CONTENTS
- 1. The Story of the Client Who Came to a Labor Law Specialist Attorney
- - The Labor Law Specialist Attorney's Assistance
- - Result of the Labor Law Specialist Attorney's Assistance: Full Dismissal of the Claim for 150 Million Won
- 2. A Lawsuit Claiming Labor Costs, as Explained by a Labor Law Specialist Attorney
- 3. The Labor Law Specialist Attorney's Response Strategy
- - Response Strategy
1. The Story of the Client Who Came to a Labor Law Specialist Attorney
The client who came to a labor law specialist attorney was the representative of a mechanical equipment construction company that performs piping, air-conditioning, sanitary, and heating and cooling facility works.
The client entered into a subcontracting agreement with Company A for the piping and heating and cooling works of a certain building.
Company A then orally re-subcontracted the piping work portion of that project to B (hereinafter the plaintiff), and the plaintiff deployed personnel to carry out the piping work.
After the work was completed, the plaintiff claimed labor costs from Company A, but Company A did not pay the labor costs.
Accordingly, the plaintiff asserted that the client, as the original contractor, was responsible, and claimed 150 million won in labor costs and delay damages.
The client requested the assistance of a labor law specialist attorney in order to defend against the plaintiff's lawsuit claiming labor costs.
The Labor Law Specialist Attorney's Assistance
1) Rebuttal of the Plaintiff's Assertions
The plaintiff asserted that it was appropriate for the client to pay the labor costs, on the basis of “where there is a clear reason that the contractor cannot pay the subcontract price, such as the contractor's bankruptcy, and the ordering party acknowledges this, the subcontract price corresponding to the portion executed by the subcontractor may be paid directly to the subcontractor,” Article 35, Paragraph 2 of the Framework Act on the Construction Industry.
In response, the labor law specialist attorney cited the precedent that held that “absent special circumstances, the ordering party must be regarded as bearing the obligation of direct payment up to the limit of its obligation to pay the price to the contractor,” namely Supreme Court Decision 2017Da242300 rendered on December 13, 2017.
On this basis, the labor law specialist attorney rebutted that since the client had already paid all of the construction price under the contract, the client had no obligation to pay the subcontractor's labor costs on its behalf.
2) Organization and Assertion regarding the Scope of Liability
The labor law specialist attorney made clear that the plaintiff had merely entered into an oral re-subcontracting relationship with Company A and had no direct contractual relationship with the client.
In addition, the attorney emphasized that the client had not been involved in the plaintiff's deployment of personnel or in any agreement to pay labor costs, and that the work had likewise been carried out through Company A.
Accordingly, the attorney emphasized that the matter of the plaintiff's unpaid labor costs was solely a matter between Company A and the plaintiff, and that it was improper to hold the client, the original contractor, responsible.
Result of the Labor Law Specialist Attorney's Assistance: Full Dismissal of the Claim for 150 Million Won
In accordance with the labor law specialist attorney's assistance, the court recognized the following points.
2. That there was no direct contractual relationship regarding the payment of labor costs between the plaintiff and the client
Accordingly, the court rendered a judgment dismissing the plaintiff's claim for 150 million won in labor costs and delay damages.
2. A Lawsuit Claiming Labor Costs, as Explained by a Labor Law Specialist Attorney
A lawsuit claiming labor costs is a civil action that contests a dispute over the payment of labor costs, and it proceeds in accordance with the general civil litigation procedure.
Being subjected to a claim for labor costs does not necessarily mean that they must be paid.
In particular, in construction with a subcontracting structure, who is the party actually obligated to pay the labor costs becomes the most important criterion for judgment.
If the construction price has already been paid in full to the contractor, there are many cases in which the obligation of the ordering party or the original contractor to bear even the subcontractor's labor costs is not recognized.
Q. Labor law specialist attorney, in that case, when must the ordering party or the original contractor pay the labor costs?
A. Where construction price remains payable to the contractor, or where the ordering party has agreed to pay the labor costs directly to the subcontractor, direct payment liability may be recognized.
Therefore, it is important to first confirm whether the construction price has been paid and the content of the contract.
Q. Labor law specialist attorney, if I am subjected to a lawsuit claiming labor costs, what materials should I prepare?
A. It is important to prepare materials that can confirm that the construction price has already been paid, such as the subcontracting agreement concluded with the contractor, the records of construction price payment, and the settlement statement.
These materials become the key basis for contesting liability for the payment of labor costs.
If you are subjected to a lawsuit claiming labor costs, it is important to calmly organize whether the construction price has already been paid, who bears the obligation to pay the labor costs under the structure, and whether a direct contractual relationship exists.
If these points are organized, there is sufficient room to defend against the claim for labor costs.
3. The Labor Law Specialist Attorney's Response Strategy
The labor law specialist attorney organizes the key issues from the early stage of the case and establishes a response strategy in stages.
Response Strategy
1. Organization of the Contract Structure and the Party Obligated to Pay Labor Costs
The labor law specialist attorney reviews the contract structure centering on the contracting and subcontracting relationships and clearly organizes who bears the obligation to pay the labor costs.
Through this, the attorney identifies the scope of liability that the client must bear and sets the direction of the defense logic.
2. Comprehensive Response through In-house Labor Attorney Consultation and the Formation of a TF
Where the calculation of labor costs or the method of deploying personnel becomes an issue, the attorney seeks consultation from an in-house labor attorney to organize the issues related to labor costs.
Where the matter is complex, the firm forms a TF of 1 to 20 persons to respond comprehensively, from analysis of the facts and organization of the issues to the establishment of a response strategy.
3. Securing Key Evidence through Collaboration with the In-house Evidence Investigation Center
The firm systematically collects key evidence, such as payment records, settlement statements, and financial materials, in collaboration with the in-house Evidence Investigation Center.
Through this, the firm prepares to objectively prove that the price has already been paid.
4. Establishment of a Strategy and Response at Each Stage of Trial
In the course of submitting the answer and conducting the pleadings after the complaint is received, the firm organizes arguments tailored to the issues and adjusts the response strategy according to the flow of the trial.
Through this, the firm aims to prevent the unnecessary expansion of the dispute and to achieve a stable defense.
🔗legal consultation reservation If you need one, please review your response direction through a consultation with a labor law specialist attorney from the early stage of the case.
This content is based on actual case studies of Daeryun Law LLC with some adaptations, and the copyright belongs to our firm.
Unauthorized reproduction, duplication, or distribution and other copyright infringements may result in legal action under applicable laws.
