[Labor] ‘Dispatch relationship’ recognized for 41 workers from Hyundai Steel’s Suncheon plant in-house partner company

[Supreme Court] Received command and order from Hyundai Steel, excluding 11 people, including machine maintenance, etc.

41 workers who belonged to an in-house partner company that signed a contract with Hyundai Steel and performed tasks such as supporting cold-rolled steel sheet production at Hyundai Steel's Suncheon plant were hired as Hyundai Steel employees as their worker dispatch relationship with Hyundai Steel was recognized.

On March 12, the Second Division of the Supreme Court (Chief Justice Dong-won Lee) of the Supreme Court ruled in the appeal trial (2019Da28966, etc.) of a lawsuit filed against Hyundai Steel by 52 workers at an in-house partner company of Hyundai Steel, saying, "Please express your intention to hire them and pay damages equivalent to the difference in wages received by Hyundai Steel's regular workers." "41 of the plaintiffs, excluding 11, and the defendant are in a worker dispatch relationship. “There was,” the lower court ruled, “Hyundai Steel must express its intention to hire these 41 people.”

However, with regard to the 11 workers who performed level 0 mechanical maintenance and electrical maintenance work and maintenance and management of utility facilities, the lower court ruled that the worker was dispatched, saying, "It is difficult to conclude that they were in a worker dispatch relationship where they received instructions and orders from the defendant," and remanded the case to the Gwangju High Court.

The Supreme Court said, "The original trial court ruled that the fact that the plaintiffs (41 people) were employed by the defendant's in-house partner company and performed the support process work required for the production of cold-rolled steel sheets, etc. or the production process of lightweight vehicle products at the defendant's Suncheon plant during the period or time that constitutes the requirement for employment obligations claimed by the plaintiffs constitutes a worker dispatch relationship under direction and orders from the defendant." “There was no mistake such as misunderstanding,” he said.

The Supreme Court cited the original trial, saying, "It appears that the workers of the in-house partner companies, including the plaintiffs, received instructions or supervision regarding work performance from the defendant while performing relatively simple and repetitive work in processes that can be seen as part of the production process of cold-rolled steel sheets at the defendant's Suncheon plant. The defendant prepared detailed work standards and issued them to the in-house partner companies, and the workers of the in-house partner companies are subject to the standards determined by the defendant. “Work could not be performed because the work method, work order, work details, work speed, and work location were violated or arbitrarily changed,” it said.

In addition, he pointed out, "The work performed by the workers of the in-house partner company needs to be carried out together in conjunction with the flow of the production process, such as cold-rolled steel sheets at the Suncheon plant, and the work hours and break times of the workers of the in-house partner company are set the same as those of the defendant's workers, so it can be evaluated that the workers of the defendant and the workers of the in-house partner company virtually formed one work group for each process," and "The defendant has a significant influence on the personnel and attendance status of the workers of the in-house partner company." It appears to have been exercised, and even in cases where an in-house partner company closes down and a new in-house partner company signs a contract to do the work, it is difficult to say that the in-house partner company has actually exercised its right to assign work to its workers, as it succeeds the existing worker and performs the existing work without changing the actual work details.”


According to the appellate court, the in-house partner companies only operated at the Suncheon plant without the expertise and technical skills for the relevant contract work, or the physical facilities and fixed assets necessary to perform the work, and most of them were established for the service contract with Hyundai Steel, but went out of business immediately after the contract was terminated.

Attorney Kim Ki-duk and Daeryun Law Firm represented the plaintiffs in the appellate trial. Hyundai Steel was represented by Jipyong Law Firm.

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