Section 1: Parties and Need for Remedy
Chapter 1: Employee
2. Determination of the Existence of Executive's and Internal Subcontractor[so-sa-jang]'s Employee Status under the Labor Standards Act
2.4 Internal Subcontractor[so-sa-jang]
| Supreme Court Decision No. 2014DA12141, rendered on May 26, 2016 (Recognition of Employee Status for Small Business Owners) | |||||
| Appellant: Defendant Appellee: A Facts a. The defendant, who joined Company F (which later changed its name to M on February 2, 2004), worked as a production worker and encouraged G and H, who were working as general workers at M, to work as small business owners, explaining the difference in wages, advantages, and disadvantages between working as general workers at M and working as small business owners. b. G and H each entered into lease subcontract agreements with the defendant, under which they received materials and tools necessary for parts production free of charge from the defendant, manufactured parts, supplied them, and received compensation calculated at ₩8,000 per hour. The defendant also paid severance pay to G and H for the period they worked as general workers. c. G and H did not subscribe to the so-called "four major insurances," including pension insurance, employment insurance, industrial accident compensation insurance, and health insurance, in relation to this company. Additionally, during this period, the defendant paid value-added tax and comprehensive income tax on behalf of G and H, which they were required to pay as business owners. d. G and H testified in the trial court that during their tenure as small business owners, they received instructions on their work from the company's CEO, manager, or factory manager, and when the CEO instructed, the factory manager provided drawings. They also mentioned that they filled out time cards, received safety training from the CEO or designated personnel, received overtime pay when working overtime, and were sometimes compelled by the defendant to come to work even on weekends. They stated that there was no difference in the nature of their work between working as small business owners and as general workers. e. I, who worked as a small business owner at this company, relinquished the position of small business owner while working and transitioned to working as a general worker. In the trial court, I stated that the choice of being a small business owner was made freely based on personal preference and that the monthly salary was about ₩400,000 to ₩500,000 higher than when working as a general worker. I also mentioned that instructions were given by the CEO or manager to process delivered goods as a small business owner, commuting hours were fixed, and leaving during working hours required notification to the company, with vacation periods set from the end of July to early August. Additionally, I stated that they had never received orders for parts production from other companies apart from this company and that there was no difference in the nature of their work between working as a general worker and as a small business owner. Judgment a. In determining whether an individual who was originally a simple worker subsequently assumes the appearance of a management entity and provides labor similar to or the same as before (in what is commonly referred to as taking on the form of a small business owner) in a manner where they themselves sever the previous employment relationship and voluntarily retire, or whether they were forced or formally made to assume the form of a small business owner, factors such as business plans, profit and loss calculations, autonomy in operating the business, the extent of intervention or interference by the main company in the process of work performance or labor management, changes in compensation payment methods and amounts, and any differences compared to other employees of the main company who perform similar work should also be considered. b. Considering that G and H received hourly wages calculated based on working hours each month and received overtime pay calculated based on working hours, obtained permission or consent from the company when going out, always filled out time cards as commuting hours were fixed, and vacation periods were set from the end of July to early August, it is reasonable to regard G and H as employees who provided labor to the company in a dependent relationship for the purpose of wages, regardless of the formalities of the contracts they entered into with the company. Moreover, the fact that G and H registered as business owners during the period they worked as small business owners or did not subscribe to the so-called "four major insurances" does not necessarily lead to a different conclusion. |
|||||
|
<<
< 1 >
>>
|
Table of Contents