JIPYONG LLC

Jipyong News|Newsletter_Labor & Employment

[Recent Court Case 3] The employee engaged in driving business vehicles is denied of the implied employment relationship or dispatch relationship.

2020.09.10

[Case No. Changwon District Court Decision 2018GaHap55350 dated Sep. 10, 2020] 
 
In this case, the court denied the implied employment relationship or dispatch relationship with respect to an employee engaged in driving business vehicles. 
 
The defendant (the “Defendant”) was a company which operates the business of manufacturing of components and engines of aircrafts. The plaintiff (the “Plaintiff”) was hired by the Defendant as a regular employee and engaged in driving vehicles before resigning on September 30, 1998. The Plaintiff then entered into an employment agreement with a company which was in a contractual relationship with the Defendant for operation, maintenance and management of the business vehicles (the “Contractor”) and engaged in driving vehicles for the Contractor from November 1998. The Contractor closed the business on July 1, 2016, and the Plaintiff re-started working for the Defendant as a contract worker from July 1, 2016 (through a fixed-term employment agreement). The Plaintiff became a non-fixed term employee on July 1, 2018 and has been working for the Defendant until now. 
 
In this case, the Plaintiff filed a complaint first arguing that, although the Plaintiff formally entered into an employment agreement with the Contractor from November 1998 to June 2016, an implied employment relationship existed between the Plaintiff and the Defendant, given that the Contractor was lacking independence as a business and could be equated to an agency for the Defendant; the Defendant actually provided instructions and supervision to the Plaintiff and paid the wage to the Plaintiff for the work provided by the Plaintiff. The Plaintiff alternatively argued that the contract between the Defendant and the Contractor should be deemed a dispatch agreement for the sole purpose of providing labor force, and thus, the Plaintiff should be deemed the employee for the Defendant from July 1, 2000 which is two years after July 1, 1998, the effective date of the Act on the Protection, Etc. of Temporary Agency Workers. Based on these arguments, the Plaintiff sought payment for the balance of the unpaid wage from the Defendant. 
 
The court, however, issued a decision finding that there was not an implied relationship between the Plaintiff and the Defendant in view of the following: (i) the Contractor entered into the contract with the Defendant and negotiated in the process of entering into the contract the terms and conditions of the contract including the contract price; (ii) the Contractor was equipped with separate rules of employment rules, hired employees, and paid the wages in the name of the Contractor as a separate entity from the Defendant; (iii) the drivers including the Plaintiff were hired by and working for the Contractor rather than the Defendant; (iv) there was no material supporting that the Defendant provided the instructions and supervision to the employees of the Contractor or managed the attendance of these employees; (v) the contractor leased a building from the Defendant and owned its computers, printers, and other office supplies; and (vi) the Company was independently enrolled in the four social insurances (i.e. health insurance, national pension, unemployment insurance, and industrial accident compensation insurance) and processed its accounting and settlements as separate from the Defendant. 
 
In deciding that the Plaintiff and the Defendant was not in a dispatch relationship under which the Plaintiff receives directions and orders from the Defendant, the court also considered the following: 
 
(1) The Defendant did not give directions or orders to the employees of the Contractor. 
 
The Defendant informed the Contractor of the set schedule in advance in accordance with the delivery schedule, and the Plaintiff received instructions from the Contractor to deliver the products by the delivery date to the destination using the route selected by the Plaintiff. 
 
(2) The employees of the Contractor were not incorporated into the business of the Defendant. 
 
The employees of the Defendant and the employees of the Contractor were not put to work together without distinction. In case of vacancy from the employees of the Contractor, the vacancy was not filled by the employees of the Defendant. 
 
(3) The Contractor exercised its authority related to its employees. 
 
The Contractor directly hired its employees based on its independent rules of employment, exercised its authority on HR management, and independently enrolled in the four social insurances. 
 
(4) The purpose of the subcontract was limited to the performance of work within the scope specifically limited to “driving, maintenance and repair of the Defendant’s business vehicles, and any other work related to the vehicles requested by the Defendant”. 
 
(5) The Contractor had its independent organization and facilities.

KOREA LEGAL INSIGHT Korea FSC Proposes New Rules to Improve Corporate Disclosures 2025.12.15

KOREA LEGAL INSIGHT Korea’s 2025 Tax Reform: Analyzing Regulatory and Compliance Shifts for Foreign Investors 2025.11.17

Back to List

Related Practices

Professionals

Partner
Ji Yun YANG
+82-2-6200-1652 jyyang@jipyong.com

Related Practices

Professionals

SHARE

Disclaimer

Limited Liabilities