Section 1: Parties and Need for Remedy
Chapter 1: Employees
2. Determination of the Existence of Executive's and Internal Subcontractor[so-sa-jang]'s Employee Status under the Labor Standards Act
2.2 Unregistered Executive
| Supreme Court Decision No. 2010DA57459, rendered on June 27, 2013 (Recognition of Employee Status for Unregistered Executive) | |||||
| Plaintiff and Appellee: A Defendant and Appellant: Company B Facts a. The plaintiff worked at Company B with the title of Executive Vice President and primarily handled the company's financial affairs but was not a registered executive of the company. b. The Chairman of the ○○ Group, to which Company B belongs, controls subsidiary companies through a circular investment scheme, oversees the overall management of the group, and, as the sole shareholder and actual owner of Company B, exercises substantive management rights. The plaintiff regularly reported specific management matters to the Chairman and received necessary instructions from him. c. The plaintiff reported to or requested instructions from Secretary Staff of the Chairman, who was the ultimate decision-maker regarding Company B's management. Additionally, since January 2007, the plaintiff was responsible for managing a Japanese restaurant named ○○○ personally operated by the Chairman, reported accordingly, and received instructions from the Chairman through the Secretary Staff as necessary. d. When Company B paid the plaintiff's monthly salary, it withheld income tax at source, and after the plaintiff's retirement, Company B reported the plaintiff's retirement benefits as 42.5 million won to the tax office. Judgment a. Generally, if it is recognized that labor was provided to the employer in a dependent relationship for the purpose of receiving wages, even if some factors indicating an employee are missing or if the individual holds another position, it cannot be said that the individual is not an employee under the Labor Standards Act solely based on such reasons. Furthermore, even if an individual holds the title of director or auditor of the company, if the position or title is formal or nominal and the individual is actually in a relationship where they provide labor under the supervision or command of the CEO or perform certain labor under the supervision of the CEO, they are considered employees under the Labor Standards Act. b. Even if the plaintiff, formally titled as an Executive Vice President, exercised considerable authority in handling Company B's overall operations, if this was not due to being granted equivalent status and authority as a registered executive but rather providing labor under the specific and individual supervision and control of the actual manager and receiving compensation for performing certain labor (if compensation was received for the nature of labor itself), then the plaintiff is considered an employee under the Labor Standards Act. |
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