Corporate trends / Performance record
Unfair Dismissal Decision Concerning “Business Size (Separate Corporation)” (Unfair Dismissal 566)
- Date2026/07/23 04:12
- Read 24
[Case Information]
This case is a decision that was procedurally dismissed on the issue of “business size (separate corporation).”
Decision Committee: Jeonbuk Regional Labor Relations Commission 2026Buhae163 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-26 · Case result: Dismissed
Summary of key issue: In light of the facts that the corporation located at the employee’s actual workplace and the employer are separate economic entities that have entered into a real estate lease agreement, that the four major social insurances, etc. are separately maintained, that their business types differ, and that there has been no personnel exchange, the corporation located at the employee’s workplace and the employer’s business cannot be regarded as a single business. As there were only three employees at the employer’s business during the one-month period prior to the date of dismissal, the business does not fall under the scope of the Labor Standards Act’s unfair dismissal remedy system for “businesses or workplaces with five or more employees,” and therefore the application for remedy for unfair dismissal…
1. Legal Implications
Ⅰ. Case Overview
In this unfair dismissal case, the employee was dismissed from a small-scale workplace where he had been employed and then filed an application for remedy for unfair dismissal with the Labor Relations Commission. The employee argued that his actual workplace and the real employer’s business should be regarded as a single business, thereby making an application for remedy for unfair dismissal under the Labor Standards Act possible. However, the Labor Relations Commission, as in similar cases frequently handled by Labor Law Firm Law&, proceeded with its determination focusing on the substantive reality of the business units.
Ⅱ. Summary of Issues
The issue in this case is whether “the business of another corporation located at the place where the employee actually worked and the employer’s business can be aggregated and treated as a single business for the purpose of counting the number of employees, and thus whether the employer’s business falls within the scope of a business subject to an application for remedy for unfair dismissal under the Labor Standards Act.”
Ⅲ. Outline of the Labor Relations Commission’s Decision
The decision panel in this case found that, in view of the facts that a real estate lease agreement had been concluded between the corporation located at the employee’s workplace and the employer, and that they were operated as independent economic entities; that enrollment in the four major social insurances, as well as accounting and tax affairs, were separately maintained; that their business types were different; and that there had been no personnel exchange, the two workplaces could not be regarded as a single business.
The dismissal in this case was held not to be subject to an application for remedy for unfair dismissal because, during the one-month period prior to the date of dismissal, the number of employees at the employer’s business was only three, and thus the business did not constitute a “business or workplace with five or more employees” eligible for the unfair dismissal remedy system under the Labor Standards Act. On this ground, the application was dismissed.
Ⅳ. Practical Points (From the Employee’s Perspective)
For an employee to assert unfair dismissal, it is necessary not only to examine the legitimacy of the dismissal itself, but first to confirm whether the business in question falls within the scope of application of the unfair dismissal remedy system under the Labor Standards Act. In particular, even if another corporation is located in the same building or in an adjacent space, where the four major social insurances, personnel authority, accounting, business type, and personnel exchanges are in substance separated, the workplaces may not be regarded as a single business. Accordingly, it is advisable to thoroughly review the relevant materials and organizational structure before filing an application for remedy.
Ⅴ. Practical Points (From the Employer/Company Perspective)
From the employer’s standpoint, where multiple corporations or workplaces are operated, it is important to establish and maintain management systems that can clearly preserve and demonstrate each corporation’s independence (as an economic entity, in terms of the four major social insurances, personnel and accounting, business type, existence or absence of personnel exchanges, etc.). At the same time, even in small-scale workplaces with fewer than five employees, personnel measures that may constitute unfair dismissal can lead to other legal disputes (wage claims, damages, civil and criminal liability, etc.). Therefore, when workforce reductions such as layoffs are necessary, employers should carefully review the procedures and grounds in advance through consultation.
(ⓒ2026copyright. Labor Attorney Youngseop Moon, Labor Law Firm Law&.)
2. Matters Decided
a. Case Overview and Procedural History
In view of the facts that the corporation located at the employee’s workplace and the employer, as separate economic entities, had entered into a real estate lease agreement; that the four major social insurances, etc. were separately maintained; that their business types differed; and that there had been no personnel exchange, the corporation located at the employee’s workplace and the employer’s business could not be regarded as a single business. As there were only three employees at the employer’s business during the one-month period prior to the date of dismissal, the business does not fall within the scope of a business subject to an application for remedy for unfair dismissal under the Labor Standards Act.
3. Gist of the Decision
a. Outline of the Labor Relations Commission’s Determination
In view of the facts that the corporation located at the employee’s workplace and the employer, as separate economic entities, had entered into a real estate lease agreement; that the four major social insurances, etc. were separately maintained; that their business types differed; and that there had been no personnel exchange, the corporation located at the employee’s workplace and the employer’s business could not be regarded as a single business. As there were only three employees at the employer’s business during the one-month period prior to the date of dismissal, the business does not fall within the scope of a business subject to an application for remedy for unfair dismissal under the Labor Standards Act. /
[See More Related Decisions]
- “Unfair Dismissal Decision Concerning ‘No Formation of Hiring Commitment (Absence of Offer Letter)’” – Date of decision: - Case result: First-instance decision upheld
- “Unfair Dismissal Decision Concerning ‘Interpretation of Scope of Application (Skilled Reemployment System)’”
- “Unfair Dismissal Decision Concerning ‘Expression of Intent to Resign (Resignation Remark Made by Telephone Call)’”
[Tags]
Unfair dismissal, business size (separate corporation), others, Labor Law Firm Law&, large labor law firm, Samseong-dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is part of the “Unfair Dismissal Decisions” series by Labor Law Firm Law&.
※ The previous article, “Unfair Dismissal Decision Concerning ‘Interpretation of Scope of Application (Skilled Reemployment System)’,” can be viewed in a new window.
※ A list of decisions related to business size (separate corporation) can be found in the “List of Decisions Related to Business Size (Separate Corporation).”
※ Korean version of this case: Korean article
This case is a decision that was procedurally dismissed on the issue of “business size (separate corporation).”
Decision Committee: Jeonbuk Regional Labor Relations Commission 2026Buhae163 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-26 · Case result: Dismissed
Summary of key issue: In light of the facts that the corporation located at the employee’s actual workplace and the employer are separate economic entities that have entered into a real estate lease agreement, that the four major social insurances, etc. are separately maintained, that their business types differ, and that there has been no personnel exchange, the corporation located at the employee’s workplace and the employer’s business cannot be regarded as a single business. As there were only three employees at the employer’s business during the one-month period prior to the date of dismissal, the business does not fall under the scope of the Labor Standards Act’s unfair dismissal remedy system for “businesses or workplaces with five or more employees,” and therefore the application for remedy for unfair dismissal…
1. Legal Implications
Ⅰ. Case Overview
In this unfair dismissal case, the employee was dismissed from a small-scale workplace where he had been employed and then filed an application for remedy for unfair dismissal with the Labor Relations Commission. The employee argued that his actual workplace and the real employer’s business should be regarded as a single business, thereby making an application for remedy for unfair dismissal under the Labor Standards Act possible. However, the Labor Relations Commission, as in similar cases frequently handled by Labor Law Firm Law&, proceeded with its determination focusing on the substantive reality of the business units.
Ⅱ. Summary of Issues
The issue in this case is whether “the business of another corporation located at the place where the employee actually worked and the employer’s business can be aggregated and treated as a single business for the purpose of counting the number of employees, and thus whether the employer’s business falls within the scope of a business subject to an application for remedy for unfair dismissal under the Labor Standards Act.”
Ⅲ. Outline of the Labor Relations Commission’s Decision
The decision panel in this case found that, in view of the facts that a real estate lease agreement had been concluded between the corporation located at the employee’s workplace and the employer, and that they were operated as independent economic entities; that enrollment in the four major social insurances, as well as accounting and tax affairs, were separately maintained; that their business types were different; and that there had been no personnel exchange, the two workplaces could not be regarded as a single business.
The dismissal in this case was held not to be subject to an application for remedy for unfair dismissal because, during the one-month period prior to the date of dismissal, the number of employees at the employer’s business was only three, and thus the business did not constitute a “business or workplace with five or more employees” eligible for the unfair dismissal remedy system under the Labor Standards Act. On this ground, the application was dismissed.
Ⅳ. Practical Points (From the Employee’s Perspective)
For an employee to assert unfair dismissal, it is necessary not only to examine the legitimacy of the dismissal itself, but first to confirm whether the business in question falls within the scope of application of the unfair dismissal remedy system under the Labor Standards Act. In particular, even if another corporation is located in the same building or in an adjacent space, where the four major social insurances, personnel authority, accounting, business type, and personnel exchanges are in substance separated, the workplaces may not be regarded as a single business. Accordingly, it is advisable to thoroughly review the relevant materials and organizational structure before filing an application for remedy.
Ⅴ. Practical Points (From the Employer/Company Perspective)
From the employer’s standpoint, where multiple corporations or workplaces are operated, it is important to establish and maintain management systems that can clearly preserve and demonstrate each corporation’s independence (as an economic entity, in terms of the four major social insurances, personnel and accounting, business type, existence or absence of personnel exchanges, etc.). At the same time, even in small-scale workplaces with fewer than five employees, personnel measures that may constitute unfair dismissal can lead to other legal disputes (wage claims, damages, civil and criminal liability, etc.). Therefore, when workforce reductions such as layoffs are necessary, employers should carefully review the procedures and grounds in advance through consultation.
(ⓒ2026copyright. Labor Attorney Youngseop Moon, Labor Law Firm Law&.)
2. Matters Decided
a. Case Overview and Procedural History
In view of the facts that the corporation located at the employee’s workplace and the employer, as separate economic entities, had entered into a real estate lease agreement; that the four major social insurances, etc. were separately maintained; that their business types differed; and that there had been no personnel exchange, the corporation located at the employee’s workplace and the employer’s business could not be regarded as a single business. As there were only three employees at the employer’s business during the one-month period prior to the date of dismissal, the business does not fall within the scope of a business subject to an application for remedy for unfair dismissal under the Labor Standards Act.
3. Gist of the Decision
a. Outline of the Labor Relations Commission’s Determination
In view of the facts that the corporation located at the employee’s workplace and the employer, as separate economic entities, had entered into a real estate lease agreement; that the four major social insurances, etc. were separately maintained; that their business types differed; and that there had been no personnel exchange, the corporation located at the employee’s workplace and the employer’s business could not be regarded as a single business. As there were only three employees at the employer’s business during the one-month period prior to the date of dismissal, the business does not fall within the scope of a business subject to an application for remedy for unfair dismissal under the Labor Standards Act. /
[See More Related Decisions]
- “Unfair Dismissal Decision Concerning ‘No Formation of Hiring Commitment (Absence of Offer Letter)’” – Date of decision: - Case result: First-instance decision upheld
- “Unfair Dismissal Decision Concerning ‘Interpretation of Scope of Application (Skilled Reemployment System)’”
- “Unfair Dismissal Decision Concerning ‘Expression of Intent to Resign (Resignation Remark Made by Telephone Call)’”
[Tags]
Unfair dismissal, business size (separate corporation), others, Labor Law Firm Law&, large labor law firm, Samseong-dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is part of the “Unfair Dismissal Decisions” series by Labor Law Firm Law&.
※ The previous article, “Unfair Dismissal Decision Concerning ‘Interpretation of Scope of Application (Skilled Reemployment System)’,” can be viewed in a new window.
※ A list of decisions related to business size (separate corporation) can be found in the “List of Decisions Related to Business Size (Separate Corporation).”
※ Korean version of this case: Korean article
