CONTENTS
- 1. Confirmation of Employee Status, Overview of the Case and the Lower Court's Determination
- - Confirmation of Employee Status, the Lower Court's Determination
- 2. Confirmation of Employee Status, the Supreme Court's View
- - Supreme Court, Reversal and Remand of the Lower Judgment
- 3. Confirmation of Employee Status, Daeryun's Strategy
1. Confirmation of Employee Status, Overview of the Case and the Lower Court's Determination
In this case, the plaintiffs, who belonged to in-house subcontractors that had entered into contracting-form agreements with the defendant and performed maintenance work at the defendant's automobile research and development facility, sought confirmation of employee status and related relief under the Act on the Protection, etc. of Dispatched Workers.
Confirmation of Employee Status, the Lower Court's Determination
The lower court noted that the contract at issue between the defendant and the subcontractors to which the plaintiffs belonged limited the specific scope of the work handled by the subcontractors.
- ∙ Because the contract at issue included, within the scope of the contracted work, tasks agreed upon between the subcontractor and the defendant, it was difficult to regard the work performed by the plaintiffs at the request of the defendant's employees as work outside the contract;
- ∙ Most of the defendant's employees working at the facility were researchers or technical workers in charge of machinery and equipment management, and the work they performed was distinct from the preventive and inspection work that constituted the plaintiffs' duties;
- ∙ The fact that the plaintiffs obtained confirmation from the defendant's staff after performing their work amounted to no more than confirming that the work had been carried out as scheduled, rather than receiving binding instructions from the defendant;
- For the foregoing reasons, the lower court determined that no worker dispatch relationship could be found to have been established between the plaintiffs and the defendant.
2. Confirmation of Employee Status, the Supreme Court's View
The Supreme Court, however, took a different view regarding the confirmation of employee status.
■ The Standard for Determining Whether a Worker Dispatch Relationship Was Established
The Court made clear that, where an original employer has a worker perform work for the benefit of a third party, whether that legal relationship constitutes worker dispatch governed by the Act on the Protection, etc. of Dispatched Workers is not to be determined by the title or form of the contract attached by the parties.
- - Whether the third party gives, directly or indirectly, substantial direction and command, such as binding instructions concerning the performance of the work itself, to the worker;
- - Whether the worker can be regarded as having been substantially incorporated into the third party's business, such as by forming a single work group with the third party's employees and engaging directly in joint work;
- - Whether the original employer independently exercises decision-making authority over the selection and number of workers to be assigned, their education and training, their work and break times, their leave, and the monitoring of their work attitude;
- - Whether the purpose of the contract is fixed as the performance of work with a specifically limited scope, the work assigned to the worker is distinct from that of the third party's employees, and such work possesses expertise and technical skill;
- - Whether the original employer is equipped with an independent corporate organization or facilities necessary to achieve the purpose of the contract.
- The Court held that the determination must be made according to the substance of the employment relationship on the basis of the foregoing factors.(See Supreme Court, Decision of February 26, 2015, 2010 Da 106436, etc.)
Supreme Court, Reversal and Remand of the Lower Judgment
Setting out the foregoing legal principles, the Supreme Court took note of the fact that, although the defendant had distinguished the content of the work to be handled by its regular employees from that to be handled by the subcontractors' workers, in practice the scope of the work was not clearly separated, and the two also performed joint work at times.
- - The subcontractor hired only the number of personnel corresponding to the standard staffing set by the defendant and could not independently exercise authority over the placement of workers;
- - The defendant directly provided several months of job training to newly hired subcontractor workers;
- - The plaintiffs' work consisted of repeating simple tasks set by the defendant and required no specialized skill, and the subcontractor did not possess the physical facilities necessary to perform the work;
- Taking the various circumstances together, the Court found that there was a strong basis for regarding the plaintiffs and the defendant as having been in a worker dispatch relationship.
- Accordingly, the Court reversed the lower judgment, which had denied a worker dispatch relationship, and remanded the case to the lower court for further hearing and determination.
3. Confirmation of Employee Status, Daeryun's Strategy
This judgment arose from a confirmation of employee status lawsuit brought by 21 workers, in which the first-instance judgment partially in the plaintiffs' favor was set aside and the appellate court ruled against the plaintiffs.
At the time, unlike the many cases that had found in-house subcontracting to be unlawful, this judgment effectively ruled in favor of the principal contractor for what was substantially the first time, and it drew considerable public attention. Following the Supreme Court's judgment on June 17, however, the case now faces a renewed trial.
For the many companies that enter into contracting-form agreements spanning principal and subcontracted processes, the need to reexamine the risks associated with confirmation of employee status has grown. The Labor and Industrial Accident Group of Daeryun Law Firm LLP thoroughly reviews workers' contracts, the content of their work, and related matters, and seeks ways to resolve issues promptly through advance negotiation and mediation before litigation. You are welcome to contact the Labor and Industrial Accident Group at any time.
