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[Recent Court Case 6] The gathering and protest of the subcontractor’s employees at the contractor’s business premises as part of the action taken in a labor dispute against the subcontractor are a justifiable act not in violation of the social norms.

2020.09.03

[Case No. Supreme Court Decision 2015Do1927 dated Sep. 3, 2020] 
 
In this case, the court found that where the subcontractor’s employees who work at the contractor’s business premises went on a strike against the subcontractor at the contractor’s business premises, such act was justifiable and could not be punished on the grounds of interference with business or refusal to vacate. 
 
The Korea Water Resources Corporation or K-water (“K-water”) entered into a service agreement with a facilities management company (the “Subcontractor”) in 1998 for cleaning services. The defendants (the “Defendants”) are the employees of the Company and members of the Daejeon District K-water Branch of the Korean Public Service and Transport Workers’ Union under the Korean Confederation of Trade Union. When the collective bargaining for wage increase failed in June 2012, the Defendants went on a strike against the Company. In order to leverage for favorable results, the Defendants occupied the main building at the business premises of K-water, where they actually worked, to protest. In response, the Korean Prosecution Service charged the Defendants with interference with business and refusal to vacate. 
 
In this case, the issue was whether the Defendants’ strike at the business premises of K-water would be deemed a justifiable act. The court of first instance found the Defendants guilty and imposed fines ranging from 1.5 to 3 million Korean Won. The appellate court, however, found that “the Defendants’ strike was a justifiable act, and the unlawfulness is precluded” and declared the Defendants innocent. 
 
The Supreme Court also stated that “The Contractor’s business premises are where the Subcontractor’s employees gather and provide work. In this context, it is unavoidable that the employees would engage in the strike or slowdown at the Contractor’s business premises in a labor dispute.” The Supreme Court further stated that “although the Contractor is not in a direct contractual relationship with the subcontractors’ employees, considering the Contractor enjoyed certain benefits from the work provided by the subcontractor’s employees and provided the them with the business premises as the place of work, the Contractor would need to tolerate some infringement of legal interests arising out of the strike that occurs at the business premises in view of the social norms.” In addition, the Supreme Court held that “in an event a valid strike against the Subcontractor, as the employer, takes place at the Contractor’s business premises and infringes the Contractor’s legal interests, it would not be always deemed illegal, as the unlawfulness may be precluded as ‘an action not in violation of the social rules’ as specified by Article 20 of the Criminal Act if the action is an admissible action in light of the spirit of the law and order, or the underlying social ethics or social norms. 
 
In accordance with the foregoing legal principles, the Supreme Court decided that the strike by the Defendants constituted a justifiable act on the grounds that: (i) the strike by the Defendants was intended to achieve a valid purpose of improving the working conditions and economic status of the K-water branch union members; (ii) the Defendants used the means that could be generally used at gatherings or protests to express their collective intentions which continued for a relatively short period of time of three days; (iii) the Defendants did not engage in any violence or destruction of the facilities, or completely and exclusively take over the facilities, thereby not substantially interfering with the business or preventing K-water’s employees from preforming their normal business activities; and (iv) the Defendants needed to use the premises of K-water, the place where they actually provide labor, for the strike in order to effectively exercise the constitutional right to collective action, given that it was practically impossible to exercise the right to collective action at the premises of the Subcontractor. This decision is expected to lead to an increase in the number of protests of the employees of the subcontractor at the business premises of the contractor. There are growing concerns that the method to stop this type of protest at the contractor’s business premises is practically no longer unavailable.

Events [JIPYONG - Mori Hamada & Matsumoto, MDD, and Oppenheim] SEOUL ADR FESTIVAL 2024 - FIRESIDE CHAT WITH CLIENTS 2024.10.10

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