The Supreme Court recently rendered a decision (Supreme Court Decision 2020Do15393, December 7, 2023, the “Decision”) that stands in contrast to the position taken by the Ministry of Employment and Labor (the “MOEL”) with respect to the criteria for determining whether a company has violated the overtime rules under the Labor Standards Act (the “LSA”). Accordingly, the MOEL amended the existing administrative interpretation in accordance with the Decision, and the National Assembly proposed a partial amendment to the LSA to set forth the limit on daily working hours.
In this case, where the employer was criminally indicted for alleged violations of Article 53 (1) of the LSA (i.e., resulting from allegations of employees working beyond the 12-hour weekly overtime limit), the district court and appeals court made their determinations based on whether the sum of working hours exceeding eight hours per day went beyond the 12-hour overtime limit per week. This interpretation was consistent with the MOEL’s previous interpretation and thus, a company could be deemed to have violated the overtime limit under the LSA even if the total weekly working hours were within the limit of 52 working hours per week.
Notwithstanding, the Decision focused on determining whether there was a violation of the 12-hour weekly overtime limit by looking at the number of hours worked exceeding the total 40 weekly working hours, regardless of whether the working hours exceeded eight hours per day.
Please refer to the following chart illustrating the differences between the MOEL (and the lower courts’ decisions) versus the Decision by the Supreme Court.
|
Item |
One week |
Determining Violation of Overtime Work Limit |
||||||
|
Day |
Mon. |
Tue. |
Wed. |
Thu. |
Fri. |
Sat. |
Sun. |
|
|
Actual Working Hours |
15 |
- |
15 |
- |
15 |
- |
- |
|
|
MOEL / Lower Courts |
Calculation of Overtime Working Hours: 21 hours [(15-8) + (15-8) + (15-8), which is the sum of overtime work hours exceeding the standard eight working hours per day on Monday, Wednesday and Friday, respectively] |
Violation (since 21 overtime hours is beyond the 12 overtime hours per week permitted) |
||||||
|
Supreme Court |
Calculation of Overtime Working Hours: Five hours [(15+15+15) minus 40 standard weekly working hours, which is the sum of total working hours per week (45) minus 40 hours] |
No violation (since five hours is within the 12 hours of permitted overtime hours per week) |
||||||
The grounds for the Decision are as follows:
|
(i) |
Article 53 (1) of the LSA only limits overtime work to 12 hours per week; |
|
(ii) |
The criteria for overtime work hours under Articles 56 (1) and 53 (1) of the LSA are not required to be treated in the same manner; and |
|
(iii) |
In a case involving criminal liability for a violation of the weekly overtime limit, the courts consider a need to strictly interpret the wording as it involves criminal liability. |
However, apart from criminal liability for allowing employees to work for more than 52 hours a week, an employer is obligated to pay the overtime work allowances to employees amounting to at least 50/100 of their ordinary wages for extended work (Article 56 (1) of the LSA).
In light of the above, the MOEL recently announced through a press release that it will amend its administrative interpretation and apply the new interpretation set forth by the Decision to cases currently under investigation/supervision.
The Decision is very meaningful as it is the first ruling under which the standard for determining whether an employer has violated the LSA’s limit on overtime hours is based on the 52-hour weekly working hour system, which can result in more flexibility for employers with regards to working hours. On the other hand, there are some concerns within the labor community that such interpretation will infringe upon the health of workers. Accordingly, the MOEL announced its plan to closely monitor the situation to protect workers’ right to health.
