I. Summary

A foreign lawyer joined a law firm on March 17, 2003 and worked for two consecutive years and eleven months until February 11, 2006. After resigning from the law firm, he requested for payment of severance pay, but his request was rejected by the law firm on grounds that he had been treated as a partner lawyer of the law firm. The foreign lawyer, through the help of a labor attorney, filed his appeal to the Labor Office, and eventually successfully received the Severance Pay.

II. From the perspective of the foreign lawyer

As the foreign lawyer was legally employed under the Labor Laws, and had been receiving fixed monthly salary from the law firm, and had also been regularly attending its weekly meeting in addition to reporting to and receiving instructions from the law firm’s representative lawyer in the carrying out of his duties and responsibilities, in accordance with Korean Labor Law, the foreign lawyer should be paid a Severance Allowance as with any Korean employee.

III. From the perspective of the law firm

1. The foreign lawyer did not satisfy the definition under the Labor Standards Act of an employee as he was a director of the law firm, and he therefore should not be entitled to a Severance Pay as prescribed
under the Labor Standard Act.
2. Based on the facts presented below, it was evident that as the foreign lawyer was a director, he was drawing a salary and holding a position much higher than other of his peer lawyers in the same law firm.
A. He had a secretary directly hired by himself.
B. He was provided with a corporate card for use at his absolute discretion, and was additionally provided with a designated parking area.
C. His salary was much higher than that of his other peer lawyers including that of the representative lawyer.
D. His annual leave was also scheduled at his absolute discretion, without the need to seek prior approval from anyone in the law firm.
E. He also enjoyed absolute liberty in the starting and ending time of work, in working hours and work venue.
F. Above all, the applicant has not, in the conduct of his duties and responsibilities, received instructions in a defined or subordinating manner from any of the law firm’s lawyers, including that of the
representative lawyer..

IV. Related Act and Judicial Rulings

The Lawyers Act
Article 4 (Qualification as lawyer) Any person who falls under the following shall be eligible to become a lawyer.
1. Any person who passes the Bar Examination and completes the required courses at the Judicial Research and Training Institute; and
2. A person who has the qualification for a judge or public prosecutor.
 A foreign lawyer can only be employed and not be a partner of a law firm. A foreign lawyer is not allowed to establish his own business in Korea to provide legal service. Hence, from a legal perspective, the employment of a foreign lawyer should only be for the purpose of providing consultancy on foreign laws applicable to foreign countries.

A lawyer who belongs to the law firm maintains the employee status. (Nov 11, 2005, Seoul Regional Court, 2005 Kahop 33355)
According to the Lawyers Act, on registration of professional qualification and business establishment, every lawyer, including even legally affiliated lawyers, can individually conduct legal service as an independent and professional attorney at law
However, a law firm shall be established by membership lawyers, and its membership lawyers may operate its decision making process exclusively. Individual lawyers of a law firm can perform his/her law practices only under name of the law firm, and the substantial contents of his/her law practices shall be determined by the membership lawyers. Further more, the conduct of its business process also shall be under the direction and supervision of the law firm. In consideration of aforementioned facts, a lawyer belonging to the law firm shall therefore be regarded as the employee who offers work under subordinate relations to the law firm for the purpose of earning wages.

In the judgment of whether a person is an employee, it shall be made based on whether subordinate relations exist in the actual practice. (Dec 9, 1994, Supreme Court 94 da 22859)
In the judgment of whether a person satisfy the definition of an employee under the Labor Standards Act, it shall be based on whether the employee offers work to the employer in a business or workplace under subordinate relations for the purpose of earning wages in the actual practice, regardless of the employment contract or outsourcing contract of the Civil Act in the type of the contract. In the judgment of the whether the abovementioned substantial relations exist, the following shall be considered:

1.whether his job scope is decided by the employer, whether he is subjected to the rules of employment or service (personnel) regulations, and whether he works under the employer’s substantial and individual
direction and supervision;
2.whether the employer assigns working hours and working place, and whether the employee is restricted to them;
3.whether the employee himself can be double employed by a third party and whether his work can be substituted;
4.whether he owns fixtures, law material, or work tools;
5.whether his reward is a remuneration of work , whether it is comprised of basic pay or regular pay, and whether it is subjected to income tax;
6.whether his employment is continuous and whether such employment is exclusive to the employee; and
7.whether there are other laws in recognition of his status as an employee such as acts concerning the social security system. Economic and social conditions would have to be collectively considered in
judging whether a person satisfy the definition of an employee.