Corporate trends / Performance record
Unfair Dismissal Decision on “Standing as a Party (Subcontracted Partner Company)” (Unfair Dismissal 570)
- Date2026/07/25 04:07
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[Case Information]
This case is an unfair dismissal decision in which the employer prevailed (application dismissed) on the issue of “standing as a party (subcontracted partner company).”
Decision Body: Gyeonggi Regional Labor Relations Commission
Case No. 2026BuHae1126 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026-05-22 · Result: Dismissed
Summary of key issue: The employee argued that the respondent had standing as a party because it issued all work instructions.
1. Legal Implications
Ⅰ. Case Overview
In this application for remedy for unfair dismissal, the employee regarded the principal (ordering) company as the de facto employer and filed an application for remedy for unfair dismissal with the Labor Relations Commission. However, the Gyeonggi Regional Labor Relations Commission denied that the respondent principal company had standing as a party and dismissed the application. The employee argued that the principal company issued all work instructions, whereas the principal company maintained that it was not the employer but merely in a subcontracting/consignment relationship with the partner company.
Focusing on the counterparty to the employment contract, the entity responsible for wages and the four major social insurances, and the nature of work instructions, the Commission examined who was the substantive employer and concluded that, in this case, the principal company was not the proper respondent against whom an order to remedy unfair dismissal could be issued.
Ⅱ. Summary of the Issue
The issue in this case is whether, in a situation where an employee belonging to a partner company files an application for remedy for unfair dismissal against the principal company, the principal company falls within the scope of an “employer” under the Labor Standards Act and thus qualifies as the respondent (a party with standing) in the Labor Relations Commission’s remedial proceedings.
Ⅲ. Gist of the Labor Relations Commission’s Decision
The panel in this case noted that the employee had entered into an employment contract with the partner company and had never entered into an employment contract with the principal company; that the partner company was the entity responsible for personnel and labor management, including payment of wages and enrollment in employment insurance; and that the employee himself acknowledged the existence of the partner company as a separate entity.
In light of these circumstances, the Commission viewed the principal company’s instructions to the employee not as directions and supervision by an employer under the Labor Standards Act, but merely as ordinary work coordination necessary for the performance of a subcontracting/consignment contract.
The dismissal in this case should therefore be evaluated in substance as a personnel measure taken by the partner company. Accordingly, the principal company could not be the respondent to an order to remedy unfair dismissal, and the application for remedy had to be dismissed on the ground that the named respondent lacked standing as a party.
Ⅳ. Practical Points (From the Employee’s Perspective)
For an employee to challenge an unfair dismissal against the principal company, it is not sufficient merely to assert that the principal issued work instructions. The employee must prove that, in terms of the party to the employment contract, the entity paying wages, the entity responsible for the four major social insurances, and the actual chain of command and supervision, there was a substantive relationship of subordination as an employee to the principal company. In particular, in subcontracting/consignment structures, it is important to systematically collect circumstantial evidence showing that “although formally affiliated with the partner company, the principal was in substance the employer” (such as records of attendance management, performance evaluations, and involvement in disciplinary measures).
If the employee received a dismissal notice from the partner company but files an application for remedy only against the principal company, the application may be dismissed for lack of standing of the respondent. Therefore, the employee should strategically select the respondent(s) after reviewing both the actual counterparty to the employment contract and any entity that may be deemed a substantive employer.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the principal company’s standpoint, even if it does not directly enter into employment contracts with the partner company’s employees, there is a high risk that the Labor Relations Commission will recognize it as an employer if, in reality, it controls and determines matters such as hiring, dismissal, evaluations, and attendance management. In subcontracting/consignment contracts, work instructions should be limited to what is necessary for contract performance, and documentation and actual operations must be aligned so that personnel authority and management of wages and the four major social insurances are exercised through the partner company.
In addition, when changing partner companies or terminating contracts, the principal should clarify in the contract who bears responsibility, and establish an internal compliance system to ensure that the partner company complies with its obligations under the Labor Standards Act, so that the process does not in effect result in the exclusion or dismissal of specific employees.
To prevail in this type of case, it is advisable to have a thorough understanding of judicial precedents and the operational standards of the Labor Relations Commission regarding the criteria for determining employee status and employer status, and to consult with experts such as Labor Law Firm Law& in order to carefully design in advance the issues of standing, evidence structure, and argumentation.
2. Matters Determined
a. Case Overview and Procedural History
The employee argued that the respondent had standing as a party because it issued all work instructions. However, (i) the employee entered into an employment contract with the partner company and never entered into an employment contract with the respondent; (ii) there is no objective evidence that the respondent issued specific work instructions to the employee, and the respondent’s work instructions appear to have been measures for the normal handling of work under the consignment contract rather than directions and supervision in the capacity of an employer under the Labor Standards Act; (iii) wages, employment insurance, and other matters regarding the employee were handled by the partner company; and (iv) the employee also acknowledged the existence of the partner company as a separate entity. In light of all these factors, the respondent is not a proper party to the remedy proceedings…
3. Gist of the Decision
a. Gist of the Labor Relations Commission’s Decision
The employee argued that the respondent had standing as a party because it issued all work instructions. However, (i) the employee entered into an employment contract with the partner company and never entered into an employment contract with the respondent; (ii) there is no objective evidence that the respondent issued specific work instructions to the employee, and the respondent’s work instructions appear to have been measures for the normal handling of work under the consignment contract rather than directions and supervision in the capacity of an employer under the Labor Standards Act; (iii) wages, employment insurance, and other matters regarding the employee were handled by the partner company; and (iv) the employee also acknowledged the existence of the partner company as a separate entity. In light of all these factors, the respondent is not a proper party to the remedy proceedings… /
[More Related Decisions]
- “Unfair Dismissal Decision on ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Decision on ‘Expression of Intent to Resign (Resignation Remarks Made by Telephone)’”
- “Unfair Dismissal Decision on ‘No Formation of Hiring Commitment (Absence of Offer Letter)’” – Decision date: – Case No.: First-instance decision upheld
[Tags]
Unfair dismissal, Standing as a party (subcontracted partner company), Employer status · employee status, 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 Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ You can view the previous article, “Unfair Dismissal Decision on ‘Genuineness of Letter of Resignation (Change from Contract Expiry · Recommended Resignation)’,” in a new window.
※ A list of decisions related to standing as a party (subcontracted partner company) can be found under “List of Decisions Related to Standing as a Party (Subcontracted Partner Company).”
※ Korean version of this case: Korean article
This case is an unfair dismissal decision in which the employer prevailed (application dismissed) on the issue of “standing as a party (subcontracted partner company).”
Decision Body: Gyeonggi Regional Labor Relations Commission
Case No. 2026BuHae1126 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026-05-22 · Result: Dismissed
Summary of key issue: The employee argued that the respondent had standing as a party because it issued all work instructions.
1. Legal Implications
Ⅰ. Case Overview
In this application for remedy for unfair dismissal, the employee regarded the principal (ordering) company as the de facto employer and filed an application for remedy for unfair dismissal with the Labor Relations Commission. However, the Gyeonggi Regional Labor Relations Commission denied that the respondent principal company had standing as a party and dismissed the application. The employee argued that the principal company issued all work instructions, whereas the principal company maintained that it was not the employer but merely in a subcontracting/consignment relationship with the partner company.
Focusing on the counterparty to the employment contract, the entity responsible for wages and the four major social insurances, and the nature of work instructions, the Commission examined who was the substantive employer and concluded that, in this case, the principal company was not the proper respondent against whom an order to remedy unfair dismissal could be issued.
Ⅱ. Summary of the Issue
The issue in this case is whether, in a situation where an employee belonging to a partner company files an application for remedy for unfair dismissal against the principal company, the principal company falls within the scope of an “employer” under the Labor Standards Act and thus qualifies as the respondent (a party with standing) in the Labor Relations Commission’s remedial proceedings.
Ⅲ. Gist of the Labor Relations Commission’s Decision
The panel in this case noted that the employee had entered into an employment contract with the partner company and had never entered into an employment contract with the principal company; that the partner company was the entity responsible for personnel and labor management, including payment of wages and enrollment in employment insurance; and that the employee himself acknowledged the existence of the partner company as a separate entity.
In light of these circumstances, the Commission viewed the principal company’s instructions to the employee not as directions and supervision by an employer under the Labor Standards Act, but merely as ordinary work coordination necessary for the performance of a subcontracting/consignment contract.
The dismissal in this case should therefore be evaluated in substance as a personnel measure taken by the partner company. Accordingly, the principal company could not be the respondent to an order to remedy unfair dismissal, and the application for remedy had to be dismissed on the ground that the named respondent lacked standing as a party.
Ⅳ. Practical Points (From the Employee’s Perspective)
For an employee to challenge an unfair dismissal against the principal company, it is not sufficient merely to assert that the principal issued work instructions. The employee must prove that, in terms of the party to the employment contract, the entity paying wages, the entity responsible for the four major social insurances, and the actual chain of command and supervision, there was a substantive relationship of subordination as an employee to the principal company. In particular, in subcontracting/consignment structures, it is important to systematically collect circumstantial evidence showing that “although formally affiliated with the partner company, the principal was in substance the employer” (such as records of attendance management, performance evaluations, and involvement in disciplinary measures).
If the employee received a dismissal notice from the partner company but files an application for remedy only against the principal company, the application may be dismissed for lack of standing of the respondent. Therefore, the employee should strategically select the respondent(s) after reviewing both the actual counterparty to the employment contract and any entity that may be deemed a substantive employer.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the principal company’s standpoint, even if it does not directly enter into employment contracts with the partner company’s employees, there is a high risk that the Labor Relations Commission will recognize it as an employer if, in reality, it controls and determines matters such as hiring, dismissal, evaluations, and attendance management. In subcontracting/consignment contracts, work instructions should be limited to what is necessary for contract performance, and documentation and actual operations must be aligned so that personnel authority and management of wages and the four major social insurances are exercised through the partner company.
In addition, when changing partner companies or terminating contracts, the principal should clarify in the contract who bears responsibility, and establish an internal compliance system to ensure that the partner company complies with its obligations under the Labor Standards Act, so that the process does not in effect result in the exclusion or dismissal of specific employees.
To prevail in this type of case, it is advisable to have a thorough understanding of judicial precedents and the operational standards of the Labor Relations Commission regarding the criteria for determining employee status and employer status, and to consult with experts such as Labor Law Firm Law& in order to carefully design in advance the issues of standing, evidence structure, and argumentation.
2. Matters Determined
a. Case Overview and Procedural History
The employee argued that the respondent had standing as a party because it issued all work instructions. However, (i) the employee entered into an employment contract with the partner company and never entered into an employment contract with the respondent; (ii) there is no objective evidence that the respondent issued specific work instructions to the employee, and the respondent’s work instructions appear to have been measures for the normal handling of work under the consignment contract rather than directions and supervision in the capacity of an employer under the Labor Standards Act; (iii) wages, employment insurance, and other matters regarding the employee were handled by the partner company; and (iv) the employee also acknowledged the existence of the partner company as a separate entity. In light of all these factors, the respondent is not a proper party to the remedy proceedings…
3. Gist of the Decision
a. Gist of the Labor Relations Commission’s Decision
The employee argued that the respondent had standing as a party because it issued all work instructions. However, (i) the employee entered into an employment contract with the partner company and never entered into an employment contract with the respondent; (ii) there is no objective evidence that the respondent issued specific work instructions to the employee, and the respondent’s work instructions appear to have been measures for the normal handling of work under the consignment contract rather than directions and supervision in the capacity of an employer under the Labor Standards Act; (iii) wages, employment insurance, and other matters regarding the employee were handled by the partner company; and (iv) the employee also acknowledged the existence of the partner company as a separate entity. In light of all these factors, the respondent is not a proper party to the remedy proceedings… /
[More Related Decisions]
- “Unfair Dismissal Decision on ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Decision on ‘Expression of Intent to Resign (Resignation Remarks Made by Telephone)’”
- “Unfair Dismissal Decision on ‘No Formation of Hiring Commitment (Absence of Offer Letter)’” – Decision date: – Case No.: First-instance decision upheld
[Tags]
Unfair dismissal, Standing as a party (subcontracted partner company), Employer status · employee status, 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 Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ You can view the previous article, “Unfair Dismissal Decision on ‘Genuineness of Letter of Resignation (Change from Contract Expiry · Recommended Resignation)’,” in a new window.
※ A list of decisions related to standing as a party (subcontracted partner company) can be found under “List of Decisions Related to Standing as a Party (Subcontracted Partner Company).”
※ Korean version of this case: Korean article
