The Ordinary-Wage Doctrine Abandoning the Fixedness Requirement and the Burden of Proving Proximate Causation in Industrial Accidents: Reading Three Supreme Court Labour Judgments

Question

This brief uses three judgments to set out two lines of authority. The first is the en banc doctrine that redefined whether regular bonuses subject to an employment-status condition and a working-days condition constitute ordinary wages. The second concerns where the burden lies, under the Industrial Accident Compensation Insurance Act, to prove proximate causation between work and an accident.

The first issue is the question addressed in judgment 2020Da247190: "Do wages subject to an employment-status condition and a working-days condition also constitute ordinary wages?" The second issue is the question addressed in judgment 2023Da302838: "Does a 750% bonus subject to a 15-day working condition constitute ordinary wages?"

The third issue is the question addressed in judgment 2017Du45933: "Where a worker collapsed approximately one month and 25 days after joining the company and died, who bears the burden of proving proximate causation?" All three judgments ask how, on the record, the boundaries of the statutory wording are to be distinguished from the substantive factors of assessment.

Material to check

First (2020Da247190), this decision addresses whether fixity may be excluded from the conceptual indicia of ordinary wages, whether wages and performance-based bonuses subject to a requirement of continued employment or a workday-count condition constitute ordinary wages, and the scope of application of the new legal principle. On the record, it examines the timing of payment and the persons entitled to payment as prescribed by the ex ante regulation of wage payment, to determine whether the wages fall within "wages agreed to be paid regularly and uniformly as consideration for scheduled work." In addition, it compares the payment regulations with the actual details of payment to determine whether the payment requirements attaching to the requirement of continued employment, the workday-count condition, and work performance are those for which the standard is that the wages "constitute ordinary wages regardless of the existence or attainability of any condition added thereto."

Second (2023Da302838), this decision addresses whether fixity may be excluded from the conceptual indicia of ordinary wages, whether wages subject to a workday-count condition constitute ordinary wages, and the scope of application of the new legal principle. On the record, it examines the content of the workday-count condition and its relationship to the number of scheduled workdays, to determine whether it falls within the standard that "where the workday-count condition is set within the number of scheduled workdays, the circumstance that such a condition has been added does not, by that fact alone, negate the status of those wages as ordinary wages." In addition, it compares the payment regulations with the payroll payment records to determine whether, irrespective of the actual number of days attended and of whether the wages were actually received, the wages are "a standard wage set to reflect the value of scheduled work, irrespective of the actual number of days worked or the wages actually received."

Third (2017Du45933), this decision addresses whether the newly enacted Article 37 (1) of the former Industrial Accident Compensation Insurance Act may be viewed as a provision that divides or shifts onto the Korea Workers' Compensation & Welfare Service the burden of proof of adequate causation between work and the accident. It gathers materials concerning the content of the work and the circumstances of the accident to determine whether the requirements of adequate causation are met. It compares the same materials with the regulation of payment requirements to determine whether they fall within the scope that the employee side must prove.

Possible readings

The case of 2020Da247190 raised five issues: the concept of ordinary wages and the criteria for identifying them; whether fixedness may be regarded as a conceptual hallmark of ordinary wages; whether wages lose their character as ordinary wages solely because they are subject to an employment-status condition or a working-days condition; whether performance-based bonuses tied to work results constitute ordinary wages; and the scope of the effect of the new doctrine.

The case of 2023Da302838 raised four issues: the concept of ordinary wages and the criteria for identifying them; whether fixedness may be regarded as a conceptual hallmark of ordinary wages; whether wages lose their character as ordinary wages solely because they are subject to a working-days condition; and the scope of the effect of the new doctrine.

In the case of 2017Du45933, the issue was whether Article 37(1) of the former Industrial Accident Compensation Insurance Act, newly inserted by the 2007 amendment, allocates or shifts to the Korea Workers' Compensation and Welfare Service the burden of proof concerning proximate causation between work and an accident.

What the decisions held

In Supreme Court en banc judgment 2020Da247190 rendered on 19 December 2024, the Court held: "Considering the foregoing requirements comprehensively, it is right to exclude the concept of fixedness presented by the previous precedents from the conceptual hallmarks of ordinary wages." The Supreme Court took the view that fixedness should be removed from the conceptual hallmarks. It applied the following criteria: consistency with statute and the mandatory nature of the rules; reflection of the value of prescribed work and the possibility of calculation in advance; and consistency with policy. Ordinary wages are wages that are determined to be paid regularly and uniformly in consideration of prescribed work. Wages do not lose their character as ordinary wages solely because it is uncertain whether a condition will be fulfilled. The Court stated that being employed is a natural premise of providing prescribed work. A working-days condition that does not exceed the prescribed number of working days likewise does not negate the character of ordinary wages. The Court drew the line at working-days conditions exceeding the prescribed number of working days and at performance bonuses in the pure sense: these lack the character of consideration for prescribed work and are therefore not ordinary wages. The Court limited the new doctrine so that it applies from overtime work, etc. provided after 19 December 2024. It applies retroactively only to the present case and to parallel cases.

In Supreme Court en banc judgment 2023Da302838 rendered on 19 December 2024, the Court held: "This is because ordinary wages are reference wages determined by reflecting the value of prescribed work, irrespective of the number of days actually worked or the wages actually received." Through this judgment, the Court established the definition of ordinary wages as wages determined to be paid regularly and uniformly in consideration of prescribed work. It held that wages determined to be paid regularly and uniformly in consideration of the full provision of prescribed work constitute ordinary wages. This holds irrespective of whether a condition exists or whether it is likely to be fulfilled. A working-days condition that does not exceed the prescribed number of working days does not negate the character of ordinary wages. A condition exceeding that number, however, is excluded as consideration for additional work. The Court stated that fixedness, which has no basis in Article 6(1) of the Enforcement Decree of the Labor Standards Act, cannot serve as a conceptual hallmark. It overruled, to the extent inconsistent with the view of this judgment, the part of the 2013 en banc judgment that used fixedness as a conceptual hallmark in determining whether wages subject to a working-days condition constitute ordinary wages. Previous judgments to the same effect were overruled to the same extent. The new doctrine applies to calculations made after the date of the judgment. It applies retroactively, however, to the present case and to parallel cases pending at that time.

In Supreme Court en banc judgment 2017Du45933 rendered on 9 September 2021, the Court held: "Article 37(1) of the former Industrial Accident Compensation Insurance Act, by prescribing causation in its main text as an affirmative requirement for recognising an occupational accident and by providing in its proviso that such causation means proximate causation, merely makes explicit that, taken as a whole, proximate causation is required in order to recognise an occupational accident; it is not to be interpreted as a provision that shifts the burden of proving proximate causation and allocates to the Service the burden of proving its absence." Through this judgment, the Supreme Court proceeded on the premise that an occupational accident, which is a requirement for the payment of insurance benefits, can be recognised only where proximate causation exists between the work and the accident. The Court stated that the main text of Article 37(1) of the former Industrial Accident Compensation Insurance Act sets out the requirements for recognition, including causation. The proviso confirms that such causation is proximate causation. The Court observed that the 2007 amendment was intended to resolve the controversy over blanket delegation and to clarify the principle of proximate causation. On that basis, the amendment can hardly be regarded as having sought to shift the burden of proof. The Court further held that an interpretation inconsistent with the provisions on pneumoconiosis and resumed medical treatment, and with the structure of other accident-compensation schemes, is difficult to accept. It therefore maintained the existing precedents.

Practical checklist

First, do wages subject to a requirement of continued employment and a workday-count condition also constitute ordinary wages? On the record, in accordance with the standard that "where an employee provides scheduled work in full, wages set to be paid regularly and uniformly as consideration therefor constitute ordinary wages regardless of the existence or attainability of any condition added thereto," the content of the requirement of continued employment and the workday-count condition are compared with the payment regulations to check whether the wages possess the character of consideration for scheduled work, regularity, and uniformity.

Second, does a 750% bonus subject to a 15-day work requirement fall within ordinary wages? On the record, in accordance with the standard that "where such a condition is one that would be met by an employee who provides scheduled work in full, that is, where the workday-count condition is set within the number of scheduled workdays, the circumstance that such a condition has been added does not, by that fact alone, negate the status of those wages as ordinary wages," the content of the workday-count condition is compared with its relationship to the number of scheduled workdays to check whether the wages fall within ordinary wages.

Third, in the death of an employee who collapsed approximately 1 month and 25 days after joining the company, on whom does the burden of proof of adequate causation lie? The materials concerning the content of the work and the circumstances of the accident are compared with the regulation of payment requirements to check the attribution of the burden of proof of adequate causation in accordance with the scope of proof on the employee side.

Glossary

The sequence for reassessing ordinary wages after the abandonment of fixedness (2020Da247190): The Supreme Court took the view that fixedness should be removed from the conceptual hallmarks. It applied the following criteria: consistency with statute and the mandatory nature of the rules; reflection of the value of prescribed work and the possibility of calculation in advance; and consistency with policy. Ordinary wages are wages that are determined to be paid regularly and uniformly in consideration of prescribed work. Wages do not lose their character as ordinary wages solely because it is uncertain whether a condition will be fulfilled. The Court stated that being employed is a natural premise of providing prescribed work. A working-days condition that does not exceed the prescribed number of working days likewise does not negate the character of ordinary wages. The Court drew the line at working-days conditions exceeding the prescribed number of working days and at performance bonuses in the pure sense: these lack the character of consideration for prescribed work and are therefore not ordinary wages. The Court limited the new doctrine so that it applies from overtime work, etc. provided after 19 December 2024. It applies retroactively only to the present case and to parallel cases. The factors of assessment presented include "consideration for prescribed work", "regularity" and "uniformity".

The change in the criteria for ordinary wages in respect of wages subject to a working-days condition (2023Da302838): The Court established the definition of ordinary wages as wages determined to be paid regularly and uniformly in consideration of prescribed work. It held that wages determined to be paid regularly and uniformly in consideration of the full provision of prescribed work constitute ordinary wages. This holds irrespective of whether a condition exists or whether it is likely to be fulfilled. A working-days condition that does not exceed the prescribed number of working days does not negate the character of ordinary wages. A condition exceeding that number, however, is excluded as consideration for additional work. The Court stated that fixedness, which has no basis in Article 6(1) of the Enforcement Decree of the Labor Standards Act, cannot serve as a conceptual hallmark. It overruled, to the extent inconsistent with the view of this judgment, the part of the 2013 en banc judgment that used fixedness as a conceptual hallmark in determining whether wages subject to a working-days condition constitute ordinary wages. Previous judgments to the same effect were overruled to the same extent. The new doctrine applies to calculations made after the date of the judgment. It applies retroactively, however, to the present case and to parallel cases pending at that time. The factors of assessment presented include "consideration for prescribed work", "regularity" and "uniformity".

Where the burden of proving proximate causation for occupational accidents lies following the amendment of the Industrial Accident Compensation Insurance Act (2017Du45933): The Supreme Court proceeded on the premise that an occupational accident, which is a requirement for the payment of insurance benefits, can be recognised only where proximate causation exists between the work and the accident. The Court stated that the main text of Article 37(1) of the former Industrial Accident Compensation Insurance Act sets out the requirements for recognition, including causation. The proviso confirms that such causation is proximate causation. The Court observed that the 2007 amendment was intended to resolve the controversy over blanket delegation and to clarify the principle of proximate causation. On that basis, the amendment can hardly be regarded as having sought to shift the burden of proof. The Court further held that an interpretation inconsistent with the provisions on pneumoconiosis and resumed medical treatment, and with the structure of other accident-compensation schemes, is difficult to accept. It therefore maintained the existing precedents. The factors of assessment presented include "the requirements for the payment of insurance benefits", "the legislative history and legislative purpose" and "the relationship with other accident-compensation schemes".

Sources and limitations

This white paper was prepared solely on the basis of the texts of Article 2 (1) subparagraph 5, Article 6, Article 15, and Article 56 of the Labor Standards Act, Article 6 (1) of the Enforcement Decree of the Labor Standards Act, and Article 5 subparagraph 1 and Article 37 (1) of the Industrial Accident Compensation Insurance Act disclosed on the National Law Information Center, and of the judgments in Supreme Court Decision 2020Da247190 decided December 19, 2024, Supreme Court Decision 2023Da302838 decided December 19, 2024, and Supreme Court Decision 2017Du45933 decided September 9, 2021.

This is an academic research material organizing general legal principles and standards for record review, and is not legal advice on an individual case or an opinion submitted to a court.

Points left open

2020Da247190: Can the value of scheduled work be deducted from the standard wage merely because a condition has been attached?

2023Da302838: If a number of scheduled workdays set apart from the actual state of work is contested as circumventing mandatory provisions, where does the determination of ordinary wages turn?

2017Du45933: With the burden of proof left on the employee side, what further needs to be clarified in a dispute over death caused by excessive work?

When to reconsider

2020Da247190: If records of overtime work and the like after December 19, 2024 and the applicability to the case at hand and parallel cases are confirmed, the new criteria are applied anew.

2023Da302838: This judgment is revisited if the record becomes centered on whether the number of workdays set as a condition exceeds the number of scheduled workdays and whether the agreement circumvents mandatory provisions. If the distinction between the case at hand and parallel cases and the scope of calculations after the date of the pronouncement become issues, they are examined together.

2017Du45933: It is revisited if the text or the scheme of Article 37 (1) of the Industrial Accident Compensation Insurance Act changes.

Statutes referred to

• 근로기준법 제2조 제1항 제5호, 제6조, 제15조, 제56조
• 근로기준법 시행령 제6조 제1항
• 산업재해보상보험법 제5조 제1호, 제37조 제1항

Decisions referred to

• 대법원 2024. 12. 19. 선고 2020다247190 전원합의체 판결 · Decision ledger
• 대법원 2024. 12. 19. 선고 2023다302838 전원합의체 판결 · Decision ledger
• 대법원 2021. 9. 9. 선고 2017두45933 전원합의체 판결 · Decision ledger

Verification status

The cited provisions (Article 2 (1) subparagraph 5, Article 6, Article 15, and Article 56 of the Labor Standards Act; Article 6 (1) of the Enforcement Decree of the Labor Standards Act; Article 5 subparagraph 1 and Article 37 (1) of the Industrial Accident Compensation Insurance Act) and the decisions discussed (Supreme Court Decision 2020Da247190 decided December 19, 2024, Supreme Court Decision 2023Da302838 decided December 19, 2024, and Supreme Court Decision 2017Du45933 decided September 9, 2021) were checked, as of 2026-10-15, against the current statutes on the Korea Legislation Research Institute's National Law Information Center and the full texts of the Supreme Court decisions. This white paper cites only the three decisions stated among the decisions discussed.