Supreme Court: "Total Annual Leave for Employees with 'More than 1 Year and up to 2 Years' is 26 Days"

Court: "11 days worked in the first year, 15 annual leave days accrue from the first day of the second year"

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has ruled that workers who have worked for "more than 1 year and up to 2 years" are entitled to 11 days of annual leave for the first year of work, and from the day after completing the first year, an additional 15 days of annual leave for the second year, making the maximum total annual leave 26 days.

The Supreme Court's Second Division (Presiding Justice Cheon Dae-yeop) on the 7th upheld the lower court's ruling that dismissed the appeal filed by service company A against foundation B in a lawsuit claiming payment of annual leave allowance. Company A had entered into a contract with foundation B from December 28, 2017, to December 31, 2019, under which six security guards employed by A worked at the foundation, and the foundation paid A for security services.

At the end of 2019, when the service contract ended, A claimed approximately 5.02 million won in annual leave allowance for the security guards from January 1, 2018, to December 31, 2018. A did not claim annual leave allowance for the period from January 1, 2019, to December 31, 2019, and the foundation paid the full claimed amount.

The issue arose when one of the security guards filed a complaint with the local labor office in March 2020, alleging that A had not paid the 2019 annual leave allowance. The local labor office issued a corrective order to A to pay about 5.95 million won to five of the security guards, and A paid approximately 5.95 million won to five guards and 1.18 million won to the remaining one, totaling about 7.14 million won in annual leave allowance.

A then demanded payment from the foundation for the 2019 annual leave allowance of about 6.16 million won, which the security guards claimed they had not received. The foundation paid about 4.09 million won for five of the guards but did not pay the annual leave allowance for the one guard whose employment period was one year.

A argued that it was obligated to pay the 2019 annual leave allowance to the security guards according to the service contract but had arbitrarily calculated the allowance and paid only part of it to five guards. Therefore, A filed a lawsuit seeking about 3.04 million won, the difference between the amount paid to the guards and the amount paid by the foundation.

The first trial ruled in favor of A, ordering payment of the unpaid annual leave allowance. However, the second trial held that for a security guard who worked about 1 year and 3 months, the second-year work period (about 3 months) did not meet the "80% of one year" criterion for annual leave under the Labor Standards Act, so there was no obligation to pay annual leave allowance.

However, the Supreme Court ruled that workers who have worked more than one year but less than two years are entitled to 11 days of annual leave for the first year and an additional 15 days of annual leave for the second year from the day after completing the first year. Therefore, the lower court's ruling denying the additional 15 days of annual leave for the security guard who worked about 1 year and 3 months was incorrect.

Nonetheless, the court stated that the lower court's conclusion that security guards with a two-year employment period had used all 15 days of second-year annual leave and thus were not entitled to annual leave allowance was correct. It also noted that the annual leave allowance already paid by the foundation to A was sufficient to cover the amount, so the lower court's error did not affect the final judgment.

This content was produced with the assistance of AI translation services.