[1] Requirements for a third party's employee to be employed by the plaintiff employer and engaged in the third party's business at the third party's place of business

[2] The case holding that the judgment below erred in the misapprehension of legal principles, etc. in holding that the subordinate employees of the automobile manufacturing company Gap who engaged in simple and repetitive work with regular workers while engaging in the design process of the automobile assembly and production work conducted by the automatic flow method using the consortium labeling shall be subject to the direct employment deeming provision under the former Act on the Protection, etc. of Temporary Agency Workers in relation to temporary placement with the Gap company

[3] Requirements for the application of the main sentence of Article 6 (3) of the former Act on the Protection, etc. of Temporary Agency Workers (the so-called "direct employment deeming provision"), and whether the provision applies only to "legal temporary agency workers" (negative)

[1] If a person employed by the plaintiff employer and engaged in a third party's work at the place of business, who is employed by the third party's employer, is eligible to be a third party's employee, the plaintiff employer is merely a formal and nominal one that can be deemed to be identical to the third party's labor agency by lacking identity or independence as the business owner. In fact, the relevant defendant is in a subordinate relationship with the third party, and the person who actually pays wages is a third party, and the party who provided labor is also a third party, and thus the relationship of implied labor contract exists between the relevant defendant and the third party.

[2] The case holding that the judgment below erred by misapprehending the legal principles on deeming that the provision on deeming direct employment under the former Act on the Protection, etc. of Temporary Agency Workers (amended by Act No. 8076 of Dec. 21, 2006) is not applicable in relation to temporary placement of workers with Gap company and its employees engaged in simple and repetitive work with regular workers while engaging in the design process of the automobile assembly and production work conducted in the automatic flow method using a consortium mark

[3] The main text of Article 6(3) of the former Act on the Protection, etc. of Temporary Agency Workers (amended by Act No. 8076 of Dec. 21, 2006) provides that “If a user company continues to use a temporary agency worker for more than two years, it shall be deemed that the temporary agency worker is employed from the day following the expiry of the two-year period (hereinafter “direct employment provision”). Such direct employment deeming provision has the meaning that a "temporary agency worker" as defined in subparagraph 1 of Article 2 of the former Act on the Protection, etc. of Temporary Agency Workers has the meaning that a direct employment relationship exists between the user company and the temporary agency worker immediately from the fact that the temporary agency worker continues to exist for more than two years, and thus, the interpretation that the above provision applies only to the so-called "legal temporary agency worker” is without any grounds in light of its language and legislative intent.

[1] Article 2 (1) 1 of the Labor Standards Act / [2] Article 2 (1) 1 of the former Act on the Protection, etc. of Temporary Agency Workers (amended by Act No. 8076 of Dec. 21, 2006) / [3] Article 6 (3) of the former Act on the Protection, etc. of Temporary Agency Workers (amended by Act No. 8076 of Dec. 21, 2006) (see current Article 6-2 (1) 3 and (2))

[1] Supreme Court Decision 2005Da75088 Decided July 10, 2008 / [3] Supreme Court en banc Decision 2007Du22320 Decided September 18, 2008 (Gong2008Ha, 1463)

Plaintiff 1 and one other (Attorney Go Jae-hwan, Counsel for the plaintiff-appellant)

The Chairman of the National Labor Relations Commission

Hyundai Automobile Co., Ltd. (Attorney Il-il et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2007Nu20418 decided February 12, 2008

The part of the lower judgment against Plaintiff 2 is reversed, and that part of the case is remanded to the Seoul High Court. Plaintiff 1’s appeal is dismissed. The costs of appeal by Plaintiff 1, including the part pertaining to Defendant’s participation, are assessed against the said Plaintiff.

The grounds of appeal are examined.

1. As to the establishment of an implied labor contract relationship

If an employee employed by the employer of a third party and employed by the employer of a third party to be an employee of a third party, the employer of a third party is merely a formal and nominal relationship with the labor agency of a third party by lacking identity or independence as the employer. In fact, the relevant employee is in a subordinate relationship with the third party, and the actual payment of wages is a third party, and as the other party to the provision of labor is also a third party, an implied labor contract relationship between the relevant employee and the third party is established (see Supreme Court Decision 2005Da75088, Jul. 10, 2008, etc.).

The lower court rejected the Plaintiffs’ assertion that the existence of an in-house subcontractor in the Ulsan Factory of the Defendant Intervenor (hereinafter “ Intervenor”) who entered into an employment contract with the Plaintiffs cannot be deemed as a formal and explicit purpose to the extent that it can be deemed that the in-house subcontractor in the Ulsan Factory has lost its identity or independence as an employer. On the contrary, the lower court rejected the Plaintiffs’ assertion that an implied employment contract relationship exists between the Plaintiffs and the Intervenor. In light of the aforementioned legal doctrine, the lower court’s determination is justifiable in light of the factual basis recognized by the lower court, and there is no error of misapprehending the legal doctrine as to the establishment of an implied employment

2. As to the establishment and effect of the temporary placement relationship for workers

A. According to Article 2 subparagraph 1 of the former Act on the Protection, etc. of Temporary Agency Workers (amended by Act No. 8076 of Dec. 21, 2006, hereinafter “the Act on the Protection, etc. of Temporary Agency Workers”), “the temporary placement of workers” means “the temporary work agency has a user company engage in work for the user company under the direction and order of the user company in accordance with the terms of the worker temporary agency contract while maintaining the employment relationship after employing the worker.”

(1) According to the facts established by the lower court, the following circumstances are revealed.

① The Intervenor’s vehicle assembly and production work mostly took place by means of automatic flow using consortiums. The Plaintiffs, the employees of the instant intra-company subcontractor, who entered into a contract with the Intervenor, are those engaged in the design process using consortiums.

② The Plaintiffs, as they are placed in combination with the regular employees of the Intervenor at the consortiums left and left, were prepared and delivered by the Intervenor using production-related facilities, parts, expendable goods, etc. owned by the Intervenor, and performed simple and repetitive tasks in accordance with various work instruction ordering the employees to identify the parts, work methods, etc.

③ The Intervenor had the right to make a decision on the general assignment of work and the change to employees of the instant in-house subcontractor, as well as the direct employees thereof. The Intervenor directly directed the Plaintiffs, or issued specific work orders to the Plaintiffs through the field manager, etc. affiliated with the instant in-house subcontractor. This was the same method of work orders even in cases where the Plaintiffs’ erroneous work performance was discovered and need to be corrected. Considering the characteristics of the work performed by the Plaintiffs, even if the on-site manager, etc. of the in-house subcontractor exercised specific command orders to the Plaintiffs, it is merely merely to deliver the matters determined by the contractor, or that such direction orders are controlled by the contractor, etc.

④ For the Plaintiffs and their direct employees, the Intervenor determined the start-up and end-up hours, the grant of recess hours, the extension and night work, the operation of a shift system, the speed of work, etc. Furthermore, the Intervenor had the employees of the in-house subcontractor substitute the vacancy when a vacancy occurs due to industrial accident, temporary retirement, etc. to regular workers.

⑤ The Intervenor, through the in-house subcontractor in the instant case, identified and managed the status of the workers of the in-house subcontractor in the instant case, including the Plaintiffs, and their number of workers.

(2) Examining these circumstances in light of the legal principles as seen earlier, the Plaintiffs were employed by the instant in-house subcontractor and dispatched to the Intervenor’s workplace and received direct labor instructions from the Intervenor.

Therefore, the lower court erred by misapprehending the legal doctrine on temporary placement of workers or failing to exhaust all necessary deliberations, solely based on the circumstances indicated in its reasoning, that it is difficult to view the instant in-house subcontractor as being employed by the Plaintiffs and having them engage in labor for the Intervenor under the direction and order of the Intervenor.

B. Meanwhile, Article 6(3) of the Act on the Protection of Temporary Agency Workers provides that “If a user company continues to use a temporary agency worker more than two years, it shall be deemed that the temporary agency worker is employed from the day following the expiration of the two-year period.” (hereinafter “direct employment deeming provision”).

The provision on deeming direct employment refers to "temporary placement of workers" as defined in Article 2 subparagraph 1 of the Act on the Protection, etc. of Temporary Agency Workers, and the provision on deeming direct employment between the user company and the temporary agency worker is established immediately from the fact that the temporary placement of workers continues for more than two years. Thus, the provision on deeming the above provision to apply only to the case of so-called "legal temporary placement of workers" does not have any grounds in light of its language and legislative intent (see Supreme Court en banc Decision 2007Du22320, Sept. 18, 2008, etc.).

Nevertheless, contrary to the above legal principles, the lower court determined that the Intervenor’s direct employment deeming provision does not apply to the direct employment deeming provision on the ground that the instant worker dispatch was illegal since the Intervenor’s direct production process of the manufacturing business, such as the assembly of automobiles by the Plaintiffs, who are dispatched workers, does not constitute the business permitted by the temporary employment business under Article 5(1) of the Act on the Protection of Dispatched Workers, and the intra-company subcontractor of the instant case also did not obtain permission from the temporary employment business. In so doing, the lower court erred by misapprehending the legal doctrine on the interpretation of the scope

C. Meanwhile, according to the facts acknowledged by the court below, the plaintiff 2, who is acknowledged to be dispatched workers between the intervenor and the intervenor, was employed by the intervenor even after the lapse of two years from March 13, 2002, which is his employee date, and was dismissed from the affiliated intra-company subcontractor on February 2, 2005. Thus, the intervenor shall be deemed to have directly employed the above plaintiff from March 13, 2004 in accordance with the direct employment deeming provision. However, the plaintiff 1, among the intra-company subcontractors of the intervenor on January 1, 2005, is recognized to be dispatched workers between the intervenor and the intervenor, but it was dismissed from the above purification company on February 3, 2005 before the elapse of two years, and therefore there is no room to apply the direct employment deeming provision.

Therefore, by misunderstanding the scope of application of the provision on temporary placement of workers and the provision on deeming direct employment, the lower court’s error that the Intervenor’s decision on the review of this case was lawful because it cannot be deemed as an employer who is the subject of unfair dismissal and unfair labor practices in relation with the Plaintiffs, was erroneous, which affected the conclusion of the judgment in the case of Plaintiff 2, but in the case of Plaintiff 1, who is not subject to the provision on deeming direct employment, did not affect the conclusion of the judgment.

Ultimately, Plaintiff 2’s ground of appeal on this part is with merit, and Plaintiff 1’s ground of appeal is without merit.

3. Therefore, the part of the judgment of the court below against Plaintiff 2 is reversed, and the case is remanded to the court below for a new trial and determination. The appeal by Plaintiff 1 is dismissed, and the costs of appeal by Plaintiff 1 are assessed against the losing party including the part resulting from the defendant's participation. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)