B, who had been working at Company A, was promoted to an executive position and performed duties as a Managing Director. However, B received a disciplinary dismissal due to various acts of misconduct. B filed a lawsuit seeking a confirmation of invalidity of this dismissal, arguing that (i) despite being qualified as an employee under the Labor Standards Act the dismissal failed to comply with procedures specified in the rules of employment, collective agreement, and personnel committee regulations and thereby was procedurally flawed; (ii) there were no grounds for disciplinary action; and (iii) the dismissal was invalid due to abuse of discretionary power. Jipyong’s Labor Group represented Company A and argued that B could not be considered an employee under the Labor Standards Act and that, as an executive who committed misconduct, B's dismissal was lawful, based on the following points: (1) the circumstances under which B entered into the executive employment agreement; (2) B received significantly different treatment from employees in terms of compensation, welfare benefits, and work support in accordance with executive management regulations; (3) there was no attendance management for B, such as recording arrival and departure times or working hours; and (4) B held a position overseeing delegated duties from Company A and handled tasks with independent authority and responsibility. The court accepted all of Jipyong Labor Group’s arguments and concluded that B was not an employee under the Labor Standards Act. The court rule that the termination of the service contract was lawful, dismissing all of B’s claims.
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