Supreme Court Confirms Ruling That Monthly Construction Site Fees Are De Facto Wages

The Supreme Court upheld the lower court's ruling that recognized the 'monthly allowance' given separately from wages to tower crane operators by construction companies as de facto wages.

Supreme Court
Photo by Asia Economy DB

The Supreme Court's Second Division (Presiding Justice Lee Dong-won) on the 29th dismissed the appeal without oral argument, confirming the lower court's ruling that dismissed the unjust enrichment claim filed by construction company A against 16 tower crane operators.

The operators drove tower cranes at construction sites managed by A from September 2016 to June 2019, transporting construction equipment and aggregates. At that time, the operators demanded 3 million KRW monthly, combining overtime pay and the monthly allowance, citing industry practice. Company A paid a total of 654 million KRW to them under the name of the monthly allowance. In November 2019, A filed a lawsuit against the operators to recover this money, arguing that there was no obligation to pay a separate monthly allowance and that the payments were forcibly made to prevent construction delays.

Both the first and second trials dismissed A's claim. However, they differed in their judgment on whether A had a 'legal cause' to pay the monthly allowance to the operators. The first trial stated, "Although A knew it had no obligation, it paid the monthly allowance to the operators, so it cannot claim a refund," but regarded the monthly allowance itself as "an unfair practice that should be eradicated." In contrast, the second trial ruled, "The payment of the monthly allowance has been a practice sustained for decades, and for tower crane operators, the monthly allowance effectively has the character of wages as compensation for labor."

It further stated, "It is reasonable to view that an implicit contract was established between the plaintiff and defendants to gift money equivalent to the monthly allowance, and the defendants received the monthly allowance accordingly." Company A appealed the ruling, but the Supreme Court found the lower court's conclusion reasonable and dismissed the appeal.

However, the Supreme Court did not make a clear ruling that the 'monthly allowance is wages.' The dismissal without oral argument is a procedure under the Act on Special Cases Concerning the Trial of Appeals, where the Supreme Court dismisses an appeal and affirms the lower court's ruling without adding separate reasons unless there is a significant legal violation or other special reasons.

Nonetheless, since the Supreme Court acknowledged as reasonable the judgment that the monthly allowance was not an unjust enrichment obtained by the tower crane operators, it may influence future police investigations and other matters.

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