The Labour and Employment Disputes Review: South Korea
i Statutory famework
Korean labour law is sourced from both domestic and international laws. Positive domestic laws include the Constitution, legislation, enforcement decrees and rules while self-governing laws include collective agreements and rules of employment. International laws include treaties such as the International Labour Organization Conventions, which Korea has ratified, and customary international law.
Legislation on individual labour relations
The following are primary domestic legislation governing individual labour relations:
- the Labour Standards Act regulates labour conditions of general workers;
- the Act on the Protection, etc. of Fixed-Term and Part-Time Employees regulates employment contracts;
- the Act on the Guarantee of Employees' Retirement Benefits regulates retirement allowance systems;
- the Minimum Wage Act regulates minimum wage; and
- the Wage Claim Guarantee Act regulates wage claim guarantees in the event wages are overdue and unpaid for reasons such as the employer's insolvency.
Other key legislation includes:
- the Industrial Accident Compensation Insurance Act, which regulates workers' compensation for occupational accidents;
- the Occupational Safety and Health Act, which regulates occupational safety and health;
- the Employment Insurance Act, which regulates employment insurance;
- the Employment Security Act, which regulates employment security;
- the Act on the Protection, etc. of Temporary Agency Workers, which regulates the temporary placement of workers; and
- the Act on the Employment, etc. of Foreign Workers, which regulates the status of foreign workers.
Additionally, the Severe Accidents Punishment Act,2 which punishes persons responsible for the management of businesses in the event of a serious occupational accident was enacted in January 2021 and will become effective as of 27 January 2022.
Legislation on collective labour relations
Legislation on collective labour relations include the Trade Union and Labour Relations Adjustment Act; the Act on the Promotion of Workers' Participation and Cooperation; the Act on the Establishment, Operation, etc. of Public Officials; and the Act on the Establishment, Operation, etc. of Teachers' Unions.
ii Types of labour and employment disputes
Labour disputes in Korea can be largely divided into disputes relating to individual labour relations and those relating to collective labour relations.
Disputes related to individual labour relations include suits: (1) contesting the validity of unfavourable measures against employees such as dismissals, suspensions, transfers and disciplinary actions; (2) to confirm employee status; (3) to claim payment of wages and other allowances; (4) to claim retirement benefits; (5) to claim damages for violation of labour conditions; and (6) to claim damages for employment injury caused by the employer's unlawful acts.
Disputes related to collective labour relations include suits: (1) filed by employers to claim damages caused by unlawful industrial actions of labour unions; (2) to compel the performance of collective bargaining agreements; and (3) to confirm the representative status of a trade union regarding the simplification of bargaining windows.
An employee may claim relief for unfair dismissal or unfair labour practices at the applicable Regional Labour Relations Commission.
Administrative actions may be initiated to revoke: (1) the establishment of labour unions; (2) an order to modify labour union agreements; (3) corrective judgments regarding the breach of duty of fair representation; (4) decisions dividing bargaining units; (5) corrective orders regarding collective bargaining agreements; and (6) decisions to retry arbitral awards.
iii Labour policies and judicial trends
In matters involving individual labour relations (such as status of workers in special types of employment and the applicability of ordinary wages to various types of allowance), a number of judgments have been passed in favour of the employee. Based on a number of recent cases where the court (1) affirmed the criminal liability of a labour union for using 'labour union' in its name before filing its establishment report;3 (2) affirmed the constitutionality of the simplification of a bargaining windows system;4 and (3) imposed extensive criminal liability and damages after denying the legitimacy of industrial action,5 in matters involving collective labour relations, the courts appear to be a little more favourable to employers.
i Civil Action
Litigation on the merits
Both employer and employee can bring a claim in the civil courts to protect their rights. Claims exceeding 200 million Korean won and claims which cannot be valued because of their proprietary nature (for example, suits to confirm the invalidity of dismissals) are heard by a panel of judges in the district court (first instance), then the high court (appellate) and finally the Supreme Court. Claims under 200 million won are heard by a single judge. There is no limitation period for filing an action to confirm the invalidity of a dismissal, but courts have applied the principles of trust and good faith to dismiss claims.6 The limitation period for bringing a claim for wages is three years (Labour Standards Act, Article 49).
Provisional dispositions during labour disputes
Parties often use the process of 'provisional disposition to fix a temporary position' to resolve labour disputes as this can be cost-effective. The most common types of provisional dispositions include: disposition of wage status, of worker status preservation, of collective bargaining, and of prohibitions of industrial action. Either the court having jurisdiction over the merits of the case or the district court having jurisdiction over the location of the objects of dispute has jurisdiction over labour provisional dispositions (Civil Execution Act, Article 303). The court decides on a request for provisional disposition through a hearing process in which the debtor may participate.
ii Administrative disputes
Administrative adjudication by the Labour Relations Commission
An employee claiming unfair dismissal has three months from the date of such dismissal to file a claim with the applicable Regional Labour Relations Commission (Labour Standards Act, Article 28(2)). An employee or labour union seeking relief for unfair labour practices must file a claim with the applicable Regional Labour Relations Commission within three months of the date of such unfair practice (if the practice in question is continuous in nature then three months of the end of such practice) (Trade Union and Labour Relations Adjustment Act, Article 82(2)). The Labour Relations Commission must conduct a hearing. A party disagreeing with the decision of the Regional Labour Relations Commission has 10 days to apply for review by the National Labour Relations Commission. The National Labour Relations Commission must also conduct a hearing.
A party disagreeing with the decision of the National Labour Relations Commission has 15 days to appeal to the Administrative Court. Before the Administrative Court, the head of the National Labour Relations Commission becomes the defendant and the party who succeeded before the National Labour Relations Commission becomes a participant in the Administrative Court proceedings to support the National Labour Relations Commission. The decision of the Administrative Court may be appealed in the high court (appellate) and, thereafter, in the Supreme Court.
Lawsuits filed by the Government Workers' Union against the government constitute a party process. Likewise, a claim for overtime payment by a regional firefighting official against the local government with which he or she is affiliated also constitutes a party process, as a matter of public law.7
iii Autonomous settlement of disputes
Parties to a labour dispute may seek resolution through mediation and arbitration but this is relatively uncommon.
Types of employment disputes
i Employee status
This is an action whereby the claimant seeks to confirm his or her employee status, claim retirement allowance and confirm the invalidity of his or her dismissal. The majority of cases involve verifying the status of employees in special types of employment or confirming whether an employee, in an illegal dispatch scenario, is, in fact, an employee under the Labour Standards Act.
ii Wages and other allowances
The majority of wage-related lawsuits are claims for retirement and other statutory allowances such as overtime, and night and holiday allowances. Claims for retirement allowance often centre on whether certain wage categories should be included in the calculation of average wage, which in turn forms the basis of retirement allowance calculations. The question of whether bonuses and welfare points should be included in the calculation of ordinary wages that forms the basis of statutory allowance calculations is a recent key issue.
iii Compensation for damages
These actions often involve claims by employees for damages caused by occupational accidents or the employer's violation of labour conditions. Actions are also filed by employers against labour unions and workers for damages caused by illegal industrial actions.
iv Unfair dismissal
These actions involve an employee seeking the invalidation of (1) a dismissal and the payment of wages on the basis that he or she was dismissed unfairly; or (2) a suspension or other disciplinary action on the basis that it is unfair. Applications for relief for unfair dismissal and other unfair action may also be made to the Regional Labour Relations Commission.
v Transfer orders
This is where an employee seeks the invalidation of an employer's transfer order on the basis that it is unfair.
vi Unfair labour practices
This is where a labour union or the employee seeks, in the civil courts, the invalidation and forbearance of the employer's unfair labour practices, such as unfair treatment, anti-union agreements, refusal of collective bargaining, domination and intervention. The labour union and employee can also file an application for relief at the applicable Regional Labour Relations Commission.
vii Criminal litigation
An employer may be subject to criminal punishment if it delays the payment of wages or otherwise violates legislation regarding labour relations. An employee may be subject to criminal punishment if he or she participates in illegal industrial actions, thereby causing obstruction to business.
Year in review
i Verification of employee status
The Labour Standards Act is the core labour legislation in Korea. If a worker is not acknowledged to be an employee under this Act, he or she will not benefit from other labour laws and labour-related laws such as the Industrial Accident Compensation Insurance Act and the Employment Insurance Act, which only apply to employees under the Labour Standards Act. Therefore, verifying the status of a worker is extremely important, as otherwise the worker will have only minimal protection under the Civil Act.
Establishing employee status – criteria8
The question of whether or not a worker is an employee under the Labour Standards Act should be based on a determination of whether the substance (and not the form of contract) of the 'employer-employee' relationship is such that the worker has been engaged on a subordinate basis to provide labour to the business or at the place of business in exchange for remuneration. The question of whether a subordinate relationship exists must be further determined by comprehensively considering various economic and social factors such as whether:
- the employer:
- decides on the content of work to be undertaken;
- is subject to rules of employment and human resources regulations;
- exercises significant command and supervision over the work process; and
- designates the working hours and place of work and whether the worker is bound by them;
- the worker:
- can operate a business on his or her own account by, for example, possessing supplies, raw materials, equipment, or hiring a third party to perform the work on his or her behalf; and
- personally bears the risk of generating profits and incurring losses from the provision of labour;
- the nature of remuneration is the object of the work itself;
- the basic or fixed salary has been set;
- income tax is withheld;
- the employment relationship is continuous and exclusive; and
- the worker is recognised as an employee under the social security regime.
However, as a number of the above criteria (for example, whether a basic or fixed salary has been set, whether income tax is withheld, whether the worker is recognized as an employee under the social security regime) can be decided arbitrarily by employers (mis)using their economically superior position, the absence of such factors will not necessarily mean the worker is denied employee status.
Judicial decisions that recognised employee status
In recent years, the following have been confirmed as having employee status: a TV station VJ;9 a caregiver working at a long-term care facility for the elderly (private institution) established under the Long-Term Care Insurance Act;10 a lawyer working in a law firm;11 a debt collector;12 a driver engaged by a transportation company to deliver using his own private, registered vehicle;13 a part-time university lecturer;14 a home-consigned mail carrier;15 a community centre volunteer;16 a lecturer of English at a foreign language institute;17 and a a service technician at a satellite broadcaster.18
Judicial decisions that denied employee status
The following, on the other hand, have been denied employee status: a manager who recruited, trained and managed digital sellers (product sales persons) and received commission from the hiring company based on the sales volume of the digital sellers;19 an insurance manager who executed an entrustment contract with a post office;20 and a deliveryman affiliated with a delivery agency company.21
ii Dispatched workers and labour relations
The Act on the Protection, etc. of Temporary Agency Workers (the Temporary Agency Act) sets out exceptional circumstances where the temporary placement ('dispatch') of workers is allowed. In the workplace, there are many ways a worker may be engaged (for example, subcontracts, delegation, dispatch); but the form will depend on whether the engaging party is a dispatching agency or an employer. The question of whether temporary placements are legally permitted under the Temporary Agency Act is an often-disputed issue in Korea.
Recognition of direct employment relationships
Where an employee is dispatched by an employer to a third-party company, the employee may nevertheless be deemed to be employed by the third-party company and not by the employer if the relationship of the parties is such that an employment contract may be implied between the dispatched employee and the third-party company. In one particular case, the Supreme Court found the third-party company to which the employee had been dispatched to be the actual employer on the basis that the purported employer lacked its own identity and independence as a business proprietor; that the purported employer's existence was only nominal in nature; the dispatched employee was in fact in a subordinated relationship with the third-party company, which also paid the dispatched employee's wages; and the only beneficiary of the employee's work was the third-party company.22
Establishment of lawful temporary placements
When an employer dispatches its employee to a third-party, a question arises as to whether such dispatch is in fact a subcontract in nature or a temporary placement. If the latter, then the relationship is governed by the Temporary Agency Act. This determination is key because if the relationship is deemed to be a subcontract (i.e., a service) then there is no time limit on such relationship; whereas, if it is a temporary placement, then the maximum term for such contract is two years, after which the third party must treat the dispatched worker as its own employee (if it decides to continue the labour relationship). In making this determination, the Supreme Court will look beyond the form of relationship to the substance and will look for factors such as whether (1) the third party directly or indirectly gives binding instructions regarding the performance of the tasks; (2) the worker can be seen as having been substantially incorporated into the third party's business such that the worker and the employees affiliated with the third party constitute one working group; (3) the original employer exercises its decision-making power independently regarding the selection, number, education and training, working and break hours, holidays, inspection of work attitude of the worker to be deployed; (4) the purpose of the contract is clearly defined and the scope thereof is limited to a specific task that is distinct from that of the third party's employees; (5) the worker being dispatched has the relevant professional or technical skills; and (6) the original employer has the necessary independent corporate organisation or facilities to achieve the purpose of the contract.23
Duty to protect temporary agency workers
Taking into consideration the nature of temporary placements, the Supreme Court has held24 that an employer that receives at its workplace a temporary agency worker for its benefit and instructs such worker to engage in continuous labour must protect and ensure the safety of the temporary agency worker and that it would be reasonable for the temporary agency dispatching the worker to enter into a dispatch agreement with the employer whereby the employer would agree to comply with such obligation to protect and whereby the temporary agency would agree to dispatch the worker based on that condition being satisfied. Therefore, even if the employer has not directly employed the temporary agency worker or executed an employment contract with him or her, the temporary agency worker may rely on an implied agreement to claim compensation for damages against the employer that fails to comply with its duty to protect.
iii Succession of employment relationships
In a business transfer, in principle, employees and their employment relationships are also transferred to the acquirer of the business.25 An employee of the transferor may refuse to transfer with the business and remain an employee of the transferor company; however, in such case, if the business transfer results in lay-offs being required, the employer may dismiss the employee that refused to transfer as long as the proper procedures are followed.26
Division of companies
According to Article 530-10 of the Commercial Act, a company newly established (the Newco) as a result of a division assumes the rights and obligations of the divided company as prescribed by a division plan or agreement; thus, the employment relationships of the dividing company will also likely be transferred to the Newco. The transfer of employment relationships in a division scenario can only be permitted when the proper process of seeking the employee's consent and cooperation has been undertaken and must be denied should the purpose be to bypass legal protection afforded to employees.
Therefore, a company seeking to transfer its employment relationships as part of a business transfer to a Newco following a division, should, prior to obtaining the necessary shareholder resolutions, meet with the labour union and employees to explain the reasons for, purpose and timing of the division, the scope and details of employment relationships being transferred, the purpose of the Newco and obtain their consent to the same. As long as this process has been undertaken, the transfer of the relevant employment relationships is, in principle, deemed to be reasonable, even if the consent of the relevant individual employee was not obtained. However, where the purpose of the division is to evade the restrictive provisions relating to dismissals under the Labour Standards Act and dismiss employees, the employee may refuse to transfer and stay with the dividing company.27
iv Retirement systems
Article 19(1) of the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion (the Elderly Employment Law)28 provides that '[a]n employer shall set the retirement age of workers at 60 years of age or older' and Article 19(2) further provides that 'in cases where any employer sets the retirement age of workers at below 60 years of age notwithstanding [Article 19(1)], the retirement age shall be deemed set at 60'. Pursuant to the Elderly Employment Law, the Supreme Court has held that any employment contract, rules of employment or collective bargaining agreements that set the retirement age to below 60 are null and void to the extent that they violate Article 19. The relevant retirement age is to be calculated based on the person's actual birth date.29
v Payment in lieu
Where an employer intending to dismiss an employee fails to give such employee at least 30 days' prior notice, it must pay such employee a payment in lieu amounting to 30 days' ordinary wage (Labour Standards Act, Article 26), regardless of whether the dismissal is effective. Even if the dismissal is deemed ineffective (because it is regarded as unfair), the employee still has the right to the payment in lieu of notice.30
vi Ordinary wage
The term 'ordinary wage' means 'hourly wage, daily wage, weekly wage, monthly wage, or contract amount to be paid to an employee for a specifically agreed work or entire work on a regular and flat basis'.31 The ordinary wage is a concept needed for calculating miscellaneous additional wages, and numerous lawsuits are initiated over which payments fall within the scope of the ordinary wage.
Scope of ordinary wage32
The question of which payments fall within the scope of the ordinary wage should be determined on the basis of whether the payment is monetary (or in-kind) and is made regularly, uniformly and on a fixed basis as remuneration for prescribed work. 'Remuneration for prescribed work' refers to monetary (or in-kind) payment that the employer has agreed to pay the employee for work undertaken during normal prescribed work hours. Additional wages paid by the employer for working overtime or for performing duties outside his or her scope of employment are deemed to be payments not related to work conducted during normal prescribed work hours and therefore are not considered to be ordinary wages.
Payments will be regular if they are made continuously and at regular intervals. So, even if a payment is not made every month but, for example, quarterly, such payment will be deemed to be a regular payment and will fall within the scope of the ordinary wage.
Payments will be uniform if they are made to all employees who have achieved certain conditions or standards. Since the concept of the ordinary wage is to create a fixed and standard pay, these conditions or standards should also be fixed. Also, because the ordinary wage is used to establish the value of prescribed work, the conditions or standards used to determine whether payments made to all employees are uniform must necessarily be related to the content and nature of the work prescribed, the skills and experience required for that work and other conditions that determine the value of the prescribed work.
Payments will be fixed if they are paid regardless of the employee's performance and other labour conditions. A fixed wage may be defined as the minimum basic remuneration payable to a worker in consideration of the worker's day's work, even if such worker has only worked for one day.
Since the ordinary wage is a fundamental tool prescribed by the law to establish the basic standards of labour conditions, its meaning or scope cannot be separately agreed by the employer and employee (for example, through a collective agreement). Thus, any labour-management agreement that purports to exclude payments that fall within the scope of the ordinary wage under the Labour Standards Act will be ineffective.
Condition of incumbency
Regardless of whether or not an employee has worked his or her prescribed hours, where wages are set to be paid on a payment date (or other point in time) only to employees in service, an employee will only be eligible to receive remuneration if he or she is incumbent at that specific time. Wages that are paid under such conditions cannot be seen to be remuneration for prescribed work or of a fixed nature since the employee will not receive any payment for work undertaken (whether during normal work hours, overtime, at night or on a holiday) if he/she retires prior to the relevant point in time.33
Welfare points based on a selective welfare system
In a case before the Supreme Court, welfare points that were awarded to employees on a continuous and regular basis pursuant to a collective agreement or rules of employment, for use on an employee-only online store as part of a flexible welfare programme were deemed to fall outside the scope of ordinary wage because such award was not in consideration of labour provided.34
vii Additional payments
In a matter where an employer had paid only holiday wage without calculating overtime pay for an employee that had worked more than 40 hours a week, the Supreme Court held that holiday workhours fall outside the weekly standard workhours and weekly overtime working hours so the employee could not be entitled to additional wage in respect of both holiday work hours and overtime.35 The amended (and current) Labour Standards Act clearly reflects this intention. Under Article 56(2), an employer must pay an additional 50 per cent of the ordinary wage to employees who work less than eight hours on a holiday, and an additional 100 per cent of the ordinary wage to those who work more than eight hours on a holiday.
viii Fixed-term labour
Expectation for renewal
An employee who has concluded a fixed-term employment contract will lose his or her employee status upon the expiration of such fixed term and will be deemed to have resigned automatically unless he or she renews the employment contract. However, if the employment contract, rules of employment or collective bargaining agreement stipulates that the employment contract will be renewed upon satisfaction of certain conditions or, even if no such provisions exist, if the employee's expectation for renewal can be justified on the grounds that a relationship of trust and understanding between the parties had been established (based on a totality of circumstances, including the contents of the contract, the motives and particulars surrounding the formation of the contract, existence of renewal standards such as renewal procedures and requirements, and the nature of the employee's work), then the employer's refusal to renew the contract may be deemed to be unfair and, therefore, null and void.36
In the case of fixed-term employment contracts entered into after the retirement age, the Supreme Court has further held that in addition to the above factors, the employee's ability to undertake the work required by the job, the employee's competence, decrease in work efficiency and increase of danger due to age, and other precedent cases of employees working beyond the retirement age should be taken into consideration when determining whether the employee's expectation for renewal is justified.37
Repeating fixed-term employment contracts
Under Article 4(1) of the Act on Protection, etc. of Fixed-Term and Part-Time Employees, an employer may hire a fixed-term worker for a period not exceeding two years (where his or her fixed-term employment contract is repetitively renewed, the total period of his or her continuous employment shall not exceed two years), provided that, where any of the following circumstances apply, the employer may hire a fixed-term worker for more than two years: (1) the period required to complete a project or particular task is specified; (2) a fixed-term worker is needed to fill a vacancy arising from a worker's temporary suspension from duty or dispatch until the worker returns to work; (3) the period required for a worker to complete his or her schoolwork or vocational training is specified; (4) an employer enters into an employment contract with a senior citizen; (5) the job requires professional knowledge and skills or is offered as part of the government's welfare or unemployment measures; or (6) where any other reasonable grounds exist (collectively 'the Article 4(1) exceptions'). However, the Supreme Court has held that, even if an Article 4(1) exception applies to a fixed-term contract that is entered into on a repeated basis, if – based on the context of the employment contract, parties' intentions, the existence of breaks between contract periods, job description and similarity of working conditions – the periods prior to and following the exception periods have continued without any hiatus, such periods will be added up to calculate the total period of contract under Article 4 of the Act on Protection, etc. of Fixed-Term and Part-Time Employees.38
Should a fixed-term employee claim that he or she is being discriminated against because of the nature of his or her contract, such claims of discriminatory treatment in respect of remuneration must be verified by comparing each category of wage in detail.
ix Minimum wage
Where a taxi company (employer) attempted to fix the standard working hours of its employees (taxi drivers) regardless of the actual number of hours worked in order to calculate the fixed amount of salary (which is based on minimum wage multiplied by number of hours worked) due to each employee on the basis that it was difficult to fix the working hours of taxi drivers, the Supreme Court held these actions to be unreasonable, particularly when the real purpose was to avoid the Minimum Wage Act. In this case, the employer and the taxi drivers' labour union had agreed simply to reduce the number of contractual work hours (without actually modifying the working environment or actual work hours) to make it seem as though the fixed hourly wages were greater than they were in reality, but this in fact had the effect of causing the minimum wage paid to fall beneath the legislative standard. The Court found the agreement between the employer company and the labour union to be invalid because the purpose had been to circumvent the application of Article 6(5) of the Minimum Wage Act, which is mandatory law.39
x Personnel orders
Transfer measures can be disadvantageous for employees because they entail changes in the type, content and place of work, but they are not null or void unless special circumstances exist. In principle, the employer has significant discretion to transfer personnel for the purposes of its business and, as long as it does not abuse or misuse this discretion, a transfer measure will not necessarily be deemed to violate the Labour Standards Act.
Although disciplinary actions such as suspensions result in disbenefits to employees, if disciplinary measures of this kind are available to the employer under the rules of employment or other employment policies, the employer is, in principle, afforded a wide discretion to use such measures, as long as this discretion is not misused or abused in violation of the Labour Standards Act.40
xi Rules of employment
Rules of employment that have been amended unfavourably in respect of employees will not be deemed to supersede individual employment contracts that have more favourable terms and conditions, even if the amendment to the rules of employment were agreed to collectively. In this context, the Supreme Court held in a relevant case that the more favourable provisions of the individual employment contract take priority over the rules of employment unless the employer obtains each individual employee's consent.41
xii Managerial dismissals and re-hire obligations
Where an employer who has dismissed an employee in accordance with Article 24 of the Labour Standards Act intends to hire, within three years of the date of the dismissal, a new employee to undertake the same duties as was undertaken by the dismissed employee at the time of dismissal,the employer must preferentially rehire the dismissed employee unless the dismissed employee objects to concluding an employment agreement or special circumstances, such as an objective reason that makes it difficult to anticipate that an employment agreement will be concluded, exist; otherwise, the employer may be deemed to have violated the preferential re-hire provisions under Article 25(1) of the Labour Standards Act.42
xiii Preferred hiring of bereaved family members
If an employer has concluded a collective agreement that provides that it will hire members of the bereaved family in the case of death owing to an industrial accident or other specified reasons, such an agreement cannot be deemed to be immoral or contrary to social order unless such provisions of the collective agreement excessively restrict the employer's hiring power or significantly harm the fairness of job opportunities.43
xiv Duties of fair representation
Under a unified bargaining window system, a trade union that is not a representative union cannot independently exercise its collective bargaining rights. Therefore, the Trade Union and Labour Relations Adjustment Act prohibits a representative bargaining trade union and an employer from discriminating among trade unions participating in procedures for the simplification of bargaining windows or members thereof without reasonable grounds.44 Failure by the representative union to provide information and to collect the opinions of minority trade unions at all stages of the collective bargaining process does not necessarily mean that such representative union has violated its duties of fair representation. Rather, a representative union will be found to have procedurally violated fair representation duties if, having looked at the collective bargaining process as a whole, it is determined that the representative union failed to inform the minority unions of and to collect their opinions in respect of the most basic and important information and thereby discriminated against such minority unions without any reasonable cause.45
xv Industrial action by employees of a contractor at the worksite of the contractee
As a contractee is not, in principle, an employer of the contractor's employees, an industrial action by the contractor's employees at the worksite of a contractee cannot, even if valid against the contractor (as employer), be deemed to be valid against the contractee. That said, the contractee's worksite is where the contractor's employees gather and provide services and, as such, the worksite becomes the contractor employees' living base and strikes or sabotage, which are some of the main methods of industrial action, can only take place at the contractee's worksite. Furthermore, even though the contractee does not have any direct employment relations with the employees of the contractor, it does benefit from the services provided by these employees and has opened its worksite to the contractor's employees ultimately to benefit from such services; therefore, even if certain legal interests of the contractee are violated by an industrial action of the contractor's employees at the worksite of the contractee, social norm may require the contractee to tolerate this.46
Outlook and conclusions
Traditional labour disputes are seeing a lot of new case law precedents. In the case of ordinary wage lawsuits, there is an increased tendency in the lower courts to find that certain categories of payment (which have traditionally been found by the Supreme Court to fall outside the scope of ordinary wages) fall within the scope of the ordinary wage and this is causing intense controversy in the industry. It is also anticipated that workers in special types of labour, who have traditionally not been protected under the Labour Standards Act, will be increasingly considered 'employees' under the Act, and actions that were previously deemed to be subcontracting and, therefore, valid may be increasingly held to be illegal worker dispatch. Additionally, it is anticipated that the entry into force of the Severe Accidents Punishment Act47 on 27 January 2022 will see an increase in the number of cases involving punitive damages and criminal punishment being imposed on persons (such as chief executive officers) responsible for the management of a business. Furthermore, pursuant to the revised Trade Union and Labour Relations Adjustment Act, (1) workers who are not engaged in a business or workplace may subscribe to a company-based trade union; and (2) the deletion of the provision that prohibited the payment of wages to union workers has resulted in the expansion of the scope of the worker's right to unionise.
1 Chang Young Kwon is a partner, Marc Kyuha Baek is an associate and Jane Young Sohn is a senior foreign attorney at Jipyong LLC.
2 The official English name of the Act is yet to be confirmed.
3 Supreme Court Decision 2019Do8505, 31 October 2019.
4 Constitutional Court Decision 2011HeonMa338, 24 April 2012.
5 Supreme Court Decision 2016Da11226, 29 November 2018.
6 Supreme Court Decision 99Du4662, 25 June 1999.
7 Supreme Court Decision 2012Da102629, 28 March 2013.
8 Supreme Court Decision 2004Da29736, 7 December 2006.
9 Supreme Court Decision 2010Du10754, 24 March 2011.
10 Supreme Court Decision 2011Do9077, 15 November 2012.
11 Supreme Court Decision 2012Da77006, 13 December 2012.
12 Supreme Court Decision 2012Da20550, 9 July 2015.
13 Supreme Court Decision 2015Du51460, 25 October 2018.
14 Supreme Court Decision 2015Du46321, 14 March 2019.
15 Supreme Court Decision 2016Da277538, 23 April 2019.
16 Supreme Court Decision 2017Du62235, 30 May 2019.
17 Supreme Court Decision 2018Da239110, 18 October 2018.
18 Supreme Court Decision 2019Du50168, 28 November 2019.
19 Supreme Court Decision 2009Da37923, 14 July 2011.
20 Supreme Court Decision 2011Da46371, 12 July 2013.
21 Supreme Court judgment 2016Du49372, 26 April 2018, although, the Court in this case found that the worker could be deemed to have 'special employee' status under Article 125(1) of the Industrial Accident Compensation Insurance Act.
22 Supreme Court Decision 2012Da96922, 26 February 2015.
23 Supreme Court Decision 2010Da106436, 26 February 2015.
24 Supreme Court Decision 2011Da60247, 28 November 2013.
25 Supreme Court Decision 2002Da70822, 9 June 2005.
26 Supreme Court Decision 2010Da41089, 30 September 2010.
27 Supreme Court Decision 2011Du4282, 12 December 2013.
28 Amended on 22 May 2013.
29 Supreme Court Decision 2018Du41082, 29 November 2018.
30 Supreme Court Decision 2017Da16778, 13 September 2018.
31 Enforcement Decree of the Labour Standards Act, Article 6(1).
32 Supreme Court Decision 2012Da89399, 18 December 2013.
33 Supreme Court Decision 2013Da60807, 12 July 2018.
34 Supreme Court Decision en banc 2016Da48785, 22 August 2019.
35 Supreme Court en banc Decision 2011Da112391, 21 June 2018; note, this case was decided under the former Labour Standards Act.
36 Supreme Court Decision 2007Du1729, 14 April 2011.
37 Supreme Court Decision 2016Du50563, 3 February 2017.
38 Supreme Court Decision 2017Du54975, 19 June 2018.
39 Supreme Court en banc Decision 2016Da2451, 18 April 2019.
40 Supreme Court Decision 2007Du22498, 10 July 2008.
41 Supreme Court Decision 2018Da200709, 14 November 2019.
42 Supreme Court Decision 2016Da13437, 26 November 2020.
43 Supreme Court Decision 2016Da248998, 27 August 2020.
44 Trade Union and Labour Relations Adjustment Act, Article 29-4(1).
45 Supreme Court Decision 2019Da262582, 29 October 2020.
46 Supreme Court Decision 2015Do1927, 3 September 2020.
47 The official English name of the Act is yet to be confirmed.