Section 1: Parties and Need for Remedy
Chapter 2: Employer
1. Determination of the Existence of Employer Status under the Labor Standards Act
1.1 Concept of a Person Responsible for Business Management and Criteria for determining His(Her) Employer Status
| Supreme Court Decision on April 10, 2008, Case 2007do1199 | |||||
| * Defendant: Defendant
* Appellant: Defendant 1. Facts: a. Dongguk University Medical Center oversees various hospitals, including Gyeongju Oriental Hospital and Pohang Hospital. Although each hospital is generally managed by its respective director, the defendant, as the director of Dongguk University Medical Center, represented the medical center and, under the directive of the university's president, oversaw the overall operations of each hospital and institution within the medical center, directing and supervising the faculty and staff. b. The medical center was responsible for managing the annual comprehensive budget, including the total budget of each hospital, auditing performance against the budget, and controlling unbudgeted or excess spending. The center also managed the financial status of each hospital. When hospitals faced financial difficulties, the center facilitated financial support by arranging loans from other hospitals or securing funds from the corporation. For example, around June 2005, the center approved an interbank transaction that allowed Gyeongju Oriental Hospital to borrow funds from Gyeongju Hospital to cover payroll expenses. c. Each hospital under the medical center operated on an independent accounting basis, with the respective hospital directors having the authority to pay salaries to their employees as part of their decision-making responsibilities. d. Despite being a party to the collective bargaining agreement and having the authority to manage and control the operations of subsidiary hospitals such as Gyeongju Hospital, the defendant, as the director of the medical center, failed to take any action upon receiving a correction request from the union to change the break times as specified in the collective bargaining agreement without the employees' consent. The break times were changed and implemented after the defendant instructed compliance with the changes. 2. Court Judgment: a. Former Article 15 of the Labor Standards Act (amended in full by Law No. 8372 on April 11,2007) defines an "employer" as the business owner, business manager, or anyone acting on behalf of the business owner concerning employee related matters. A "business manager" is someone responsible for general business management and who has been comprehensively delegated by the business owner to represent or act on behalf of the business externally. The expansion of the definition of "employer" in the Labor Standards Act to include business managers was a policy consideration to ensure the effectiveness of each provision in the workplace. A business manager typically carries the authority and responsibility for general business management and is institutionally given the authority and responsibility to enforce the provisions of the Labor Standards Act by related laws. b. The director of the university medical center, who represents the medical center, oversees the overall operations of each hospital and institution within it, and manages tasks such as the annual comprehensive budget and financial status of each hospital, is considered an "employer" under former Article 15 of the Labor Standards Act, even though each hospital operates on an independent accounting basis and the hospital directors pay salaries to their employees as part of their decision-making responsibilities. c. Therefore, the appellate court judged the defendant to be the "employer" under Article 15 of the former Labor Standards Act in relation to the employees of Gyeongju Oriental Hospital and others under the medical center, finding the defendant culpable for violations of the Labor Standards Act due to unpaid wages and breaches of the collective bargaining agreement. The appellate court's judgment is correct, and there are no errors in the facts or misinterpretations of legal principles as argued. |
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