JIPYONG LLC

[Case No. Supreme Court decision 2019da279283 on February 27, 2020]

This is a case in which the employer implemented the measure to urge the employee to use the annual paid leave yet the employee showed up for work on the designated day of leave and provided labor. In this case, the Supreme Court held that, if the employer knew that the employee worked on the day of leave yet (i) did not clearly express intent to refuse the acceptance of work or (ii) instructed the employee to work, the employer should be obliged to compensate for the unused annual leave if in acceptance of work without particular objection.

The plaintiff submitted in writing a plan to use the annual leave for 11 days out of 21 days of remaining annual leave to the defendant on July 8, 2016 in accordance with the system to urge use of annual paid leave. On November 24, 2016, the plaintiff submitted again a modified plan for use of leave to use the leave for 20 days including November 30, 2016, December 1, 2016 and December 5, 2016. However, the plaintiff showed for work and provided labor on all of these 20 days identified on the plan for use of leave including a business trip to the United States from November 30, 2016 to December 5, 2016.

The Supreme Court clarified that the employer was not obliged to compensate for the unused annual leave when the annual leave expired because the employee did not use the leave despite that the employer implemented the measures pursuant to the system of measures to urge employees to take annual paid leave as stipulated under Article 61 of the old Labor Standards Act (prior to the amendment as law no. 15108 on November 28, 2017). However, the Supreme Court added that this non-use of the leave should be by the employee’s voluntary intent.

In case the employee showed up for work on the designated day of leave and provided labor and the employer was aware that the employee worked on the day of leave and yet (i) did not clearly express intent to refuse the acceptance of work or (ii) instructed the employee to work, it could not be deemed that the employee voluntarily intended to not use the leave, unless there were special circumstances. In this case, the employer should assume the obligation to compensator for the leave which was not used by the employee’s provision of the labor.

The Supreme Court deemed that the requirements for exempting the compensation requirement for the unused annual leave under Article 61 of the old Labor Standards Act were not satisfied on the ground that (i) the defendant did not take any measure as provided under Article 61 of the old Labor Standards Act concerning a part of the days of leave of the plaintiff and (ii) the plan for use of leave appeared to have been provided to avoid payment of annual leave allowance considering that the plaintiff showed for work and provided labor on all of the days of annual leave identified on the plan for use of leave and the defendant received the labor by the plaintiff without particular objection. The Supreme Court therefore held that the defendant was obliged to pay the annual leave allowance to the plaintiff.