LABOR LAW GUIDE

Chapter 1 The Structure of Labor Laws in Korea

Section 3: Employee and Employer - Ⅱ. Related labor cases

Ⅱ. Related labor cases

1. Employees

(1) In cases where a person works for an employer in a subordinate relationship which takes the form of subcontracting, the person is an employee under the LSA.
If a person agrees to provide only a certain type of labor to a business or workplace of a contractor-employer while remaining in a subordinate employment relationship, and to receive payment according to results of the work done, or performance, the person also becomes an employee as defined in Article 2 of the LSA, even when the contract has taken the form of subcontracting .

(2) When a director of a company is engaged in a given type of work and gets paid for such work by the employer, as well as performing the mandated job of handling business management, it is possible to classify him/her as an employee under the LSA.
The LSA defines an employee as a person who provides labor for an employer and receives payment in return for the work done. Accordingly, in cases where a director is engaged in a certain type of work and gets paid for such work, in addition to performing the mandated executive job, the director can be deemed an employee as defined in the LSA.
(3)A person who provides a specific service under the direction and supervision of others, such as directors, and who receives fixed pay as remuneration can be regarded as an employee defined by the Labor Standards Act.
Whether it is appropriate to regard a director as an employee defined by the Labor Standards Act has nothing to do with the manner in which the contract is made but whether the director was paid to provide a service that requires him to be subordinate to another. Such a director can be regarded as an employee regardless of whether he/she is holding the position or title of a company director or auditor, in the real sense or just in name, as long as he/she receives remuneration as compensation for providing a specific labor service under the direction and supervision of the employer or he/she receives remuneration as compensation for taking charge of a specific labor service under the direction and supervision of persons such as the representative director in addition to the duties assigned to him/her by the company.

(4) The Supreme Court ruled that native English instructors working for “C” Language Institute are employees rather than freelancers, and are entitled to severance pay, annual paid leave allowance, and weekly holiday allowance.
The main point of this case was whether native instructors are employees or freelancers. The courts used the legal criteria for determining whether someone is an employee or not in their judgment. However, the Defendant claimed that the Plaintiffs ① signed an ‘Agreement for Teaching Services’ voluntarily, not an employment agreement, and also paid business taxes; ② that the Defendant paid remarkably high benefits in consideration of there being no severance pay; and ③ that, as the Plaintiffs agreed that this agreement would not include severance pay, if the Plaintiffs requested additional severance pay, it would be a violation of the good-faith principle.

(5) Election offices and election campaign staff for a lawmaker are respectively considered workplaces and employees under the Labor Standards Act
The scope of application in the Labor Standards Act(Article 11) regulates, “This Act shall apply to all businesses or workplaces in which five or more workers are ordinarily employed.” Workplace refers to designated workplaces or parts of a business implemented to do all kinds of continuous work as activities under a systematically organized body. The Labor Standards Act applies to this kind of workplace, even though it is a one-time business or operates only temporarily, without limitations to the type of business nor whether it is for profit or a non-profit organization. As Article 2 of the Labor Standards Act does not stipulate the specific kinds of work an employee is engaged in, work for a political body belongs to a business, workplace, or a job, as defined by the Labor Standards Act.
A candidate set up an election office to organize his campaign, hired people to be paid on a daily basis, had them participate in election campaigning under his command and supervision, and required their work for a period of time(13 days). In this case, this operation shall be considered as a workplace as stipulated by the Labor Standards Act(Article 11). Although the election campaign staff were designated for and registered with the National Election Commission, if they had an agreement with the candidate to be paid a daily wage and they provided contractual labor service under the candidate’s direction and supervision, they are considered employees under the Labor Standards Act.

2. Employer

(1) Executive officials are not employees as defined in the LSA.
Executive officials, including directors, are mandated by their employer to deal with a certain scope of business management. In general, they are not in an employment relationship that requires them to provide a given type of work under the supervision and control of the employer and receive a given amount of wage in return. In this sense, executive officials shall not be considered employees under the LSA, unless under some exceptional circumstances.

(2) Even though the person has provided labor service, if he was not in an employment relationship, he cannot be regarded as an employee under the Labor Standards Act.
In a ruling in Busan, a plaintiff could not be an employee when considering the following items collectively: Even though the employee’s place of work was restricted to company premises and the company could not substitute him with other employees, the service provider was not limited to specific working hours when his coming to and leaving the office was controlled. The company did not have any authority to discipline the person for violation of service regulations, even though the company exercised some rights to direct and supervise in the course of work performance. His earnings were not remuneration for his labor service, and he did not receive fixed or basic pay. The establishment or termination of the labor service contract was up to the service provider.

For further questions, please
call (+82) 2-539-0098 or email bongsoo@k-labor.com

    • 맨앞으로
    • 앞으로
    • 다음
    • 맨뒤로