Overview

In July 2010, in a case filed by employees of Company B, which had executed a subcontract service agreement with a car manufacturer Company A, the Supreme Court acknowledged the employment relationship between Company A and an employee of Company B. The subcontracted employee worked on a part of the car manufacturing line operated by Company A.

The Supreme Court ruled that the subcontract service agreement between Company A and Company B is deemed to be a worker dispatch agreement in substance despite the form of the subcontract service agreement and in case of a worker dispatch agreement, regardless of the legality thereof, the employee of Company B who has worked under the worker dispatch agreement for more than two years after the execution thereof is deemed to be an employee of Company A in accordance with Paragraph 3 of Article 6 of the old Act Relating to the Protection, etc. of Dispatched Workers (before this Act was amended on 21 December 2006 and effective as of 1 July 2007).

Kim & Chang’s report considers the implications this hearing might have on labour and employment in Korea.

To read more, click View Briefing.