JIPYONG LLC

[Case No. Seoul Administrative Court 2018Kuhap83444 dated April 2, 2020]

The Seoul Administrative court held that workbook tutors who have signed “entrustment management agreements” with a company that runs a workbook business are employees under the Trade Union and Labor Relations Adjustment Act (hereinafter the “Trade Union Act”).

The plaintiff was a workbook development and education company, and signed the employment contract with "ordinary employees” while signing the entrustment management agreement with “tutors.”  The labor union, a supporting participant for the defendant (hereinafter the “Participant”), had as its members about 290 tutors that signed the entrustment management agreement with the plaintiff.  The Participant notified the plaintiff on July 13, 2018 that “the tutors of the plaintiff joined the Participant” and demanded bargaining for the 2018 collective agreement, but the plaintiff did not make the announcement of the Participant’s bargaining demand, arguing that the tutors were not “employees” under the Trade Union Act.

The Participant then filed an application with the Labor Relations Commission for correction of the plaintiff’s request for bargaining, and the Regional Labor Relations Commission and the National Labor Relations Commission decided that the plaintiff had an obligation to announce the Participant’s request for bargaining.  In response, the plaintiff filed a lawsuit to cancel the decision of the National Labor Relations Commission.

The Seoul Administrative Court confirmed the existing legal principle that whether a worker is an employee under the Trade Union Act should be based on whether there is a need to guarantee three labor rights in light of the substance of the labor provision relationship, and that it is not necessarily limited to employees under the Labor Standards Act.  Furthermore, considering the following circumstances, the court ruled that the tutors were employees under the Trade Union Act.

①  The tutors spent a considerable amount of time on the work under the entrustment management agreement.  They relied on the plaintiff for most of their income.

②  When the plaintiff entered into the agreement with the tutors, the contents of the contract, including the amount of remuneration, were decided unilaterally by the plaintiff.

③  The plaintiff handed down new membership target to the tutors, and checked whether they achieved the goal through team leaders.  The plaintiff provided regular education to the tutors, and they were forced to participate.  Thus there was some level of command and supervision between the plaintiff and the tutors.

④  Managing membership and teaching, which were tasks performed by the tutors, were essential for the plaintiff’s business. The contents of the work had virtually no difference from those provided by the employees for the plaintiff.  Thus the fee paid to the tutors was the remuneration for provision of labor.

⑤  The contents of the entrustment management agreement were unilaterally decided by the plaintiff, and directed and supervised by the plaintiff.  Thus there was a need to recognize them as employees under the Trade Union Act.

Thus the court decided that the plaintiff was obliged to publicly announce the Participant’s request for bargaining, since the tutors were recognized as employees and the Participant was a labor union under the Trade Union Act.  The court also found that the decision of the National Labor Relations Commission was legitimate.