[Case Information] This case is a decision in which the employer prevailed (application dismissed) on the issue of “denial of employee status (registered director · shareholder).” Decision date: 2026-07-28 · Decision body: Jeonbuk Regional Labor Relations Commission · Case No.: 2026Buhae249 Key issues in summary: (i) The worker was a shareholder and registered director of a business other than the respondent, and in light of the nature of the work performed and the working pattern, it was difficult to find that the worker was subject to substantial direction and supervision by the employer; (ii) It was difficult to find that the employer designated, managed, and controlled the worker’s working hours and place of work, or that the worker was subject to and worked under the company’s rules of employment or service (personnel) regulations; (iii) It was difficult to view the worker as having continuously and exclusively provided labor to the workplace … 1. Legal Implications Ⅰ. Case Overview In this case, the applicant filed a relief application with the Labor Relations Commission alleging unfair dismissal by the employer. However, the Jeonbuk Regional Labor Relations Commission dismissed the application on the ground that the applicant was not an employee under the Labor Standards Act. The applicant, while serving as a shareholder and registered director of a business other than the respondent, received certain remuneration in the course of transactional relations with the employer and claimed that this was wages paid as consideration for labor. The Labor Relations Commission examined whether an employment–subordination relationship could be recognized, focusing on the applicant’s employee status, by comprehensively reviewing the content and manner of performance of the work, the nature of the remuneration, and the working pattern. Ⅱ. Issues The issue in this case is whether, in circumstances where the applicant, as a shareholder and registered director of a business other than the respondent, received remuneration in the course of transactional relations with the employer, the applicant can be regarded as an employee under the Labor Standards Act and thus be a proper party to an unfair dismissal relief application. Ⅲ. Summary of the Labor Relations Commission’s Decision The panel in this case noted that the applicant held the status of shareholder and registered director of a business other than the respondent; that, in light of the nature of the work performed and the working pattern, it was difficult to find that the applicant provided labor in a subordinate manner under substantial direction and supervision by the employer; and that it was difficult to recognize that the employer designated and managed the applicant’s working hours and place of work or controlled the applicant through rules of employment or service (personnel) regulations. In addition, it was difficult to view the applicant as having continuously and exclusively provided labor to the workplace, and it was more reasonable to regard the remuneration paid as consideration for transactions between the business other than the respondent and the employer, rather than as wages paid as consideration for labor itself. On this basis, the panel held that the dismissal in this case was imposed on a person who is not an employee under the Labor Standards Act and therefore cannot be the subject of unfair dismissal relief procedures. Ⅳ. Practical Points (From the Employee’s Perspective) To obtain relief for unfair dismissal, it is essential that the Labor Relations Commission first recognize the applicant’s status as an employee under the Labor Standards Act. In particular, where a person formally holds a status other than that of “employee,” such as shareholder, registered director, freelancer, or independent contractor, it is important to secure sufficient evidence of indicia of subordination—such as control over working hours and place of work, application of rules of employment, existence of direction and supervision, exclusivity, and the nature of the remuneration. When consulting with experts such as Labor Law Firm Law&, it is highly helpful for recognition of employee status by the Labor Relations Commission to organize and present not only the contract but also actual work instruction emails, attendance records, HR and evaluation materials, records of enrollment in the four major social insurances, and tax treatment details in a comprehensive manner. Ⅴ. Practical Points (From the Employer/Company Perspective) From the company’s perspective, in relationships with shareholders and registered directors, independent contractors, freelancers, and similar parties, it is necessary to ensure that employee status under the Labor Standards Act does not arise in substance, by clearly distinguishing not only the contractual form but also the actual operation in terms of direction and supervision, control over working hours and place of work, and application of rules of employment. It is also important for dispute prevention to consistently design and document the basis for calculating remuneration and its tax treatment (business income, dividend income, etc.) so that remuneration paid as consideration for transactions is not mixed with wages paid as consideration for labor. When proceeding with termination of contracts or suspension of transactions that have effects similar to collective redundancies or personnel measures, the company should, in advance, review the possibility that the counterparty may assert employee status, and, together with experts such as Labor Law Firm Law&, assess the factors relevant to determining subordination and respond strategically so that the matter does not escalate into an unfair dismissal dispute. 2. Matters Decided A. Case Overview and Procedural History A case in which it was decided that the applicant did not fall within the definition of an employee under the Labor Standards Act. 3. Gist of the Decision A. Summary of the Labor Relations Commission’s Reasoning (i) The worker was a shareholder and registered director of a business other than the respondent, and in light of the nature of the work performed and the working pattern, it was difficult to find that the worker was subject to substantial direction and supervision by the employer; (ii) it was difficult to find that the employer designated, managed, and controlled the worker’s working hours and place of work, or that the worker worked under and was subject to the company’s rules of employment or service (personnel) regulations; (iii) it was difficult to view the worker as having continuously and exclusively provided labor to the workplace; and (iv) it was more reasonable to regard the remuneration received by the worker, not as wages paid as consideration for the provision of labor, but as consideration for transactions between the business other than the respondent and the employer during the period when the worker served as a registered director of that business. In light of all these circumstances, it was difficult to regard the worker as an employee under the Labor Standards Act who provides labor for the purpose of receiving wages in an employment–subordination relationship. [See More Related Decisions] - “Unfair Dismissal Decision on ‘Relief Interest · Refusal to Rehire (Post-Retirement Fixed-Term Employment)’” - “Unfair Dismissal Decision on ‘Business Necessity (Reassignment of Cleaning Staff)’” - “Unfair Dismissal Decision on ‘Expectation of Employment Succession (Competitive Bidding for Logistics Center)’” [Tags] Unfair dismissal, denial of employee status (registered director · shareholder), 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. ※ The previous article, “Unfair Dismissal Decision on ‘Non-Existence of Expectation of Renewal (Project-Based Fixed-Term Employment)’,” can be viewed in a new window. ※ A list of decisions related to denial of employee status (registered director · shareholder) can be found in the “List of Decisions Related to Denial of Employee Status (Registered Director · Shareholder).” ※ Korean version of this case: Korean article