The Supreme Court ruled that even if an employee has a labor contract, the employer is not obligated to pay wages if the employee did not actually provide labor.
The Supreme Court's Third Division (presiding Justice Lee Heung-gu) said on the 11th that on the 9th it overturned a lower court ruling that had found for the plaintiff in a wage claim lawsuit filed by a person surnamed Song against four people, including a former chair of the board of Iksan YMCA, and sent the case back to the Jeonju District Court.
In Nov. 2010, a person surnamed Song signed a labor contract with a former chair of the board of Iksan YMCA. It stated that Song would work as secretary-general at Iksan YMCA, with the employment period from Dec. of the same year to Dec. 2023. The wages were a monthly base salary of 2.5 million won and 500,000 won in business expenses.
Iksan YMCA failed to pay wages on time, and Song filed a lawsuit seeking 99 million won in back pay from Dec. 2017 to Aug. 2020 against the former chairs. In Dec. 2020, Song and the former chairs signed a commitment to pay the overdue wages, and that Song would remain employed until Dec. 2021. Song then withdrew the suit.
However, the former chairs of Iksan YMCA paid Song only 10 million won, and Song again filed suit seeking the overdue wages. Separately, Song also filed another suit seeking 96 million won in wages overdue from Sept. 2020 to Apr. 2023.
The former chairs argued that Song did not enter into a labor contract with them. They also countered that since Aug. 2017 the organization of Iksan YMCA had collapsed and Song did not provide labor, so they had no obligation to pay wages.
The first trial ordered the former chairs of Iksan YMCA to pay Song 96 million won, finding for the plaintiff. The trial court determined there was no evidence that Song's labor contract was forged, and that actual provision of labor, beyond concluding the labor contract, was not necessary to claim wages. The former chairs appealed, but the second trial dismissed the appeal.
The Supreme Court ruled differently. The court said, "Unless there is a special agreement, a worker's wage claim arises from the provision of labor." It also found there was considerable room to view that the labor contract concluded by Song and the former chairs ended in Dec. 2021, as set out in the commitment signed in connection with the first wage arrears suit.
Accordingly, in the remand proceedings, the Jeonju District Court must reconsider whether Song actually provided labor during the contract period and when the labor contract ended.