Plaintiff 1 and 34 others (Attorneys O Dong-dong, Counsel for the plaintiff-appellant)

Samsung C&T Co., Ltd. (Law Firm Sejong, Attorneys Kim Jong-tae et al., Counsel for the plaintiff-appellant)

May 24, 2018

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The defendant shall pay to the plaintiffs 20% interest per annum of 20% interest per annum from each corresponding day to the day of full payment of each of the amounts stated in the "amount of retirement based on the average wage of 12 months before retirement" as stated in the attached Form.

1. Basic facts

A. The Defendant engaged in the manufacture, sale, etc. of clothing products under the trade name of “Sturland Co., Ltd.,” and changed the trade name on July 4, 2014 to “Sturry parent Co., Ltd.,” and on September 2, 2015, merged Samsung C&T Co., Ltd. and changed its trade name to “Strysan Co., Ltd., Ltd.,” (hereinafter “Defendant” regardless of the mutual change and merger).

B. In order to sell the clothing products produced by the Defendant, the Defendant entered into a sales contract with the department stores operating companies, such as lot shopping, new world, and Hangalian, or a week 1) or a week 2). The Defendant dispatched the Defendant’s regular employees to the stores in the department stores to sell the goods. Since 1999, the Defendant entered into a sales contract with the Defendant’s stores in the department stores and entered into a sales contract with the sales managers and made the sales managers perform the above sales management and sales of the goods.

C. The Plaintiffs entered into a consignment contract with the Defendant to the effect that the Plaintiffs would operate the above store and sell the Defendant’s goods at the Defendant’s store in the department store, and receive a certain percentage of commission fees from the Defendant for sales performance (hereinafter “fee”). From each of the above corresponding dates, the Plaintiffs performed their duties as a sales manager who sells the goods within the above store, and completed the sales business on each of the corresponding dates as stated in the attached “the date of completion of the business.”

D. Although there is a somewhat different difference between the consignment contract entered into with the plaintiffs and the defendant, the contents of the consignment contract are the same as a substitute, and the main parts are as follows (the following consignment contract was entered into between the plaintiff 1 and the defendant, and the plaintiff 1 and the defendant are named as the plaintiff 1 and the defendant).

Article 1 (Purpose and Details)

① The purpose of this contract is to sell goods owned by the Defendant and sell related sales at the Defendant’s store and sales store, under the responsibility of the Plaintiff, and to pay the fees corresponding thereto to the Plaintiff (hereinafter omitted).

Article 2 (Term of Contract)

(1) A contract period shall start from a slope and the extension of the future contract period shall be made by a separate agreement and a contract on a six-month basis.

(2) Where each party fails to express to the other party his/her intention to terminate the contract no later than 15 days prior to the expiration of the contract term, this contract shall be automatically extended for six months under the same conditions: Provided, That where the plaintiff requests the change of the contract to the defendant, the change of the store may be made under a mutual agreement between both parties (hereinafter

Article 3 (Payment of Fees)

① The Defendant shall pay a certain amount of the actual sales (including value added taxes) of the goods sold in the store to the Plaintiff as monthly consignment commission fees (hereinafter referred to as “value added tax”).

Article 4 (Supply of Goods)

(1) The kinds and quantities of supplied goods (hereinafter referred to as "goods") among the matters related to goods shall be determined by the defendant.

(2) The place of delivery of commodities shall be the warehouse attached to the store or store, and the cost of transportation to the place of delivery shall be borne by the defendant: Provided, That other expenses, such as cost of transportation between stores, shall be

Article 7 (Sale of Goods)

(1) The Plaintiff shall observe the Defendant’s business policies, etc. in selling goods and observe the statutes, such as the Fair Trade Act.

(2) The Plaintiff shall not sell goods or sell all goods other than those supplied by the Defendant without the prior written consent of the Defendant at a place (including Internet sales) other than that under the prior contract with the Defendant.

(3) The plaintiff shall comply with the defendant's criteria for consumer protection and other sales matters, including A/S (hereinafter referred to as "abus").

Article 8 (Price of Goods)

① The Plaintiff shall sell goods at the price determined by the Defendant.

(2) The plaintiff shall not sell at a voluntary price contrary to the provisions of the preceding paragraph, and shall not sell at a discount without prior written consent.

Article 12 (Management of Selling Board)

(1) The Plaintiff shall manage the level of services of salespersons by providing them with education on kind services, sales techniques, product knowledge, store management, etc. meeting the image of the Defendant and the Defendant’s products.

(2) Sales clerks shall directly employ the Plaintiff and prepare a written employment contract, and bear the burden of the Plaintiff’s employer’s responsibility under the Labor Relations Act, such as wages, legal allowances, and retirement allowances. The Plaintiff shall conduct ethical management as the Defendant’s sales business, and in particular, shall purchase four-party insurance (medical insurance, national pension, employment insurance, and industrial accident insurance) for the sales employees employed by the Plaintiff (hereinafter omitted).

Article 13 (Management of Burials)

① The Plaintiff shall manage the store with due care as a good manager.

(2) Burial equipment decorations shall be conducted in accordance with the defendant's regulations, such as brandability, marketing, and provision of images.

(3) The expansion, renovation, repair, or addition of burials and fixtures shall obtain prior consent from the defendant, and the expenses incurred after such consent shall be borne by the defendant.

Article 14 (Advertisements, Publicity, and Promotional Activities)

(1) When the plaintiff implements an advertisement, display, etc. to promote the sale of goods, he/she shall comply with the defendant's standards, and cooperate in the defendant's sale and promotional advertising.

(2) The plaintiff shall obtain prior consent from the defendant when he/she intends to make an individual advertisement or publicity to promote sales.

(3) Where it is necessary to share the expenses incurred in conducting advertisement, publicity and promotional activities for the business activities of the defendant or the plaintiff, the mutual agreement shall be made between them, and if no other agreement is reached, they shall be equally divided

Article 15 (Management of Products)

① The Plaintiff shall keep and sell the goods owned by the Defendant with due care as a good manager.

(2) Except as a result of normal business activities, the Plaintiff shall not remove any product out of the store without the Defendant’s prior written consent.

(3) The plaintiff shall keep and preserve the inventory details of the goods in detail as determined by the defendant, and shall present them to the defendant upon the defendant's request.

(4) The defendant, if necessary, may conduct a inventory inspection, and the plaintiff shall cooperate without delay with the defendant.

Article 16 (Return and Transfer of Goods)

(2) If necessary, such as expansion of sales, the defendant may request goods owned by the defendant to be operated between stores.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

2. Summary of the parties' arguments;

A. The plaintiffs

Since the Plaintiffs did not receive retirement allowances even after they retired from the Defendant as the workers who provided labor under the direction and supervision of the Defendant, the Plaintiffs sought payment of each retirement allowance and damages for delay indicated in the “retirement Amount based on the average wage of 12 months before the retirement” as stated in the attached Form against the Defendant.

B. Defendant

The Plaintiffs are independent business operators who, by concluding a consignment contract with the Defendant, employ workers themselves and sell the goods of the Defendant, and do not constitute workers under the Labor Standards Act, since they do not receive specific command and supervision from the Defendant.

3. Whether the plaintiffs are workers under the Labor Standards Act

A. Relevant legal principles

Determination of whether a worker is a worker under the Labor Standards Act ought to be based on whether the form of a contract is an employment contract or a delegation contract, and whether a labor provider provided labor in a subordinate relationship with an employer for the purpose of wages at a business or workplace ought to be made. Determination of whether a labor provider is a subordinate relationship ought to be made by comprehensively taking account of the economic and social conditions such as the employer’s provision of labor and the degree of the existence of the continued provision of labor relationship and the exclusive status of an employer, and whether the employer is subject to considerable command and supervision during the performance of duties, whether the employer is subject to designation of working hours and working place, whether the employer is bound by the employer, whether the employer is capable of operating his/her own business on his/her own account, such as the purchase of equipment, raw materials, working tools, etc., the creation of profit and loss caused by the provision of labor, whether the nature of remuneration has been determined, and whether the employer was aware of the status of an employee as an employee under the Act on Social Security System (see, e.g., Supreme Court Decision 2015Da1616.

B. Determination

1) Each of the following facts may be acknowledged either as a dispute between the parties or as a whole by taking into account the respective entries and the purport of the whole pleadings as stated in Gap's Evidence Nos. 1 through 21, 24 through 38, 40 through 44, 46, 47, 50, 54, 55, 56, 58, and Eul's Evidence Nos. 3, 4, 5, 9, 13, 14, 15 (including each number):

A) The Defendant, like the Plaintiffs, operated the Defendant’s store located in the department store, concluded a consignment contract by inviting sales managers to take charge of sales of goods and inventory management, and continued the contractual relationship by renewed the consignment contract on a six-month basis, and operated the Defendant’s store in the department store by way of re-raising sales managers who operate the store and concluding a consignment contract with the sales store managers if they did not renew the consignment contract.

B) The Defendant paid the fees to the Plaintiffs based on the sales performance, and the fee rate determined at the time of concluding the consignment sale contract is not the same as the Plaintiff, and the amount of the fees received by the Plaintiffs was monthly difference not only between the Plaintiffs but also based on the sales performance, and the Defendant did not have an upper or lower limit on the fees paid to the Plaintiffs.

C) The Plaintiffs reported to the Defendant on a regular basis the sales agency’s work, week, monthly sales status, and cumulative sales status. In the event that the sales agency shows poor performance, the Plaintiffs reported specific reasons for the low sales performance and the plan to revitalize sales to the Defendant. Meanwhile, the Defendant assessed the Plaintiffs’ sales performance each year, and paid additional piece rates in addition to the commission stipulated in the consignment contract if the Plaintiffs exceeded the sales target.

D) The Plaintiffs sold goods at the prices designated by the Defendant, and the Defendant followed the event at a discount rate set and held that the event was held. The Plaintiffs could not sell goods at a discount rate or set a discount rate.

E) The Defendant specifically instructed the Plaintiffs to display their products at the store, and also demanded the Plaintiffs to photograph and report the product display photographs in order to verify whether the Plaintiffs implemented them.

F) The Plaintiffs ordinarily worked in the store during the business hours of the department store, and the Plaintiffs’ working hours were set according to the business hours of the department store, and the employees working at the Defendant’s head office together with the Plaintiffs’ leave schedule, but did not separately control the Plaintiffs’ leave.

G) The Defendant conducted education and briefing meetings for the Plaintiffs, such as a sales strategy meeting and a major store conference, etc., and delivered instructions on the sales of goods to the Plaintiffs at the aforementioned education and briefing sessions.

H) The Plaintiffs were provided free of charge by the Defendant with such equipment as Manning, packing materials, tables, radio sponsers, etc. In the event that the Plaintiffs did not conclude a re-contract after the termination of the consignment contract with the Defendant, the said equipment was transferred to the successors of the stores in which the Plaintiffs worked.

I) The Defendant, using the internal computer network, mobile phone message, and Messenger, sent the notification and instruction related to the business to the Plaintiffs and received a report.

(j) The Plaintiffs directly employed sales workers under their own name and paid wages to sales workers on their own account. The Plaintiffs independently decided or managed such sales workers’ employment, employment conditions, leave use, commuting, etc. without the involvement of the Defendant.

C) The Defendant’s employment rules and personnel regulations did not apply to the Plaintiffs.

(l) The Plaintiffs paid the business income tax after registering the business under their names. The Plaintiffs did not subscribe to the National Health Insurance, National Pension Insurance, Employment Insurance, and Industrial Accident Compensation Insurance, whose place of business covers the Defendant.

2) In light of the aforementioned legal principles, the following circumstances revealed by comprehensively considering the overall purport of the pleadings in each of the above facts acknowledged and Gap evidence Nos. 22, 45, 52, 53, and Eul evidence Nos. 6, 7, 11, 12, 26, and 39 (including various numbers), are insufficient to consider the following circumstances as constituting a worker under the Labor Standards Act who provided labor in a subordinate relationship for the purpose of wages, and there is no other evidence to support them.

A) Among the plaintiffs, those who have been employed and worked as the full-time employees of the defendant are limited to 12 persons, including plaintiffs 1, 2, 5, 6, 10, 12, 13, 19, 22, 23, 24, and 35. Among them, only four persons, including plaintiffs 2, 10, 23, 23, and 19, who entered into a consignment contract with the defendant immediately after the withdrawal from the defendant, are limited to four persons, including plaintiffs 2, 10, 23, and 19, and there is no evidence that the plaintiffs who worked as the full-time employees of the defendant were forced by the defendant to be a sales manager.

B) Although the consignment contract concluded on July 1, 199 by the Defendant and the Plaintiff 23 included the content that the Defendant would pay the fixed amount to the Plaintiff 23, it is the form of the contract that the Defendant temporarily concluded in the process of converting the method of operating the store in the department store to the consignment sale, and it seems that there is no case where the Defendant would pay the fixed amount to the store managers, such as the Plaintiffs. Meanwhile, since the Plaintiffs paid the fixed amount with the commission paid by the Defendant, it is difficult to recognize that the said commission has the nature that the Plaintiffs provided the Defendant with labor.

C) The Defendant also notified the Plaintiffs with poor sales performance that they need not renew a consignment contract if they request the Plaintiffs to formulate and submit a plan to revitalize sales or continuously progress sales performance. However, on the other hand, the Defendant paid additional piece rates to the Plaintiffs with excellent sales performance in order to enhance the Plaintiffs’ sales performance. As long as the Plaintiffs’ sales performance is directly related to the Defendant’s revenues, it is difficult to view that the Defendant issued a direction to enhance the sales performance to the Plaintiffs.

D) The Defendant determined the price of the goods to be sold by the Plaintiffs and prevented the Plaintiffs from selling at will, and ordered the Plaintiffs to specify the method of displaying the goods, but the Defendant’s measure seems to be due to the need to maintain the unity of the Defendant’s brand and manage the same goods at all stores selling the Defendant’s goods at the same price.

E) The Plaintiffs’ working hours are only the hours to be observed in relation to the department stores, and the Defendant did not control the Plaintiffs’ specific commuting time or set rest time, and the Defendant’s employees at the Defendant’s head office did not regularly check the Plaintiffs’ work attendance time. Moreover, it is merely a requirement for the Defendant’s head office employees to visit the stores operated by the Plaintiffs to check whether the stores are normally operated and to maintain the Defendant’s brand value, and it is also possible for the Plaintiffs to view personal work by leaving the stores to the sales employees employed by the Plaintiffs without having to permanently reside in the stores.

F) The Defendant’s implementation of education and liver meetings for the Plaintiffs can be deemed to have been conducted for the purpose of securing the unity of brand and enhancing the understanding and sales performance of the Plaintiffs’ products in that the products sold by the Plaintiffs are products manufactured by the Defendant.

G) Although the Defendant voluntarily withdrawn the so-called “theme” measure such as ordering the Plaintiffs to send a specific inventory of the store operated by the Plaintiffs to another store, the products supplied to the Plaintiffs’ stores still have ownership and disposal rights to the Defendant, and the Defendant needs to manage the products supplied to each store in a timely manner so that they can not remain in inventory. Therefore, it is difficult to evaluate that the Defendant has given specific direction and supervision to the Plaintiffs.

H) Even if the Defendant’s head office employee requested the Plaintiffs to meet the adequate number of sales employees (TO), it is deemed that the Defendant calculated the reasonable number of sales employees to serve in each store, and determined fee rates in consideration of the number of sales employees calculated as above. The Defendant did not directly participate in the recruitment of sales employees.

I) There is no evidence to deem that there was no direct disadvantageous measure against the Plaintiffs, such as the Defendant’s cancellation of a consignment contract during the contract period, or modification of the store in charge, solely on the ground that the Plaintiffs’ sales performance was poor or the Plaintiffs failed to perform the design without attending the education and liver conference.

(j) Among the sales managers such as the Plaintiffs, there was a case where the Fair Trade Dispute Mediation Council applied for a fair trade dispute mediation against the Defendant as equal business operators, and there was also a case where the sales managers, including the Plaintiffs, established a self-business corporation, and conducted a consignment sale business. It seems that they did not have the awareness that they provided labor to the Defendant in a subordinate relationship.

(k) The defendant, unlike the plaintiffs, has a difference between the plaintiffs, in terms of ① additional piece rates to agents who have presented sales targets and made sales contracts with the defendant, and ② to agents with excellent sales performance, ② to provide guidelines on the display of goods, ③ to provide education and simplified meetings, ④ management methods for the plaintiffs and agents are not significantly different. In the case of the plaintiffs, there are differences in that there are parts under the control of the company operating the department store because they sell the defendant's goods at the department store, and it is difficult to evaluate that the plaintiffs provided labor to the defendant in subordinate relationship, unlike the individual agents.

4. Conclusion

Therefore, since the plaintiffs' claims are without merit, all of them are dismissed. It is so decided as per Disposition.

[Attachment]

Judges Lee Jae-soo (Presiding Judge) Kim Jong-tae or Kim

1) The method by which a clothing products supplier rents a certain space of the department stores from the department stores operating companies, receives and compiles sales proceeds, and then pays the remainder of sales proceeds after deducting rents to the department stores.

2) The sales and operation method in which the department store operating company purchases clothing products on credit from the garment product suppliers, sells them from the department store, and pays the remaining amount after deducting the fee from the sales revenue to the garment product suppliers.