I'm facing illegal dispatch punishment. How should I respond?

Hello. This is a business specialist attorney at Daeryun Law Firm.

When you are determined to be at risk of illegal dispatch punishment, the most important thing is not the "approach of merely trying to explain the current situation" but "accurately checking the legal structure first."

Illegal dispatch may be recognized when, even if a contracting or service contract is formally concluded, the user business operator is substantively directly directing and commanding the workers.

The Ministry of Employment and Labor and the courts comprehensively review the following factors.

-Who directly gives work instructions to workers belonging to the outsourcing company

-Who decides the work content, sequence, and method

-Whether the user business operator is involved in attendance management and work evaluation

-Whether the outsourcing company functions as an independent business entity

Therefore, if the user business operator's management and direction has intervened in even some processes, there is room for it to become a problem as illegal dispatch.

If illegal dispatch is recognized, companies may be exposed to the following complex risks.

-Direct employment obligation arising for workers

-Possibility of civil disputes such as worker status confirmation lawsuits

-Criminal punishment or fines for violations of the Dispatch Act and Labor Standards Act

-Need to review existing contracting and outsourcing contracts overall

In particular, if it has been operated in the same structure for a long period rather than a short-term violation, the risk can be further expanded.

At the stage when an investigation related to illegal dispatch begins, the submission of materials and statements may become key elements that determine whether punishment will be imposed in the future.

Companies facing illegal dispatch punishment crisis should respond in the following order.

1. Legal review of the current outsourcing/contracting structure

2. Distinguishing processes that may be problematic from those that are not

3. Organization of whether there is a substantive direction and command relationship

4. Review of alternative scenarios such as future direct employment and structural improvement

If you face an illegal dispatch punishment crisis, I recommend that you prepare a response strategy in the direction that is least burdensome for the company through professional legal advice from the early stage of the investigation.

Our firm provides advice on overall corporate labor matters including illegal dispatch punishment and revisions to the Yellow Envelope Act.