Supreme Court Overturns Ministry of Employment's Interpretation on '1-Week Overtime Limit' Calculation... "Based on Hours Exceeding 40 Hours per Week"

A Supreme Court ruling overturning the Ministry of Employment and Labor's interpretation of the calculation method for the '12 hours per week' overtime work limit, which is allowed if agreed upon by the employer and employee under the Labor Standards Act, is expected to cause significant repercussions.

Until now, the Ministry of Employment and Labor has judged violations of the Labor Standards Act based on whether the total overtime hours exceeding 8 hours per day, summed on a weekly basis, exceeded 12 hours. However, the Supreme Court has for the first time established the standard that the judgment should be based on whether the total working hours exceeding 40 hours per week surpass 12 hours, regardless of whether daily work exceeded 8 hours.

Supreme Court, Seocho-dong, Seoul.

According to the legal community on the 25th, the Supreme Court's Second Division (Presiding Justice Min Yusook) overturned the original ruling that sentenced Lee, the CEO of an aircraft cabin cleaning company, to a fine of 1 million won in the appeal trial for charges of violating the Labor Standards Act and the Employee Retirement Benefit Security Act, and remanded the case to the Seoul Southern District Court.

Lee was indicted for failing to pay retirement allowances and overtime wages to employees on time from 2013 to 2016 and for having employees work overtime exceeding the limit a total of 130 times. The first and second trials found some of Lee's charges guilty and sentenced him to a fine of 1 million won.

The court stated, "Whether the 12-hour weekly overtime limit is exceeded should be judged based on the working hours exceeding 40 hours in a week, not by summing the overtime hours exceeding 8 hours per day," and pointed out, "The lower court judged whether weekly overtime exceeded 12 hours by summing the daily overtime hours exceeding 8 hours for each workday, which contradicts the legal principle stated above."

The court further noted, "In cases such as the third week of April 2014 and two other weeks, it cannot be definitively concluded that the defendant violated the Labor Standards Act's overtime restrictions, yet the lower court found all these charges guilty for the same reason," adding, "This misinterpretation of the law regarding rest periods and the weekly 12-hour overtime limit affected the judgment, which is why the case was overturned and remanded."

The key issue in this trial was how to calculate the weekly overtime hours set at 12 hours under the Labor Standards Act.

Article 50(1) of the Labor Standards Act stipulates that "working hours in one week shall not exceed 40 hours excluding break times." Paragraph 2 of the same article states, "working hours in one day shall not exceed 8 hours excluding break times."

Article 53(1) of the same law regulates that "if agreed upon by the parties, working hours under Article 50 may be extended up to 12 hours per week," setting the weekly overtime limit at 12 hours.

This case applies the Labor Standards Act before its amendment in November 2017, but these two provisions remain the same in the current law.

The lower courts judged that summing the daily working hours exceeding 8 hours during the week and exceeding 12 hours violated Article 53(1) of the Labor Standards Act. This has been the calculation method used by the Ministry of Employment and Labor.

In contrast, the Supreme Court ruled that regardless of whether daily working hours exceeded 8 hours, the violation of the Labor Standards Act should be judged based on whether the working hours exceeding 40 hours per week surpass 12 hours.

For example, if a worker works three days a week?Monday, Wednesday, and Friday?each day working 15 hours including 7 hours of overtime, under the Ministry of Employment and Labor's calculation, the total overtime hours in a week would be 21 hours (7 hours x 3 days = 21 hours), exceeding the legal weekly overtime limit of 12 hours, thus violating the Labor Standards Act.

However, according to the Supreme Court's calculation, the total weekly working hours would be 45 hours (15 hours x 3 days = 45 hours), which does not exceed the statutory weekly working hour limit of 52 hours, so it would not be considered a violation of the Labor Standards Act.

However, applying the Supreme Court's calculation method does not always disadvantage employees. The Supreme Court stated, "Calculating on a weekly basis rather than daily does not always underestimate weekly overtime."

For instance, a worker who works 10 hours a day from Monday to Saturday (6 days a week) would, under the Ministry of Employment and Labor's method, be considered to have worked 2 hours of overtime each day for 6 days, totaling 12 hours of weekly overtime, which does not violate the limit. However, under the Supreme Court's method, the total weekly working hours would be 60 hours, meaning 20 hours (60 hours - 40 hours = 20 hours) of overtime, which would be a violation of the Labor Standards Act.

In this ruling, the court explained, "Article 53(1) of the Labor Standards Act sets a 12-hour weekly overtime limit, so the overtime referred to here naturally means work exceeding the 40-hour weekly standard working hours under Article 50(1) of the same law," and added, "Article 53(1) allows extending the working hours under Article 50, and including the daily 8-hour limit in Article 50(2) means that overtime exceeding 8 hours per day is possible if agreed upon, not that there is a separate regulation limiting daily overtime."

The court further stated, "The pre-amendment Labor Standards Act uses the '12 hours per week' limit as a standard for restricting weekly overtime in flexible or selective working hour systems, but there is no provision regulating the weekly total of daily overtime exceeding 8 hours," and "Article 56 of the Labor Standards Act requires payment of at least 50% additional wages for overtime exceeding 8 hours per day or 40 hours per week. This provision aims to suppress overtime by imposing financial burdens on employers and to compensate employees for the increased fatigue and reduced free time caused by overtime, not to prohibit overtime itself."

It continued, "Conversely, Article 53(1) prohibits overtime exceeding 12 hours per week even if agreed upon and criminally punishes violators, aiming to prohibit overtime exceeding 12 hours per week itself," and concluded, "Therefore, the criteria for determining overtime subject to additional wages and overtime exceeding 12 hours per week do not have to be the same."

In other words, the existence of a provision requiring additional wages for daily overtime exceeding 8 hours does not mean that the calculation of overtime exceeding 12 hours per week must be done by summing daily overtime hours exceeding 8 hours.

A Supreme Court official said, "This is the first Supreme Court ruling on how to calculate the 12-hour weekly overtime limit," and added, "The Supreme Court judged that the method based on working hours exceeding 40 hours per week is reasonable."

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