Supreme Court: "No Wage Entitlement Without Actual Work, Even With Signed Labor Contract"

The Core Requirement for Wage Claims: "Actual Work Performed"
Supreme Court Overturns and Remands Lower Court Decision

Yonhap News

Even if a labor contract has been signed, the Supreme Court has ruled that an employee cannot demand wages from an employer if no actual work was performed. This ruling clarifies that wages are compensation for providing work, and that “actual work performed” is an essential condition for the right to claim wages.

According to the legal community on May 11, the Supreme Court’s Third Division (Presiding Justice Lee Heung-gu) overturned the lower court’s decision, which had ruled in favor of Song, the former Secretary-General of Iksan YMCA, in his wage claim lawsuit against former chairpersons of Iksan YMCA, and remanded the case to the Jeonju District Court.

In 2010, Song entered into a 13-year long-term labor contract with Iksan YMCA, agreeing to receive a basic monthly salary of 2.5 million won and a business expense allowance of 500,000 won. After disputes over unpaid wages, Song filed this lawsuit seeking 96 million won for unpaid wages that accrued from September 2020 to April 2023. In the first and second trials, the courts ruled that as long as a valid labor contract was in place, the defendants were obligated to pay wages regardless of whether Song had actually performed work, and thus ruled in Song’s favor.

However, the Supreme Court’s view was different. The Court stated, “A labor contract is a bilateral agreement in which the employee agrees to provide work to the employer and the employer agrees to pay wages in return. Unless otherwise specifically agreed or customary, the right to claim wages arises only when work is actually provided. If the employee does not provide work, the corresponding right to claim wages does not exist.” The Supreme Court found that the lower court misunderstood the legal principle by recognizing a wage claim based solely on the existence of a labor contract, without examining whether the plaintiff had actually performed work.

The Supreme Court also raised an issue regarding the interpretation of the contract period. According to a “written agreement” prepared by Song and the defendants during a previous wage dispute, both parties agreed to pay overdue wages and set the employment period until December 2021, while withdrawing all legal actions. The Court said, “There is considerable reason to view that the labor contract ended in December 2021, as stipulated in the written agreement.” The Court also held that “the lower court’s judgment was flawed because it misunderstood the legal principles regarding the right to claim wages and the interpretation of dispositional documents, thereby failing to conduct the necessary review and affecting the outcome of the verdict.”

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