Summary
The principle of the relevant precedent is that even a preferential wage creditor must make a lawful demand for distribution, and this chapter separates that principle from exceptional participating status.
2.1The Standard by Which the Path Opens
The qualification to make a demand for distribution is distinguished here from the statutory scope of creditors who actually receive distribution. The strength of a right's priority does not remove the threshold of the procedure. Creditor A asserts a right to preferential payment, but no records remain as to whether a demand for distribution was made. What is asked here in this scene is not the magnitude of the right but the standard by which the channel of this remedy opens. One must first determine whether the party asserting a strong priority stands before the door of the procedure and what is required to open that door.
The court confirmed the principle that even wage claimants holding the right to preferential payment "must make a lawful demand for distribution by the deadline for demands for distribution" (Supreme Court Decision 2015Da204762 decided August 19, 2015). The subject indicated by this wording is the wage claimant holding the right to preferential payment under the Labor Standards Act and other statutes; the act is a lawful demand for distribution in a compulsory execution procedure or a voluntary auction procedure; and the condition is that the demand be made by the deadline for demands for distribution. Here, the deadline for demands for distribution means the statutory cutoff by which a demand for participation may be made.
Joining this wording with the author's distinction separates the stages of judgment. One is the principle that even priority wage claimants require a lawful demand for distribution; the other is the question of exceptional participation status. Because the substantive force of the highest priority cannot be transferred into the satisfaction of procedural participation requirements, these two answer different questions. Thus, the channel of this remedy opens when one has the statutory participation status and the required demand for distribution, and thereafter submits the action and documents matching the objection within the time limit.
The counterargument that workers may find the deadline hard to know is directed at the loss and inconvenience of a claim deserving protection being pushed back owing to a formal omission of a demand for distribution. The result that wage claims sustaining the foundation of one's livelihood are pushed back is in itself grave. But the author answers that the demand for distribution principle cannot be deleted on the ground of the highest priority. Without deleting the principle, that principle is that even priority wage claimants require a lawful demand for distribution, and it is examined separately from exceptional participation status.
In this scene, Creditor A asserts a right to preferential payment, but no records remain as to whether a demand for distribution was made. The timing of the demand and the submission is not confirmed. Where the time of the submission of the demand cannot be confirmed, the question of effectiveness remains undetermined. However, if it is confirmed as an automatic participation right registered before the statutory point in time, exclusion is not confirmed solely on account of the separate omission of a demand for distribution.
What this section permits is the judgment that even priority wage claimants must cross the procedural threshold of a lawful demand for distribution before they can stand at the entrance of this remedy; what it does not permit is the judgment that the threshold disappears by the highest priority alone. Whether the exclusion caused by an omitted demand is confirmed or not depends on the confirmation of the records and status, and that outcome cannot be asserted on the present scene alone.
2.2The Conditions That Block Relief
From the place left by that sentence, the analysis distinguishes the qualification to make a demand for distribution from the statutory scope of creditors who actually receive distribution. In this place of separate examination, what is asked now is simple: Does the obligation to make a demand for distribution disappear for a wage claimant holding the right to preferential payment, and what are the conditions that block the channel of remedy?
Concerning that question, the above judgment confirmed: "As a rule, even a wage claimant holding the right to preferential payment under the Labor Standards Act and other statutes can receive preferential distribution only if he or she makes a lawful demand for distribution by the deadline for demands for distribution in a compulsory execution procedure or a voluntary auction procedure" (Supreme Court Decision 2015Da204762 decided August 19, 2015). The subject indicated by this wording is the wage claimant holding the right to preferential payment under the Labor Standards Act and other statutes; the act required is a lawful demand for distribution; and the point in time is by the deadline for demands for distribution. The condition is the case of seeking preferential distribution in a compulsory execution procedure or a voluntary auction procedure, and the established legal effect is that one may receive preferential distribution. The scope of this wording is limited to the principle of demands for distribution, and it does not address the calculation of the scope of wages.
This wording must be joined with the distinction between qualification and scope drawn above. Asking whether the right to preferential payment exists is a question about the legal status of the claim, and whether, by holding that status, one automatically falls within the statutory scope of creditors who actually receive distribution is a separate judgment. The principle of precedent is, in the latter judgment, that even priority wage claimants require a lawful demand for distribution, and it is kept separate from the question of exceptional participation status. If these two judgments are mixed, it reads as though the requirements of the procedure are excused merely by confirming status, but the established principle runs in the opposite direction.
Workers may find the deadline hard to know, and it feels unjust that a wage claim deserving protection is pushed back owing to a formal omission of a demand for distribution. That loss is real. A creditor who misses the deadline is pushed back from preferential distribution, and even if an objection was filed, if the objection is deemed withdrawn because proof of the filing of the statutory action and the like after the objection was not submitted, that channel is closed as well. Even so, the demand for distribution principle cannot be deleted on the ground of the highest priority. Without erasing the inconvenience pointed out by the counterargument, the boundary that it cannot be answered by erasing the principle remains as it is.
The foregoing condition is the presence or absence of a lawful demand for distribution, and the place left by the scene is a state in which that presence or absence has not been confirmed. If the registration of the right, the deadline for demands for distribution, and the application, distribution table, objection, filing of an action, and stay documents are confirmed, the time of the demand and submission is fixed, but on the basis of this scene alone neither the automatic participation status nor the time of submission can be established. Accordingly, what cannot be adjudicated on the scene remains undetermined.
The conclusion permitted by this section is narrow. Where a creditor required to make a demand for distribution missed the deadline, or where the objection is deemed withdrawn because proof of the filing of the statutory action and the like after the objection was not submitted, if any one of the statutory requirements is not met, the channel of remedy is closed. Here, effectiveness is bound to the stage of the channel for participating in the auction distribution and maintaining the objection, and a lack of data does not immediately mean that no remedy is available. What is not permitted is the conclusion that the demand for distribution is excused by the highest priority alone.
2.3The Boundary That Remains When There Is No Data
Whether even the highest-priority wage claim requires a demand for distribution, and where the boundary lies that cannot be confirmed for lack of data, are the questions remaining this time. At the point where the question of qualification and the question of actual distribution split into two layers, it is revealed which of the two judgments should be assigned the scene in which the very fact that a demand was made is not confirmed. The point that the strength of priority does not substitute for proof of the existence of the demand becomes the starting point for handling this scene.
For this question, the relevant original text nails down, in a single sentence, the relationship between the status of holders of the right to preferential payment and the demand for distribution. Supreme Court Decision 2015Da204762 decided August 19, 2015 holds that even a "wage claimant holding the right to preferential payment under the Labor Standards Act and other statutes" must have "a lawful demand for distribution" precede in the execution procedure. Here, the wage claimant refers to a person asserting the right to preferential payment under the Labor Standards Act and other statutes; the demand for distribution refers to the act of submitting a demand for participation; and "lawfully" refers to the state of following the prescribed procedure. The timing of the demand is bound to the conditions under which the demand validly comes in, and the wording takes the presence or absence of the demand itself as a premise. In a scene where there are no records that a demand was made, arbitrarily filling in the time or manner of the demand goes beyond the scope set by this wording.
Joining this wording with the conclusion of this section makes it clear that confirming the existence of the demand and handling the state in which that confirmation is impossible are separate stages. The principle of precedent is that even priority wage claimants require a lawful demand for distribution, and this principle is handled separately from the question of exceptional participation status. Only after establishing the existence of the demand is the propriety of its timing examined; if the demand itself cannot be confirmed, before moving to the judgment of timing, one is left in a state where the materials of judgment are not specified. This stage's distinction is to leave this unspecified matter undetermined, limited to cases where the automatic participation status or the time of the demand and submission cannot be confirmed. The fact that the priority is high does not become a ground for excusing the requirements of the demand, and the fact that there are no data likewise does not lead to a confirmation that there was no demand.
The counterargument that workers may find the deadline hard to know is directed at the injustice of a creditor deserving protection being pushed back owing to a formal omission of a demand for distribution. Where notice of the deadline is insufficient or the procedure proceeds after the employment relationship has ended, workers may miss the cutoff for the demand, and the result is that the substance of the right to preferential payment is broken. Yet the demand for distribution principle cannot be deleted on the ground of the highest priority. If the principle of the demand is erased, the scope of creditors participating in the distribution is not fixed, and the distribution opportunities of other creditors within the same procedure change. The gap in protection pointed out by the counterargument is left in place, but the way of filling that gap by deleting the principle is not accepted within this scope.
The fact confirmed in the synthetic scene is the single point that Creditor A asserts a right to preferential payment while no records remain as to whether a demand for distribution was made, and the timing of other applications or submissions is not set. Contrasted with the structure in which precedent presupposes the existence of the demand and asks about the propriety of its timing, this scene is placed in a state where the very existence of the demand is not confirmed. Since it has not been determined which of the records necessary for judgment — the registration of the right, the deadline for demands for distribution, and the application, distribution table, objection, filing of an action, and stay documents — remain, and when they were submitted, the time of the demand and submission cannot be established. Whether the automatic participation status even arises is not confirmed by the data either, so whether the condition — that if it is confirmed as an automatic participation right registered before the statutory point in time, exclusion is not confirmed solely on account of the separate omission of a demand for distribution — is satisfied cannot be said on the basis of this scene alone. Accordingly, neither the judgment that exclusion was confirmed for want of a demand nor the judgment that it was maintained because there was a demand is rendered in this scene, and unconfirmed matters remain undetermined.
What is permitted is the conclusion that, where the automatic participation status or the time of submission of the demand cannot be confirmed, matters for which the materials of judgment are not specified are left undetermined, distinguished from an impossibility. Recognizing the establishment of preferential distribution while presuming a demand was made is not permitted, nor is asserting exclusion while presuming that no demand was made. The treatment that turns the state of lacking data into the unavailability of a remedy at once also lies outside this scope, and the channel for participating in the auction distribution and maintaining the objection operates where one has the statutory participation status and the required demand for distribution, and submits the action and documents matching the objection within the time limit. Conversely, where a creditor required to make a demand for distribution missed the deadline, or where the objection is deemed withdrawn because proof of the filing of the statutory action and the like after the objection was not submitted, that channel is blocked; only the difference is confirmed that in the present scene it has not been specified which of the conditions applies. When more clues accumulate that can fix the presence or absence of the demand, this boundary can be drawn again.
2.4The Records Needed for Determination
In such a scene, whether the right to preferential payment was properly grafted into the procedure within the statutory period is not already decided. Where the automatic participation status or the time of the demand and submission cannot be confirmed, the adjudication is left undetermined, and this is distinguished from cases where the remedy is blocked. Thus what is to be determined now is not the priority of the right, but what the records are for procedurally discerning whether that priority remains alive within the auction distribution.
The starting wording of this adjudication is set as follows. Supreme Court Decision 2015Da204762 decided August 19, 2015 declares: "As a rule, one can receive preferential distribution only if one makes a lawful demand for distribution by the deadline for demands for distribution in a compulsory execution procedure or a voluntary auction procedure." Here the subject is the wage claimant holding the right to preferential payment under the Labor Standards Act and other statutes; the act is the demand for distribution in a compulsory execution procedure or a voluntary auction procedure; and the condition is that the demand was lawfully made within the deadline for demands for distribution. This wording sets only the principle of demands for distribution, and is separated from the application, distinction, and evaluation of this section.
What joins this principle with the adjudication criteria is the factual question of the demand. That is, however far ahead in priority a right may stand, if that creditor did not make a demand for participation within the deadline for demands for distribution, the ground for preferential distribution is not established. This section takes the registration of the right, the deadline for demands for distribution, and the application, distribution table, objection, filing of an action, and stay documents as the basis of that adjudication. Where this list is absent, neither whether a demand was made nor whether the timing was right can be confirmed.
Workers may find the deadline hard to know. It is unjust that a claim deserving protection is pushed back owing to a formal omission of a demand for distribution. The loss targeted by this counterargument is the contraction of substantive wage protection, and its value touches the reason why Korean law grants wage claims a right to preferential payment. Even so, the demand for distribution principle cannot be deleted on the ground of the highest priority. So long as this conclusion — that the demand for distribution principle cannot be deleted on the ground of the highest priority — is upheld, the disadvantage pointed out by the counterargument remains as it is.
What is confirmed in the synthetic scene is the fact that Creditor A asserts a right to preferential payment, though no records of a demand for distribution remain. Comparing this fact with the records known as the registration of the right, the deadline for demands for distribution, and the application, distribution table, objection, filing of an action, and stay documents, the necessary adjudication materials are empty. The automatic participation status or the time of the demand and submission is not confirmed either. Thus this scene permits neither the confirmation of the omission of a demand for distribution nor, conversely, the confirmation of an automatic participation right. Whether a demand was made and only the records were lost, or it was never made at all, cannot be discerned on the basis of this scene alone.
What this section permits is the distinction between the demand for distribution principle and the adjudication records; what it does not permit is the conclusion that the demand for distribution principle can be surpassed by the highest priority alone. Conversely, not definitively excluding a creditor merely because there are no records is also within the bounds of this section. An adjudication in which the time of the demand and submission is not confirmed remains undetermined, and this is distinguished from a case where, despite confirmed automatic participation status, the creditor was excluded.
2.5Circumstances That Change the Decision
In this scene, what the court must first confirm is not the eligibility to file a demand for distribution, but the statutory scope of the creditors who actually receive distribution. Whether the person asserting a foremost priority wage claim falls within that scope, and whether the demand was completed by the statutory deadline for filing a demand for participation, are separate determinations. If, without that distinction being settled, the creditor is deemed to have entered the distribution procedure solely by reason of priority, the basis for judgment in the ensuing stages of the distribution table and the objection is shaken. Accordingly, the question at this stage is set not simply as whether the creditor holds a priority right, but as what change, once confirmed, requires the existing stage determination to be overturned.
The provision the court takes as its principle is stated as follows. The actor indicated by this provision is the wage claimant who holds a claim to preferential payment under the Labor Standards Act and related laws. The target act is a lawful demand for distribution in a compulsory execution procedure or a voluntary auction procedure, and the condition is that the demand be completed by the deadline for the demand for distribution. The provision states that preferential distribution may be received when these three elements are all in place. Thus, the mere circumstance that the creditor's claim to preferential payment is substantively recognized cannot be read as exempting the procedural act of a lawful demand for distribution. This provision confirms only the principle of demand for distribution, and does not also settle the calculation of the scope of wages or the requirements for an exceptional participation status.
The point at which this provision connects with the conclusion of this section is precisely this distinction. If the claim to preferential payment determines substantive rank, then a lawful demand for distribution is the procedural requirement determining whether that rank can be exercised within the distribution procedure. If the two are merged into one, the result is that the procedural requirements for demand for distribution are deemed satisfied merely because the priority is high. Such a deeming runs contrary to the principle set by the provision. Conversely, while keeping the two separate, a change condition is added to the effect that, if it is confirmed as an automatic participation right registered before the statutory point in time, exclusion is not made final merely for omission of a separate demand for distribution. This change does not declare the previously discussed blocking determination and effectiveness determination void. It means that, when the confirmed change occurs, the prior stage's blocking and effectiveness determinations are discarded and judgment must be redone from that stage. In other words, while the principle of demand for distribution is maintained, once the condition of an automatic participation status confirmed by registration newly enters, the starting point of judgment changes.
The most persuasive counterargument targets the point that an employee may have difficulty knowing the deadline. If an actual wage claimant is not notified in time of the employer's bankruptcy or the commencement of auction, or misses the period because he does not know what the deadline for demand for distribution is, the result is that a claim deserving protection is pushed back for a merely formal omission of demand for distribution. The substantive protection of foremost priority rank is rendered powerless at the threshold of procedure. This loss is not an abstract inconvenience but reaches directly the concrete right of the employee's wages. Still, the conclusion does not change even without erasing the unfavorable aspects of this counterargument. If the procedural requirements themselves are abolished on account of the strength of the priority, both the predictability inherent in the statutory deadline for demand for distribution and the coherence of the distribution procedure disappear together. The difficulty the counterargument points out is something to be remedied by conditions such as confirmation of an automatic participation status, not something to be resolved by deleting the principle of demand for distribution.
The facts confirmed in the synthetic scene are limited. Faced with the gaps in these records, the court cannot immediately make exclusion final. Where the automatic participation status or the timing of the demand and submission cannot be confirmed, the judgment remains undetermined. If it is confirmed as an automatic participation right registered before the statutory point in time, whether the time of registration and the participation status can be confirmed becomes the pivotal issue. Without that confirmation, values such as year, amount, and period also remain unset and judgment can only be held in abeyance. From the scene alone, the outcome of victory or defeat or the recovery result cannot be asserted.
The conclusion this section permits is clear. Even for a priority wage claimant, it is the principle that a lawful demand for distribution is necessary, and this principle cannot be deleted on the ground of foremost priority rank. Conversely, the conclusion this section does not permit is equally clear. To assert that any creditor is excluded without exception merely because there is no demand-for-distribution record, or to regard the demand-for-distribution requirements as satisfied merely because priority has been confirmed, are judgments other than these. If it is confirmed as an automatic participation right registered before the statutory point in time, exclusion is not made final merely for omission of a separate demand for distribution, and if the designated change is confirmed, the existing blocking and effectiveness determinations are discarded and judgment is redone from the stage. Insufficiency of materials is undetermined and is not immediately irremediable. Whether the channel for participating in auction distribution and maintaining an objection actually works depends on whether the statutory participation status and the required demand for distribution are in place, and whether the matching lawsuit and documents after the objection were submitted within the deadline.
2.6The Strongest Counterargument and the Answer
In a scene where no record remains as to whether creditor A, asserting a foremost priority wage claim, made a demand for distribution, the question is whether, on the strength of the existence of the right to preferential payment alone, he can be regarded as falling within the scope of creditors who actually receive distribution. The question that remains even after separating eligibility from scope is whether the circumstance that the employee had difficulty knowing the deadline for demand for distribution can widen that scope anew.
The source text corresponding to this section discloses the effect of a formal omission on preferential distribution as follows: "Even for a wage claimant who holds a claim to preferential payment under the Labor Standards Act and related laws, it is the principle that preferential distribution may be received only if a lawful demand for distribution is made by the deadline for the demand for distribution in a compulsory execution procedure or a voluntary auction procedure." The actor spoken of here is the wage claimant holding a claim to preferential payment; the act is a lawful demand for distribution by the deadline for the demand for distribution; and the condition is that the demand be furnished in a compulsory execution procedure or a voluntary auction procedure. (Supreme Court Decision 2015Da204762 decided August 19, 2015)
The wording of the above source text and the application of it must be distinguished. What the wording confirms is that a lawful demand for distribution is the principal condition for preferential distribution, and this condition is a procedural requirement distinct from the substantive rank of the claim. What shows why this requirement must be looked at separately is the deadline for the demand for distribution. This deadline means the statutory closing point at which a demand for participation may be made, and whether the demand is furnished by that closing point divides the scope of the creditors who actually receive distribution. Therefore, the circumstance of holding foremost priority rank does not dilute the meaning of this closing point.
The counterargument that an employee may have difficulty knowing the deadline targets the unfairness of the result that a claim deserving protection is pushed back on account of a formal omission of demand for distribution. This counterargument brings to light together the disadvantageous circumstance of an employee without information and the fact that a claim that should be made an object of protection may be pushed back. Even so, the principle of demand for distribution cannot be deleted on the ground of foremost priority rank. The principle merely requires a lawful demand in order to receive preferential distribution; it does not erase the circumstances that made it impossible to satisfy that demand.
The effectiveness of this section is bound to the channel for participating in auction distribution and maintaining an objection. That channel can be regarded as operating in the case where the statutory participation status and the required demand for distribution are furnished, and the matching lawsuit and documents after the objection are submitted within the deadline. Conversely, where a creditor for whom a demand for distribution is required missed the deadline, or where, after the objection, proof of filing of the statutory lawsuit and the like is not submitted and the objection is deemed withdrawn, the channel is blocked. However, where the automatic participation status or the timing of the demand and submission cannot be confirmed, the matter remains undetermined.
The conclusion permitted in this section is that, even for a foremost priority wage claim, it is the principle that, to receive preferential distribution, a lawful demand for distribution must be furnished by the deadline for the demand for distribution, and it does not mean that the principle overrides the demand for protection against formal omissions. The conclusions not permitted are to regard the requirements of the demand as disappearing by priority alone, and to make exclusion final at once against a creditor who missed the deadline.
2.7The Link to the Application and the Dispositive Part
Even if one accepts the premise of the preceding section that the principle of demand for distribution cannot be deleted on the ground of foremost priority rank, a separate door of the procedure that the right holder must pass through before actually receiving distribution remains. In this scene, the assertion of the existence of the right to preferential payment and the performance of the demand for distribution are two different facts. The present question is whether, in the case of a foremost priority wage claim, that threshold disappears together.
On this question, the relevant precedent left clear wording. The actor designated by this wording is the wage claimant holding a claim to preferential payment; the act is a lawful demand for distribution by the deadline for the demand for distribution; and the condition is the enforcement procedure, namely a compulsory execution procedure or a voluntary auction procedure. The result of receiving preferential distribution is established only after such conditions are furnished.
This wording places the rank of the priority right and the requirements of demand for distribution at different stages. The claim to preferential payment is a substantive status determining who may receive payment first for which claim, and the demand for distribution is the procedural act that brings that status into the enforcement procedure. However strong the former may be, the latter is not performed in its stead, and so the relevant precedent establishes the principle that even a priority wage claimant needs a lawful demand for distribution. This principle, however, must be read separately from an exceptional participation status. Where a status of participating in the procedure automatically is separately at issue, that is not a matter to be judged overlapping with the scope of application of this principle.
The counterargument that an employee may have difficulty knowing the deadline is rooted in substantive loss. Since the deadline for demand for distribution is the statutory closing point at which a demand for participation may be made, a creditor who missed that point in time may be pushed back from distribution on account of a formal deficiency, even though the claim is a wage claim deserving protection. For an employee in a position where access to information is difficult, ignorance of the closing point and the formality of the enforcement procedure impose great disadvantage. It is because if the procedural requirements are abolished by the rank of foremost priority alone, the threshold of the principle itself disappears.
In the synthetic scene, creditor A asserts a right to preferential payment, while the records concerning the actual application, distribution table, and objection are left unconfirmed. From this scene alone it cannot be determined whether the creditor kept the deadline or missed it. Unless the automatic participation status or the time of submission of the demand for distribution is confirmed, the judgment remains undetermined. This is merely a test that alters the conditions, not an addition of actual facts.
The conclusion this section permits is the principle that even a priority wage claimant cannot receive preferential distribution without a lawful demand for distribution. Since the same principle is combined with the closing point called the deadline for demand for distribution, the assertion of the priority right alone does not exempt the procedural requirements. The conclusions this section does not permit are the interpretation that regards the existence of foremost priority rank as grounds for deleting the principle of demand for distribution, and a determination that makes final the exclusion or participation of a particular creditor on the basis of unconfirmed records.
2.8The Scope This Section Undertakes
After separating the eligibility to make a demand for distribution from the statutory scope of the creditors who actually receive distribution, the question this section faces is what cases exist in which no distribution is received even though there is a right to preferential payment. In this scene the question whether a foremost priority wage claim also requires a demand for distribution appears as it stands. The threshold of procedure means the formal steps a creditor must take in order to participate in execution or auction. A strong rank only fixes the place once one has entered; it does not carry one over the threshold in one's stead.
The relevant basis states the principle in wording that disregards the form of procedure regardless of the name of the claim to preferential payment. Supreme Court Decision 2015Da204762 decided August 19, 2015 holds that in a compulsory execution procedure or a voluntary auction procedure, preferential distribution is received "only if a lawful demand for distribution is made by the deadline for the demand for distribution." The actor indicated by this wording is the wage claimant who holds a claim to preferential payment under the Labor Standards Act and related laws; the required act is a lawful demand for distribution; and the condition is that the demand be made by the deadline for the demand for distribution. Here, the expression that preferential distribution may be received concerns the effect by which the amount of distribution is determined according to the rank of the claim; it does not mean a status of participating in the procedure automatically. This phrase deals only with the principle of demand for distribution.
Connecting this wording with the distinction drawn earlier makes clear that the attribute of the claim called the claim to preferential payment and the procedural requirement called the demand for distribution belong to different stages. The former is the criterion determining which claim is paid first after the distribution is fixed, while the latter is the procedure for obtaining the qualification to enter upon that distribution itself. The principle of the precedent is that even a priority wage claimant needs a lawful demand for distribution, and it is separated from an exceptional participation status. Even if there are separately cases where a status of participating automatically is recognized by law, that constitutes a separate matter forming an exception to the principle and does not alter the principle itself. If these two are not separated and are lumped together, priority and the qualification for participation are misunderstood as the same thing.
The deadline is the last date on which a demand for distribution can be made, and an employee is often in a position where he cannot attend to the list of creditors or the public notice of the demand for distribution himself. If, after the employer goes bankrupt, he is not guided through the procedure as a creditor, the result may be that he is pushed behind claims ranking after his actual wages for having missed a single document. The counterargument that it is unjust for a claim deserving protection to be pushed back on account of a formal omission of demand for distribution targets that point. The disadvantage the counterargument points out exists, but the reason the principle is maintained is that, if the participation requirements are abolished by priority alone, the entire distribution procedure loses its form.
Contrasting this scene with the settled conditions, creditor A asserts a right to preferential payment, but no record remains that he made a demand by the deadline for the demand for distribution. The demand for distribution must be made by the statutory closing point at which a demand for participation can be made, and the timing of the demand is confirmed by records such as registration of the right and the deadline for demand for distribution, and the application, distribution table, objection, filing of the lawsuit, and stay documents. The mere circumstance that there is no record cannot make it final that no demand was made. If the automatic participation status or the time of submission of the demand cannot be confirmed, this matter remains undetermined. Whether that condition is established must be revealed by the records.
The conclusion this section permits goes no further than that, even for a foremost priority wage claimant, it cannot be asserted categorically that preferential distribution is received without a lawful demand under the principle of demand for distribution. Conversely, it must not be regarded that exclusion is made final immediately merely because there is no demand record. Within the range where the distinction between the participation requirements and priority is maintained, the deadline for demand for distribution and the lawfulness of the demand are matters to be confirmed separately. The success of actual distribution payment or the maintenance of an objection is not a matter this section settles, and remains with materials insufficient.
2.9Application of the Text of the Provisions and the Holdings of Precedents
Having first separated the qualification to file a demand for distribution from the statutory scope of creditors who actually receive distribution, the analysis now asks how the language of the relevant source text applies to the channel for participating in auction distribution and for maintaining objections to that distribution. Accepting as they stand the scope of qualification covered in the preceding section, this stage merely confirms the threshold of the channel prescribed by the language.
The relevant language reads as follows: "As a rule, preferential distribution can be received only if a lawful demand for distribution is filed by the deadline for demands for distribution in a compulsory execution procedure or a voluntary auction procedure" (Supreme Court Decision 2015Da204762 decided August 19, 2015). The subject prescribed by this language is the wage claimant who claims a right to preferential payment under the Labor Standards Act and other laws; the act required is a lawful demand for distribution; and the condition is that the demand must arrive within the deadline for demands for distribution.
When this language is taken as the basis for adjudicating the channel for participating in auction distribution and maintaining objections, its application is confined to the language within the scope of the relevant source text. The boundary operates alongside it: no extension is made to the reasoning of the judgment or to items not addressed. The existence of qualification and the existence of a demand are distinct stages of adjudication. If the former asks whether one holds a right to preferential payment in the background, the latter asks whether one actually stands on the procedural channel. Mixing the two makes the strong rank of the right appear to substitute for the form of the demand, erasing the threshold that the language has drawn. The confirmed source text bears responsibility only for the principle of demands for distribution.
Overlooking the very fact that there is a statutory closing date in the deadline for demands for distribution, and thus allowing a claim that deserves protection despite a formal omission of a demand for distribution to be pushed back in the distribution table, is a substantial loss and an unjust disadvantage to the party. The point this section most strongly repudiates is precisely such an inconvenience and value. The height of rank and the presence or absence of a demand lie on different axes, and if the former is made the ground for the latter, the channel prescribed by the language itself collapses.
Setting this fact against this criterion of adjudication, the assertion of a right to preferential payment is a circumstance at the qualification stage, while the presence or absence of a demand for distribution is a circumstance at the channel stage. The fact that the former has been confirmed alone cannot be taken to mean that the latter is satisfied as well. However, unless the deadline for demands for distribution and the application, the distribution table, the objection, and the filing of the action and stay documents are secured, the non-existence of the demand cannot be confirmed either. The synthetic scene does not confirm the presence or absence of the demand, and the condition that, if confirmed to be an automatic participation right registered before the statutory point in time, exclusion is not confirmed on the ground of omission of a separate demand for distribution alone, also lies outside the present adjudication of this section.
What this section permits goes no further than taking the principle of demands for distribution, as prescribed by the language of the relevant text, as the gateway to preferential payment. It is not permitted to regard that threshold as waived on the strength of a claim of highest priority alone. Nor is it permitted to read the same language as unconditionally excluding all creditors; and transferring the circumstance that the presence or absence of a demand cannot be verified directly into a confirmation of exclusion is likewise not the province of this section. The boundary lies within the scope of application of the language, and unconfirmed facts remain undetermined.
2.10Fine Distinctions Within the Stage
In this scene it is not confirmed what rank his right actually held. The question to be verified now, then, is not how a person holding a strong rank is to be treated at the threshold of the procedure, but what portion is to be separately adjudicated within the channel for participating in auction distribution and maintaining objections.
The excerpted language of Supreme Court Decision 2015Da204762 decided August 19, 2015 provides as follows: "As a rule, preferential payment can be received only if a lawful demand for distribution is filed by the deadline for demands for distribution in a compulsory execution procedure or a voluntary auction procedure." The subject indicated by this language is the wage claimant who holds a right to preferential payment under the Labor Standards Act and other laws; the act is a lawful demand for distribution in a compulsory execution procedure or a voluntary auction procedure; and the condition is that it be made by the deadline for demands for distribution. This section deals only with this principle, and does not address the calculation of the scope of wages or exceptional participation status.
Connecting this language with the conclusion of this section, the principle that a lawful demand for distribution is required even of preferential wage claimants is not erased. At this point, the detailed distinctions within the stage are limited to three conditions: the operating case, the blocked case, and the undetermined case. The operating case is where one possesses the statutory participation status and the necessary demand for distribution and has filed the appropriate action and documents within the period after the objection; the blocked case is where a creditor required to make a demand for distribution missed the deadline, or where, after the objection, the proof of filing of the statutory action and the like was not submitted, so that the objection is deemed withdrawn; and the undetermined case is where the automatic participation status, or the time of the demand and submission, cannot be verified. The reason these distinctions must be drawn is that, even for the same omission of a demand for distribution, the adjudication diverges depending on the cause. The conclusion of this section does not transcend these three conditions.
The strongest counterargument is aimed here: the contention that it is unjust for a claim that deserves protection despite a formal omission of a demand for distribution to be pushed back. The loss that this counterargument points to is the inconvenience of a wage claimant who in substance holds a right to preferential payment being pushed back in order, with the result that the reward of labor cannot be recovered. The loss targeted by the counterargument is left as it is; what is opened up, instead of erasing the principle, is only the direction of addressing it through detailed distinctions within the same section.
Among the facts placed in the synthetic scene, the one relevant to this question is the single point that no record remains as to whether a demand for distribution was made. The scene has not specified which remain among the registration of the right, the deadline for demands for distribution and the application, the distribution table, the objection, and the filing of the action and stay documents. It therefore falls within the case where the time of the demand and submission cannot be verified, and the status of the undetermined case is maintained. Whether this condition is satisfied or not cannot be adjudicated from the scene alone.
The conclusion permitted by this section is not that the principle of demands for distribution is waived for preferential wage claimants as such, but only that the detailed distinctions within the stage are divided into the three conditions of the operating case, the blocked case, and the undetermined case. What is not permitted is a conclusion that deletes the principle itself on the ground of highest priority, or a conclusion that newly creates circumstances outside the three conditions and thereby multiplies the stages of adjudication. Whether there is an automatic participation right remains to be separately verified as a matter of exceptional participation status.
2.11Synthesis of Effectiveness, Blockage, and Undetermination
This precedent's language prescribes the gateway to procedural entry, separately from the source of the right to preferential payment. Accepting the classification of the preceding stage, the analysis separates the substantive rank of the claim from the qualification to participate in the distribution procedure. Creditor A asserts a strong right to preferential payment, but no record of an application for a demand for distribution remains. In such a situation, a criterion of adjudication must be established as to whether the channel was actually opened, whether it was blocked, or whether it remains undetermined until verification. For the strong rank of a right does not remove the threshold of the procedure. The grounds for classification are sought stage by stage, including the timely filing of the action and documents.
The subject of this language is the wage claimant holding a right to preferential payment; the act is the submission of a lawful demand for distribution; and the condition is observance of the closing deadline. Accordingly, the requirement of a demand for distribution is not waived merely because the creditor holds a preferential wage claim of the highest priority.
The language of the precedent and its application are read as distinct. The language declares the principle of demands for distribution, and that principle operates as the condition for judging whether the wage claimant can receive preferential payment. The channel that opens is the case in which two requirements are jointly satisfied. First, one must possess the statutory participation status and the necessary demand for distribution. Second, after the distribution objection, one must file the appropriate action and documents within the period. Since these two stages are distinct gateways, they are not mixed but judged separately.
The inconvenience that a worker may find it difficult to know the deadline is indeed substantial. The pushing back of a claim that deserves protection despite a formal omission of a demand for distribution does not appear to the creditor to be a justifiable result. If it were deleted, the very ground for setting the deadline for demands for distribution as a statutory closing would be shaken. The stronger the substantive rank, the less it can serve as a reason for disregarding the requirements of the procedure, and the existence of the threshold is maintained independently of the size of the right.
In the A-B-C scene, Creditor A asserts a right to preferential payment, yet no record remains of whether a demand for distribution was actually made. This scene cannot verify the automatic participation status, so both the presence or absence of the demand and the time of submission remain undetermined. Even after the confirmed participation status and the necessary demand for distribution have been satisfied, whether the filing periods for the action and documents were observed has not been additionally verified, and so effectiveness cannot be asserted as a certainty.
The conclusion permitted by this section is a conditional distinction. If the participation status, the demand for distribution, and the filing of the action and documents within the period are all verified, the channel is open; if the deadline for demands for distribution was missed, or if, after the objection, the proof of filing of the statutory action and the like was not submitted so that the objection is deemed withdrawn, it is blocked. If the time of the demand or the participation status cannot be verified, it remains undetermined. This distinction is designed to discourage a reading to the effect that creditors without a demand for distribution are all excluded without exception.
2.12Conclusion Carried Over to the Next Section
Examining what loss remains after the deadline for demands for distribution has passed makes clear how far the scope protected by the rank of the right alone extends. In accordance with the result of the preceding stage's separation of the qualification to file a demand for distribution from the statutory scope of creditors who actually receive distribution, the question now becomes what place a priority right that missed the deadline retains in the procedure.
For the present question, the relevant source text states the principle of demands for distribution as follows: "Even in the case of a wage claimant who holds a right to preferential payment under the Labor Standards Act and other laws …… as a rule, preferential payment can be received only if a demand for distribution is made." (Supreme Court Decision 2015Da204762 decided August 19, 2015) The subject spoken of here is the wage claimant holding a right to preferential payment; the act is a lawful demand for distribution by the deadline for demands for distribution; and the condition is the case of seeking preferential payment in a compulsory execution procedure or a voluntary auction procedure.
If, in relation to this language, the priority right and the participation requirements are bundled together, the previously separated question of qualification and the question of the actual scope of distribution become entangled. A right to preferential payment only determines the rank of the claim, whereas a demand for distribution is the act that opens the procedural door by which the claim is placed in the distribution table. Hence the conclusion that the latter is omitted because the former exists is not derived from this language, and this is also why the author keeps the principle and exceptional participation status apart.
A worker may find it difficult to know the deadline. This observation targets the injustice of a wage claim, which deserves protection in a situation of insufficient notice, being pushed back because of a formal omission. Since the purport of setting a high rank and the rules that set the order of the distribution procedure aim at different things, no answer erasing the principle of the one on the strength of the inconvenience of the other is obtained from this language.
Without a record, the time of the demand and submission cannot be verified; accordingly, whether there was an automatic participation status also remains undetermined at present.
The conclusion permitted by this section is narrow. It is confirmed only that even a preferential wage claimant will find it difficult to receive preferential payment if the statutory closing of the participation requirement, namely the deadline for demands for distribution, is not observed, and that this principle cannot be erased on the basis of rank alone. However, so long as the qualification to make a demand and the actual scope of distribution are distinct, treating even rights whose automatic participation status is confirmed as automatically excluded remains outside this scope. Does the absence of a demand for distribution exclude everyone?