Trade Union and Labor Relations Adjustment Act | Supreme Court Confirms Employee Status, Recognizing a Substitute Driver as an Employee Under the Trade Union Act

This was a lawsuit for confirmation of the non-existence of employee status, in which the standards and method for determining whether a person qualifies as an employee under the Trade Union and Labor Relations Adjustment Act were at issue.

A substitute driving company filed a lawsuit against a substitute driver seeking confirmation of the non-existence of employee status.

The plaintiff, the substitute driving company, brought the lawsuit asserting that the defendant, a substitute driver, did not hold the status of an employee under the Trade Union and Labor Relations Adjustment Act.

The defendant entered into a partnership agreement with the plaintiff and, having been provided by the plaintiff with the program necessary for receiving substitute driving requests and assigning drivers, performed substitute driving work.

In this case, the defendant's dependence on the income, the contents of the partnership agreement, and the driver's right to choose and right to refuse the performance of work became the issues.

Both the court of first instance and the appellate court ruled against the plaintiff. The courts determined that, considering the legislative purpose of the Trade Union Act, the defendant should be recognized as an employee under the Trade Union Act.

The Supreme Court's determination on whether the defendant qualifies as an employee under the Trade Union Act was the same as that of the lower court.

Whether a person qualifies as an employee under the Trade Union Act must be determined by comprehensively considering whether the income of the person providing labor depends mainly on a particular business operator, whether the particular business operator receiving the labor unilaterally determines the contents of the contract concluded with the person providing labor, including remuneration, the degree to which a relationship of direction and supervision exists between the user and the person providing labor, and whether the wages, salary, or other income that the person providing labor receives from the particular business operator constitutes consideration for the provision of labor.

The court stated that, considering the legislative purpose of the Trade Union Act and the provisions defining an employee, whether a person qualifies as an employee under the Trade Union Act must be determined from the standpoint of whether there is a need to guarantee the three labor rights in light of the substance of the labor-provision relationship, and that it is not necessarily limited to employees under the Labor Standards Act.

■ Dependence on Income From the Plaintiff

The Supreme Court determined that the defendant depended on the income earned by carrying out the customer calls assigned to him by the plaintiff.

Considering the contents of the defendant's substitute driving work, the times at which the substitute driving took place, and the time required to perform the work, it appears that the defendant in fact belonged only to the plaintiff and engaged solely in substitute driving work.

■ Determination of the Contract Contents by the Plaintiff

In addition, the plaintiff used a standardized partnership agreement setting out the obligations of the substitute drivers and the fees payable to the company, and concluded the partnership agreement with the defendant on that basis.

The Supreme Court determined that the plaintiff was in a position to unilaterally determine the contents of the contracts it concluded, including the engagement of the substitute drivers.

■ The Relationship of Direction and Supervision Between the Defendant and the Plaintiff

The plaintiff assigned customer calls to the substitute drivers through automatic assignment and priority assignment methods.

It was difficult for the substitute drivers to refuse an assignment, and they had to carry out calls in accordance with the priority assignment conditions presented by the plaintiff.

Because a caution or termination of the contract was possible if the defendant violated the dress code, the matters to be observed in performing work, the obligation to receive training, and other requirements stipulated in the partnership agreement, the court determined that a relationship of direction and supervision existed between the plaintiff and the defendant.

■ Performance of Substitute Driving Work Through the Plaintiff

The substitute driving labor provided by the defendant was essential to the plaintiff's operation of its substitute driving business, and it was practically difficult for the defendant to engage in the substitute driving business without going through a substitute driving company such as the plaintiff.

The Supreme Court viewed the defendant as being exclusively attached to the plaintiff to a considerable degree, to a level recognized under the Trade Union Act.

Setting out the foregoing legal principles, the Supreme Court stated that the legislative purpose of the Trade Union Act and its provisions defining an employee must be determined in light of the substance of the labor-provision relationship, and it ruled that the defendant substitute drivers are employees under the Trade Union Act.

The Trade Union and Labor Relations Adjustment Act is a statute intended to realize the three labor rights guaranteed under the Constitution, and, unlike the Labor Standards Act, it determines the scope of employees with a focus on the substantive dependency of the labor-provision relationship.

In other words, an employee under the Trade Union Act need not necessarily qualify as an employee under the Labor Standards Act, and the determination is made by comprehensively considering the economic and social conditions of the labor-provision relationship.

Litigation relating to the Trade Union Act may involve various issues, such as infringement of the three labor rights, unfair dismissal, and unpaid wages. Each issue may require complex interpretation of legal principles, and resolving such issues calls for specialized knowledge and experience.

The 🔗Labor and Industrial Accident Group of Daeryun Law Firm LLP provides legal advice across all areas of labor law, led by attorneys experienced in labor matters, including experience with the legal affairs and administration team of the Ministry of Employment and Labor.