager for the Hong Kong, Korea, China, and Singapore branches. A contract appointing the plaintiff as the CEO of the defendant, B Corporation, was drafted on March 19,2007, by authority delegated from the then CEO. b. The contract detailed the plaintiff's duties as CEO of the defendant, along with specific working conditions and compensation. Additionally, Article 29 of the defendant's articles of association states, "The remuneration, bonuses, and other allowances for directors and auditors shall be paid in accordance with the resolution of the general shareholders' meeting. The payment of severance for directors and auditors shall be made according to the company regulations adopted by the resolution of the general shareholders' meeting." c. On May 8,2007, the plaintiff was appointed as a director of the defendant at an extraordinary general meeting of shareholders held at 11:00 AM, and subsequently appointed as the CEO at a board meeting held at 1:00 PM the same day. d. The defendant held regular annual shareholder meetings to decide the total remuneration for directors and auditors for the fiscal year, but did not adopt any employment rule provisions for severance payments for directors or specifically prepare and adopt any severance payment regulations for directors. Also, no resolutions regarding annual leave salary were made at the shareholders' meetings. e. According to the defendant's audit report, the operating and net profits significantly declined during the plaintiff's first year in office, and in his second year, the reduction in personnel costs due to cost-cutting measures such as staff reductions was the primary reason for the decline in operating and net profits. The sales revenue, which had been increasing before the plaintiff's tenure, decreased during his tenure, resulting in negative net sales. Consequently, the defendant dismissed the plaintiff. 2. Court Judgement: a. A corporation's CEO, who externally represents the company and internally executes the company's operations, is not considered an employee under the Labor Standards Act unless there are special circumstances that merely the CEO's position is nominal and he or she is actually performing labor under the direct and individual supervision of the actual manager and is compensated merely for the nature of the labor itself. b. Although the plaintiff, as the CEO of the defendant, represented the company externally and managed its operations internally, and reported to or received approval for some operations from the largest shareholder and a multinational corporation's branch managers or the Asia operations committee, this was merely an abstract and indirect supervision to enhance management efficiency and oversight of multiple local entities, including the defendant. These circumstances alone do not suffice to conclude that the plaintiff provided subordinate labor under the specific direction and supervision of either the defendant or the multinational's Asia operations committee. Thus, the plaintiff does not qualify as an employee under the Labor Standards Act. |
|||||
| Download : 대법 2012다98720.pdf | |||||
|
<<
< 1 >
>>
|
Table of Contents