Section 1: Parties and Need for Remedy
Chapter 3: Entity Eligible for Remedy and Need for Remedy, etc.
5. Business Closure and Need for Remedy
5.1 Recognition of Need for Remedy in Case of Disguised Business Closure
| Seoul High Court Decision on November 27, 2007, Case 2007nu6009 | |||||
| * Plaintiff, Appellee: A
* Defendant, Appellant: Chairman of the Central Labor Commission * Intervenor Defendant: B Corporation 1. Facts: a. The intervenor company (hereinafter referred to as the "intervenor") originally operated a taxi transportation business in Namgu, Ulsan, with 49 taxis starting from April 1, 2002, implementing a salary system based on full management and performance bonuses through a labor-management agreement. b. While the full management salary system was in place, deficits began to accumulate, and during labor-wage negotiations starting in February 2003, a settlement was not easily reached. Around May 2003, the company proposed self-management to the labor union. c. The labor union of the intervenor, starting around August 20, 2003, signed a self-management contract with the intervenor in the name of union branch president E, specifying that the self-management period would last from August 20, 2003, to April 20, 2005. Under this agreement, the union would manage all of CEO F's shares, paying him a monthly salary of 2 million KRW and 9 million KRW in share fees, with the CEO serving in a non-executive capacity and providing external meeting attendance and advisory on information transfer. d. Later, on March 31, 2005, CEO F and union chairman E agreed that the union would save 500,000 KRW monthly in gas rebates and 400,000 KRW daily in retirement deposits for the CEO, managing all necessary funds for company operations, taking responsibility for all matters arising (this agreement was valid from April 1, 2005, to April 31, 2008), while continuing the union's self-management. e. In October 2005, the intervenor dismissed plaintiff G, a delegate of the labor union, for embezzlement of transportation income, and around July 2006, dismissed delegates H and I for defamation of the CEO and inciting conflicts between labor and management. f. The intervenor moved to J in Namgu, Ulsan, on February 27, 2007, continuing the taxi transport business, with executives such as CEO F, Directors K, L, M, and Auditor N, all family members of F, listed in the corporate registry. g. However, Company C was established on March 29, 2007, using the intervenor's address in Namgu, J, as its headquarters. Union chairman E of the intervenor became CEO, Directors L and M of the intervenor became Directors of C, and Director K of the intervenor was registered as Auditor of C. Before the intervenor's closure on April 13, 2007, the ownership transfer registration of 47 taxis owned by the intervenor to C was completed. h. In name, CEO F and the actual manager E closed the intervenor on April 19, 2007, to block the return of the four dismissed employees, including the plaintiff, who were engaged in a legal dispute over the validity of their dismissals, and thereafter, the intervenor was dissolved. 2. Court Judgment: The defendant argues that since the intervenor company was closed and dissolved after this Case 's retrial judgment, even if the plaintiff's claims are acknowledged, there is no workplace for the plaintiff to return to, rendering remedy practically impossible. Therefore, there is no need for remedy to seek cancellation of this retrial judgment. In response, the plaintiff argues that since the intervenor company performed a sham closure to preemptively block the plaintiff's reinstatement and neutralize the controversy over the unfairness of the dismissal, and since Company C, substantially the same as the intervenor, has taken over the intervenor's human and material resources to continue the transport business, there still exists a need for remedy to seek cancellation of this retrial judgment. If a business is closed, but the closure is a sham intended to counteract the claims of unfair dismissal by employees seeking to return to the company, it is reasonable for such employees to still seek cancellation of the Central Labor Commission's retrial judgment dismissing their unfair dismissal remedy application, despite the original business's closure. |
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| Download : 서울고법 2007누6009.pdf | |||||
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