In the Subject Ruling, the court determined that up to 11 days of annual leave are granted to any worker who has signed a one-year fixed-term employment contract. So far, the Ministry of Employment and Labor took the position that the allowance for paid leave not taken for up to 26 days should be paid when the contract term of a one-year fixed-term worker expires. But the Subject Ruling made different judgment, resolving the continuing dispute as to the number of days of annual paid leave for one-year fixed-term workers.

I. Fact Relations

Plaintiff is an employer who operates a nursing facility for the elderly in Uijeongbu, and Defendant A is a worker who worked as a caregiver at the nursing facility for the elderly operated by the Plaintiff for one year from August 1, 2017 to July 31, 2018. Defendant A retired after using 15 days of annual paid leave for one year.

Around June of 2018, Jungbu Regional Employment and Labor Administration Uijeongbu Branch under Defendant Republic of Korea (hereinafter the “Uijeongbu Labor Administration”) distributed an Explanatory Material for the Revised Labor Standards Act issued by Defendant Republic of Korea (Ministry of Employment and Labor) in a meeting with representatives of local workplaces and trained them that “the amended Labor Standards Act increased the number of annual paid leave from 15 days to 26 days and this amendment must be thoroughly implemented and anyone who violates this will face criminal punishment.”

Defendant A submitted a petition to the Uijeongbu Labor Administration in August 2018 after retirement, seeking payment of 11 days' worth of allowance for annual leave not taken against the Plaintiff and accordingly, the Plaintiff got under investigation by labor inspector of the Uijeongbu Labor Administration. At the time, the labor inspector suggested above-mentioned Explanatory Material for the Revised Labor Standards Act, saying that since the number of annual leave has been increased to 26 days, your act of not paying an allowance for the remaining 11 days of annual leave would be a violation of the Labor Standards Act. In the end, the Plaintiff had to pay Defendant A the 11 days' worth of allowance for annual leave not taken.

However, the Plaintiff filed a litigation in the present case to get back the payment of the 11 days' worth of allowance for annual leave not taken jointly by Defendant Republic of Korea, as a compensation for damages caused by illegal act and Defendant A, as a return of unfair profit, by asserting that the number of annual paid leave stipulated in the labor contract signed between the Plaintiff and Defendant A was 15 days in accordance with then Labor Standards Act and Defendant A used all of them, so there was no more annual leave allowance payable by the Plaintiff to Defendant A but Defendant Republic of Korea damaged the Plaintiff by making and enforcing the Explanatory Material for the Revised Labor Standards Act which stated that the maximum number of paid leave days for working for up to one year is 26 days.

Read about Supreme Court Decision here

Above was an article originally contributed by Attorney Si-Won Lee to the e-Economy and Management Policy Report.