Supreme Court: "Failure to Pay Severance Pay Until Extended Date May Result in Criminal Penalty"

The Court: "Cannot be interpreted as excluding user criminal liability"

Even if the employer and the worker agree to extend the payment deadline for severance pay, the Supreme Court has ruled that failure to pay the severance pay by the extended deadline can result in punishment for violating the Retirement Benefits Act.

The Supreme Court's 3rd Division (Presiding Justice Oh Seok-jun) announced on the 3rd that it overturned the lower court's ruling, which acquitted A in part on charges of violating the Retirement Benefits Act, and remanded the case to the Seoul Eastern District Court.

A, who runs a laundry business, was indicted on charges of failing to pay severance pay amounting to about 110 million won to six workers including B in 2021. He was also charged with withholding wages of 3.95 million won. However, A had agreed with B to extend the payment deadline for the severance pay. The Retirement Benefits Act stipulates that if there is an agreement between the employer and the worker, the payment deadline can be extended.

The first trial partially found A guilty and sentenced him to eight months in prison with a two-year probation. Although A did not pay B 29.27 million won in severance pay by the extended payment deadline, the first trial court acquitted him on that count. The second trial also ruled that since A and B agreed to extend the payment deadline within 14 days from the occurrence of the severance pay payment obligation, A was not subject to punishment.

However, the Supreme Court held that the provision allowing the extension of the payment deadline by agreement between the parties is merely a regulation and does not intend to exclude the employer's criminal liability.

The court stated, "The provision only allows the payment deadline to be extended by agreement between the parties and cannot be interpreted as excluding the employer's criminal liability for failing to pay severance pay by the extended deadline. Even if the employer agrees with the worker to extend the payment deadline, failure to pay the severance pay by the extended deadline constitutes a violation of the Retirement Benefits Act."

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