This case concerns a decision that was procedurally dismissed at the stage of examining the “employee headcount requirement (registration of employer’s family member).” Date of Decision: 2026-09-11 · Decision Body: Gyeongnam Regional Labor Relations Commission · Case No.: 2026Buhae664 Key Issue Summary: The employer stated that Ryu ○‑hoon oversaw the workplace’s operations focusing on HR and accounting and exercised final decision-making authority. The internal approval documents of the workplace bore Ryu ○‑hoon’s seal in the “President” field, and employees testified that they referred to him as “President.” In light of these facts, it appeared that Ryu ○‑hoon was involved in the operation of the workplace. Although he was listed on the wage ledger, the employer’s remuneration can also be processed in the form of salary for accounting and tax purposes, and enrollment in the four major social insurances is only one factor in determining employee status under labor law… 1. Legal Implications In this case, an application for relief from unfair dismissal was filed, but the Labor Relations Commission held that the number of regular employees at the workplace was fewer than five, and therefore the case did not fall within the scope of the Labor Standards Act provisions on relief from unfair dismissal. As Labor Law Firm Law& frequently encounters in practice cases where the calculation of the number of regular employees and the question of whether a “president is also an employee” are at issue, it is important to have an accurate understanding of the relevant legal principles. Ⅰ. Case Overview The employer argued that, because the workplace had fewer than five regular employees, it was not a workplace subject to applications for relief from unfair dismissal under the Labor Standards Act. The applicant countered that, if Ryu ○‑hoon, who was in charge of HR and accounting, were included as an employee, the number of regular employees would exceed five. The Gyeongnam Regional Labor Relations Commission therefore examined the standing of the parties and the availability of relief, focusing on the number of regular employees during the one-month period preceding the date of dismissal. Ⅱ. Issues The issue in this case is whether “Ryu ○‑hoon, who oversaw HR and accounting and was referred to as ‘President,’ can be included as an employee under the Labor Standards Act so that the number of regular employees can be regarded as five or more, and thus whether the requirement of a ‘workplace regularly employing five or more employees,’ which is a precondition for an application for relief from unfair dismissal, is satisfied.” Ⅲ. Summary of the Labor Relations Commission’s Reasoning The panel in this case noted that the employer had stated that Ryu ○‑hoon oversaw the workplace’s operations focusing on HR and accounting and exercised final decision-making authority; that Ryu ○‑hoon’s seal was affixed in the “President” field on internal approval documents; and that employees consistently referred to him as “President.” In light of these facts, it appeared that Ryu ○‑hoon was involved in the operation of the workplace. Although he was listed on the wage ledger, the employer’s remuneration can also be processed in the form of salary for accounting and tax purposes, and whether a person is enrolled in the four major social insurances is only one factor in determining employee status and does not, in itself, conclusively establish that the person is an employee under the Labor Standards Act. Accordingly, Ryu ○‑hoon should be regarded as an employer involved in the operation of the workplace, and in the absence of objective evidence to the contrary, the number of regular employees employed during the one-month period prior to the dismissal should be regarded as four, excluding Ryu ○‑hoon. Therefore, as the workplace does not fall under a “business or workplace employing five or more employees on a regular basis” as provided in Articles 11 and 10 of the Labor Standards Act, there was no need to examine the remaining issues relating to unfair dismissal that presuppose a workforce of five or more regular employees. Ⅳ. Practical Points (From the Employee’s Perspective) Because the statutory system for relief from unfair dismissal under the Labor Standards Act, in principle, applies only to workplaces with five or more regular employees, it is important to first confirm whether your workplace meets this requirement before contesting a dismissal. Even if a person who oversees HR and accounting or is called “President” is listed on the wage ledger and enrolled in the four major social insurances, if that person has in fact been involved in management and has exercised final decision-making authority, he or she may not be recognized as an employee and may be excluded from the calculation of the number of regular employees. If you are preparing to seek relief from unfair dismissal in a similar situation, you should organize in advance evidence that can prove the substantive relationship of subordination as an employee—such as the chain of command and supervision, the giving and receiving of work instructions, and the actual decision-making structure—rather than relying solely on titles or modes of address. Ⅴ. Practical Points (From the Employer/Company’s Perspective) From the employer’s perspective, the calculation of the number of regular employees is directly linked to the applicability of the Labor Standards Act and, further, to the possibility of applications for relief from unfair dismissal. It is therefore necessary to understand and manage accurately the calculation criteria established by statutes and case law (such as the total number of employee-days during the one-month period preceding the date on which the Act becomes applicable, daily headcount, and whether day laborers are included). In particular, where a person who in substance participates in management as “President” or as a de facto employer is, in formal terms, treated as an employee in documents such as the wage ledger, you should maintain systematic records of internal approval lines, authority structures, and decision-making records so that you can clearly explain that person’s status and role in the event of a future dispute. In addition, even if a workplace has fewer than five regular employees, dismissal is not entirely at the employer’s discretion. General principles such as the principle of good faith under the Civil Act and the prohibition of abuse of rights under the employment contract may still apply. Accordingly, the legitimacy of the grounds and procedures for dismissal should be thoroughly reviewed in advance. 2. Matters Decided a. Case Overview and Procedural History This is a case in which it was decided that the workplace was not subject to applications for relief from unfair dismissal under the Labor Standards Act because the number of regular employees was fewer than five. 3. Gist of the Decision a. Summary of the Labor Relations Commission’s Reasoning The employer stated that Ryu ○‑hoon oversaw the workplace’s operations focusing on HR and accounting and exercised final decision-making authority. In light of the facts that Ryu ○‑hoon’s seal was affixed in the “President” field on internal approval documents and that employees testified that they referred to him as “President,” it appears that Ryu ○‑hoon was involved in the operation of the workplace. Although he was listed on the wage ledger, the employer’s remuneration can also be processed in the form of salary for accounting and tax purposes, and whether a person is enrolled in the four major social insurances is only one factor in determining employee status and does not, in itself, conclusively establish that the person is an employee under the Labor Standards Act. Taking these points together, and in the absence of objective evidence to the contrary, it is reasonable to regard the number of regular employees employed at the workplace during the one-month period preceding the date of dismissal as four, excluding Ryu ○‑hoon. Therefore, there is no need to further examine the remaining issues that presuppose that the number of regular employees is five or more. [See More Related Decisions] - “Unfair Dismissal Decision on ‘Relief Interest · Refusal to Rehire (Post-Retirement Fixed-Term Employment)’” - “Unfair Dismissal Decision on ‘Disciplinary Severity (Participation in Services for Another Institution)’” - “Unfair Dismissal Decision on ‘Expectation of Employment Succession (Competitive Bidding for Logistics Center)’” [Tags] Unfair dismissal, employee headcount requirement (registration of employer’s family member), 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&. ※ You can view the previous article, “Unfair Dismissal Decision on ‘Expectation of Renewal (Internal Recruitment Fixed-Term Employee with More Than Three Years Remaining Until Mandatory Retirement)’,” in a new window. ※ A list of decisions related to the employee headcount requirement (registration of employer’s family member) can be viewed together at “List of Decisions Related to Employee Headcount Requirement (Registration of Employer’s Family Member).” ※ Korean version of this case: Korean article