[1] Standard for determining whether an employee is a worker under the Labor Standards Act

[2] In a case where Gap et al. entered into an entrustment contract with Eul et al. as a debt collection company, and hold concurrent office in another workplace while serving as a debt collection agency, and the issue was whether Gap et al. can be deemed as Eul et al.'s employee even during the same period of income earned from Eul et al. other than Eul for the same period of time, the case holding that it is reasonable to view Gap et al. as the employee of Eul et al. as the employee of the company

[3] In a case where the average wage calculated in accordance with the principle stipulated in the Labor Standards Act, etc. is significantly less or more than ordinary wage due to changes in the amount of wages due to special and incidental circumstances during a certain period of time for which an employee retires, whether the average wage should be separately calculated by a reasonable and reasonable method that can reflect the ordinary living wage (affirmative)

[1] Determination of whether a contract constitutes a worker under the Labor Standards Act ought to be based on whether the substance of a labor relationship 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 wage at the workplace. Determination of whether a subordinate relationship exists should be made by comprehensively taking account of the following: (a) the employer’s content of work is determined; (b) the employer is subject to rules of employment or service regulations; (c) the employer designates working hours and working places; and (d) the employer is bound by the employer; (d) whether the employer is capable of operating his/her business on his/her own account; (e) whether the employer voluntarily owns equipment, raw materials, working tools, etc.; (e) whether the employer has a risk, such as the creation of profit and loss by the provision of labor; (e) whether the nature of remuneration is the subject of the labor itself; (e) whether the basic wage or fixed wage was determined; and (e) whether or not the continued provision of labor relationship and exclusive status of the employer; and (e) whether

[2] In a case where Gap et al. entered into an entrustment contract with Eul et al., a debt collection company, and concurrently held office in other workplace while serving as a debt collection company, and the issue was whether Gap et al. can be seen as Eul's employee even when "the period during which Gap et al.'s income earned from other workplace than Eul et al. is more than 50% compared with the income earned from Eul et al. for the same period", the case held that the court below erred in the misapprehension of legal principles as to whether Gap et al.'s employment contract still remains valid since the circumstance that Gap et al. earned a considerable amount of income from other workplace than Eul et al. is merely a part of the circumstances considering the substance of the employment relationship, and it is difficult to find a reasonable ground to view that Gap et al.'s employment relationship accounts for more than 50% compared with the income earned from Eul et al. for the same period.

[3] Even if the average wage was calculated in accordance with the principle stipulated in the Labor Standards Act and the Enforcement Decree of the Labor Standards Act, there was a change in the amount of wage due to the special and incidental circumstances for a certain period of time that the employee retires, and thus, in exceptional cases where it is deemed that the average wage calculated as above is significantly less or more reasonable than ordinary cases when comprehensively assessing all the circumstances, including the total period of work, the period of time when the amount of wage changes, the amount of wage changes, and the degree of change in the amount of wage, etc., the calculation of the retirement allowance based on such exceptional circumstances is not permissible in light of the spirit of the Labor Standards Act that intends to calculate the retirement allowance based on the ordinary daily wage of the employee. Therefore, the average wage should be separately calculated in a reasonable and reasonable way that can reflect the ordinary daily wage of the employee. However, if the average wage of the employee is significantly less or less than ordinary wage as above, the average wage should be calculated in accordance with the principle

[1] Article 2 (1) 1 of the Labor Standards Act / [2] Article 2 (1) 1 of the Labor Standards Act / [3] Article 2 (1) 6 of the Labor Standards Act, Article 8 (1) of the Guarantee of Workers' Retirement Benefits Act

[1] [3] Supreme Court Decision 2009Da99396 Decided April 15, 2010 (Gong2010Sang, 890) / [1] Supreme Court Decision 2004Da29736 Decided December 7, 2006 (Gong2007Sang, 104) Supreme Court Decision 2018Da229120 Decided April 29, 2020 (Gong2020Sang, 970)

See Attached List of Plaintiffs (Law Firm EM Partners, Attorneys Park Jong-chul et al., Counsel for the plaintiff-appellant)

Brazil Capital and World Loan Co., Ltd. (Law Firm LLC, Attorneys Kim Dong-dong et al., Counsel for the plaintiff-appellant)

Seoul Central District Court Decision 2017Na63261 Decided October 30, 2018

1. The part of the judgment of the court below against Plaintiffs 4, 6, and 7 is reversed, and that part of the case is remanded to the Seoul Central District Court.2. A. The appeals by Plaintiffs 1, 2, 3, and 5 and all appeals by the Defendant against the above Plaintiffs are dismissed. (b) The costs of appeal by the above Plaintiffs among the costs of appeal between Plaintiffs 1, 2, 3, and 5 and the Defendant are assessed against the above Plaintiffs, and the costs of appeal by the Defendant are assessed against the Defendant.

The grounds of appeal are examined.

1. Determination as to whether or not a worker is recognized or lost under the Labor Standards Act

A. Determination as to whether a labor contract constitutes a worker under the Labor Standards Act ought to be based on whether a labor provider provided labor in a subordinate relationship with an employer for the purpose of wages at a workplace, rather than whether a contract is an employment contract or a delegation contract. Determination of whether a labor relationship is subordinate to the above should be made by comprehensively taking into account the economic and social conditions such as the employer’s determination of the content of work and the application of rules of employment or service regulations, etc. In the process of performing duties, whether the employer is subject to considerable direction and supervision by the employer, whether the employer is designated working hours and working place, whether the employer is bound by the employer, whether the employer is capable of operating his/her business on his/her own account, such as possessing equipment, raw materials, working tools, etc. or having a third party perform by proxy, whether the risks, such as the creation of profits and losses through the provision of labor, whether the nature of remuneration is the object of work itself, whether the basic wage or fixed wage was determined, whether the continuous provision of labor relations and the degree thereof are exclusive to the employer, and whether the status of the social security system is recognized (see, etc.

B. The judgment of the court below

The lower court: (a) recognized that the Plaintiffs, as grounds for debt collection, provided labor to the Defendant in a subordinate relationship for the purpose of wages; (b) rejected the Defendant’s assertion that the Plaintiffs cannot be deemed as the Defendant’s employee after the Plaintiffs started to hold a concurrent office on or after November 2012; (c) determined that the Plaintiffs cannot be deemed as the Defendant’s employee during the period in which the Plaintiffs occupy more than 50% of the income derived from the Defendant’s income

C. Judgment of the Supreme Court

1) The defendant's ground of appeal No. 1

Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the record, the lower court did not err in its judgment in misapprehending the legal doctrine regarding the recognition of employee status under the Labor Standards Act, or exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules

2) Determination on the allegation in the grounds of appeal regarding the worker status of Plaintiffs 4, 6, and 7

A) However, it is difficult to accept the judgment of the court below on the part above (2) for the following reasons.

(1) The circumstance that the above plaintiffs earned a considerable amount of income in other workplaces than the defendant is nothing more than a part of the circumstances to be considered when considering the substance of the labor relationship. Whether the above plaintiffs occupy a percentage of 50% or more compared to the income earned from the defendant in other workplaces than the defendant during the same period or not, in determining the substance of the labor relationship, it is difficult to find a reasonable ground to regard the above plaintiffs as the daily standard when determining the substance of the

(2) In addition to the above plaintiffs' concurrent income size, there is no reason to deem that the above plaintiffs' method of performing their duties and the defendant's mode and degree of direction and supervision are substantially changed to the extent that it can decide whether to recognize the worker status, except for the above plaintiffs' concurrent income size.

(3) Meanwhile, there is no evidence suggesting that the labor contract relationship between the above plaintiffs and the defendant was effectively resolved through dismissal or termination of agreement before and after the dismissal of the above plaintiffs' worker status was denied.

(4) Ultimately, it is reasonable to view the above plaintiffs as the workers of the defendant, even during the period in which the above plaintiffs occupy more than 50% of the income derived from other workplaces than the defendant in the same period as the income earned from the defendant.

B) Therefore, the lower court erred by misapprehending the legal doctrine on the recognition of employee status under the Labor Standards Act, and by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, contrary to what is alleged in the grounds of appeal. The Plaintiffs’ ground of appeal pointing this out is with merit.

2. The defendant's second ground for appeal

For the reasons indicated in its holding, the lower court determined that commission fees, interest collection rewards, installment interest collection rewards, and transportation expenses paid by the Defendant to the Plaintiffs are included in the average wage which serves as the basis for calculating the Plaintiffs’ retirement allowances.

Examining the reasoning of the lower judgment in light of the relevant legal doctrine and the record, the lower court did not err by misapprehending the legal doctrine on the scope of wages under the Labor Standards Act.

3. The defendant's ground of appeal No. 3 (the part against plaintiffs 1, 2, 3, and 5)

Even if the average wage was calculated in accordance with the principle prescribed by the Labor Standards Act and the Enforcement Decree of the Labor Standards Act, if there was a change in the amount of wage due to the special and incidental circumstances regarding the worker's retirement for a certain period of time, and as such, in such exceptional cases where it is deemed that the average wage calculated as above is significantly less or more than ordinary cases when comprehensively assessing all the circumstances, including the entire period of work, the period during which the amount of wage changes, the amount of wage changes, and the degree of changes in the amount of wage, etc., it is not permissible in light of the spirit of the Labor Standards Act that intends to calculate the amount of retirement allowance based on the worker's ordinary living wage. Thus, the calculation of the amount of retirement allowance based on such exceptional case is not permissible. Thus, the average wage should be separately calculated in a reasonable and reasonable way that can reflect the actual amount of the worker's ordinary living wage (see Supreme Court Decision 209Da9396, Apr. 15, 2010).

Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the record, the lower court did not err by misapprehending the legal doctrine regarding the calculation of average wages.

4. The defendant's ground of appeal No. 4

In the reasoning of a written judgment, it is sufficient to indicate the judgment on the parties’ allegations and other means of offence and defense to the extent that it can be recognized that the text is justifiable, and it is not necessary to determine all allegations by the parties or methods of offence and defense (see Article 208 of the Civil Procedure Act). Therefore, even if the specific and direct judgment on the matters alleged by the parties is not indicated in a written judgment, it cannot be said that the judgment is omitted if it can be known that the parties received or rejected such allegations in light of the overall purport of the reasons for the judgment (see Supreme Court Decision 2017Da239311, May 10, 2019,

The judgment of the court below on the calculation of average wages includes the purport of rejecting the defendant's assertion that it is an omission in judgment, so it cannot be said that the judgment of the court below erred.

5. Determination on the grounds of appeal by Plaintiffs 1, 2, 3, and 5

A. Determination on the assertion in the grounds of appeal on the application of the delayed interest rate under the Labor Standards Act

1) According to the provisions of Article 37(1) and (2) of the Labor Standards Act, Article 17 and Article 18 subparag. 3 of the Enforcement Decree of the Labor Standards Act, where an employer fails to pay all or part of wages and retirement allowances within 14 days from the date when the cause for payment occurred, in principle, an employer shall pay interest in arrears at the rate of 20/100 per annum for the number of delayed days from the following day to the date when the cause for payment occurred. However, where it is deemed appropriate to dispute the existence of all or part of wages and retirement allowances whose payment is delayed at the court or the Labor Relations Commission, it is not necessary to pay interest in arrears for the period in which the cause exists (see Supreme Court Decision 2015Da54219, Jul. 11, 2017, etc.).

2) The lower court determined as follows with regard to the application of the delayed interest rate under the Labor Standards Act. The period during which Plaintiffs 1, 2, 3, and 5 occupy a portion above 50% compared with the income earned from other workplaces than the Defendant during the same period, the above Plaintiffs cannot be deemed the Defendant’s employee, but the amount of the final calculated retirement allowance exceeds the amount of the first instance judgment due to changes in the average wage calculation period, but only the Defendant appealed the same amount as the first instance judgment under the principle of prohibition against disadvantageous changes. However, in light of the circumstances where the period of recognition of worker status, which serves as the basis for the calculation of retirement pay, was reduced by the first instance court, it is recognized that the Defendant is appropriate to dispute the duty and scope of the retirement allowance until the date of the lower judgment.

3) Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the record, the lower court erred by misapprehending the legal doctrine on the recognition of worker status as seen earlier with respect to the period of recognition of worker status under the Labor Standards Act, but in so long as the Defendant’s assertion on this matter was partially accepted by the lower court, the lower court did not err by misapprehending the legal doctrine on the application of delayed interest rate under the Labor Standards Act, contrary to what is alleged in the grounds of appeal, thereby adversely affecting the conclusion of the judgment.

B. Determination of the ground of appeal as to the commencement date of interest in arrears

The lower court recognized the earlier date than the date claimed by Plaintiffs 1, 2, 3, and 5 as the date of loss of worker status, and found that interest on the retirement allowance claim occurs after the 14th day from that time, and accepted only the interest on the arrears from the date of calculation sought by the said Plaintiffs.

In light of the relevant legal principles and records, the lower court did not err by misapprehending the legal principles on the disposition authority principle regarding the interest in arrears, as alleged in the grounds of appeal, thereby failing to exhaust all necessary deliberations or by failing to comply with the duty of explanation.

6. Scope of reversal (the part against Plaintiffs 4, 6, and 7)

Of the lower judgment, the part against Plaintiffs 4, 6, and 7 of the lower judgment affected the conclusion of the judgment by misapprehending the legal doctrine as to the recognition of employee status as seen earlier. Moreover, the Defendant is dissatisfied with the method of calculating the average wage of the lower court for the said Plaintiffs. The legitimacy of the Defendant’s assertion is necessary to be deliberated and determined together with the claim part of the said Plaintiffs reversed for the foregoing reason. Therefore, the part against the said Plaintiffs in the lower judgment against the Defendant is reversed.

7. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the part of the judgment below against Plaintiffs 4, 6, and 7 is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. All appeals by Plaintiffs 1, 2, 3, and 5 and appeals by the defendant against the above plaintiffs are dismissed. The costs of appeal by the above plaintiffs among the costs of appeal between Plaintiffs 1, 2, 3, and 5 and the defendant are assessed against the above plaintiffs, and the costs of appeal by the defendant are assessed against the defendant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment] List of Plaintiffs: Omitted

Justices Park Sang-ok (Presiding Justice)