Corporate trends / Performance record
Unfair Dismissal Decision Concerning “Number of Regular Employees (Sales Managers)” (Unfair Dismissal 119)
- Date2026/01/17 04:09
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[Case Information]
This case is a decision that was procedurally dismissed at the Labor Relations Commission on the issue of the “number of regular employees (sales managers).”
Decision body: Incheon Regional Labor Relations Commission 2025UnfairDismissal818 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2025.11.17 · Case result: Dismissed
Summary of key issue: The employee argued that, in addition to the three office-based staff, the sales managers should also be counted as employees in calculating the number of regular employees at the office. However, the Commission found that there were no objective circumstances to support this, nor sufficient proof from the employee.
1. Legal Implications
Ⅰ. Case Overview
In this unfair dismissal case, an application for remedy was filed with the Labor Relations Commission, but the threshold issue was whether the workplace was one with five or more regular employees, to which the Labor Standards Act applies. The employee argued that, in addition to the three staff members stationed at the office, the sales managers working externally should also be included in the number of regular employees. The employer countered that the sales managers were not employees, and therefore the office was not a workplace with five or more regular employees.
Ⅱ. Summary of Issues
The issue in this case is whether the sales managers are “employees” under the Labor Standards Act, providing labor under the employer’s direction and control, such that the workplace satisfies the requirement of “a business or workplace employing five or more regular employees,” which is a precondition for the Labor Relations Commission’s unfair dismissal remedy system.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that there was no separate attendance management for the sales managers; unlike the office-based staff, there was no indication that they were subject to specific direction and supervision in the course of their work; they did not receive a base salary or fixed pay, but only a portion of registration service fees as a referral fee for registration-related business; and they primarily earned their income from work not affiliated with the office, making it difficult to view them as being in an exclusive relationship with the employer. In light of these factors, the panel found it difficult to regard the sales managers as employees under the Labor Standards Act.
Accordingly, the number of persons who could be recognized as employees was limited to the three office-based staff. The total number of employee-days during the calculation period was 78, which, when divided by the number of operating days (23 days), yielded approximately 3.39 persons. The number of days on which the number of regular employees exceeded five was only three. Taking these factors together, the Commission held that the office did not constitute a workplace with five or more regular employees as defined in Article 11 of the Labor Standards Act.
Ultimately, the dismissal in this case did not proceed to a hearing on the merits at the Labor Relations Commission, but was dismissed on the ground that the workplace failed to meet the size requirement that underpins the unfair dismissal remedy system under the Labor Standards Act.
Ⅳ. Practical Points (From the Employee’s Perspective)
To file an application for remedy for unfair dismissal with the Labor Relations Commission, an employee must first carefully整理 the factual circumstances regarding whether the workplace employs at least five regular employees and which of the persons working there can be recognized as “employees.” In particular, for sales managers, freelancers, and personnel engaged under consignment or commission contracts, employee status is determined comprehensively based on various factors such as attendance management, direction and supervision, the form of remuneration, and exclusivity. It is therefore important to secure sufficient materials—such as contracts and evidence of actual working conditions—to substantiate these points.
In addition, the calculation of the number of regular employees is not based simply on the “current headcount,” but on the total number of employee-days over a certain period and the number of operating days. Employees should prepare objective materials such as records of personnel changes, attendance records, and payroll ledgers to prove whether the threshold of five or more employees is met.
Ⅴ. Practical Points (From the Employer’s/Company’s Perspective)
From the employer’s perspective, if sales managers, commissioned workers, freelancers, etc. are in substance directed and supervised in the same way as employees, but are treated only in form as “self-employed” or “under consignment contracts,” there is a significant risk that they will later be recognized as employees by the Labor Relations Commission or the courts. The stronger the elements such as fixed working hours and places, specific work instructions, fixed pay, and exclusivity, the higher the likelihood that employee status will be recognized. Employers should therefore align contract forms with actual operational practices and, where necessary, consult experts such as Labor Law Firm Law& to review the calculation of the number of regular employees and the structure of their contracts.
Furthermore, attempts to avoid the application of the Labor Standards Act by adjusting headcount or merely changing contract forms with the five-employee threshold in mind may work to the employer’s disadvantage in future disputes. Employers should establish personnel and labor management systems that reflect the actual conditions of the workplace and, when planning major personnel measures such as redundancy dismissals or disciplinary dismissals, should from the outset review both the jurisdiction of the Labor Relations Commission and the scope of applicable law.
2. Matters Decided
a. Case Overview and Procedural History
The employee argued that, in addition to the three staff members stationed at the office, the sales managers should also be regarded as employees to be included in calculating the number of regular employees at the office. However, the Commission found that there were no objective circumstances to support this, nor sufficient proof from the employee. The sales managers were not subject to separate attendance management by the employer; unlike the office-based staff, there was no indication that they were directed or supervised in their work; they received no base salary or fixed pay, but only a portion of the fees generated from registration-related business as referral fees for registration services; and they primarily engaged in other work not affiliated with the office, making it difficult to view them as being in an exclusive relationship with the employer. In light of these factors, it was difficult to regard them as employees under the Labor Standards Act. Therefore, the total number of employee-days used by the office during the calculation period was 78, and dividing this by the number of operating days (23 days) yields 3.39 as the number of regular employees. It is also reasonable to view the number of days on which the number of regular employees exceeded five as only three. Accordingly, the employer’s assertion that the office is not a workplace with five or more regular employees appears more credible.
3. Summary of Decision
a. Summary of the Labor Relations Commission’s Reasoning
The employee argued that, in addition to the three staff members stationed at the office, the sales managers should also be regarded as employees to be included in calculating the number of regular employees at the office. However, the Commission found that there were no objective circumstances to support this, nor sufficient proof from the employee. The sales managers were not subject to separate attendance management by the employer; unlike the office-based staff, there was no indication that they were directed or supervised in their work; they received no base salary or fixed pay, but only a portion of the fees generated from registration-related business as referral fees for registration services; and they primarily engaged in other work not affiliated with the office, making it difficult to view them as being in an exclusive relationship with the employer. In light of these factors, it was difficult to regard them as employees under the Labor Standards Act. Therefore, the total number of employee-days used by the office during the calculation period was 78, and dividing this by the number of operating days (23 days) yields 3.39 as the number of regular employees. It is also reasonable to view the number of days on which the number of regular employees exceeded five as only three. Accordingly, the employer’s assertion that the office is not a workplace with five or more regular employees appears more credible. /
[See More Related Decisions]
- “Unfair Dismissal Decision Concerning ‘Expectation of Renewal (Fixed-Term Professionals)’”
- “Unfair Dismissal Decision Concerning ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’” – Decision date: – Case number: Initial Decision Upheld
- “Unfair Dismissal Decision Concerning ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
[Tags]
Unfair dismissal, number of regular employees (sales managers), others, Labor Law Firm Law&, large labor law firm, Samseong-dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is part of Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ The previous article, “Unfair Dismissal Decision Concerning ‘Expectation of Renewal (Fixed-Term Professionals)’,” can be viewed in a new window.
※ The list of decisions related to the number of regular employees (sales managers) can be viewed in the “List of Decisions Related to the Number of Regular Employees (Sales Managers).”
※ Korean version of this case: Korean article
This case is a decision that was procedurally dismissed at the Labor Relations Commission on the issue of the “number of regular employees (sales managers).”
Decision body: Incheon Regional Labor Relations Commission 2025UnfairDismissal818 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2025.11.17 · Case result: Dismissed
Summary of key issue: The employee argued that, in addition to the three office-based staff, the sales managers should also be counted as employees in calculating the number of regular employees at the office. However, the Commission found that there were no objective circumstances to support this, nor sufficient proof from the employee.
1. Legal Implications
Ⅰ. Case Overview
In this unfair dismissal case, an application for remedy was filed with the Labor Relations Commission, but the threshold issue was whether the workplace was one with five or more regular employees, to which the Labor Standards Act applies. The employee argued that, in addition to the three staff members stationed at the office, the sales managers working externally should also be included in the number of regular employees. The employer countered that the sales managers were not employees, and therefore the office was not a workplace with five or more regular employees.
Ⅱ. Summary of Issues
The issue in this case is whether the sales managers are “employees” under the Labor Standards Act, providing labor under the employer’s direction and control, such that the workplace satisfies the requirement of “a business or workplace employing five or more regular employees,” which is a precondition for the Labor Relations Commission’s unfair dismissal remedy system.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that there was no separate attendance management for the sales managers; unlike the office-based staff, there was no indication that they were subject to specific direction and supervision in the course of their work; they did not receive a base salary or fixed pay, but only a portion of registration service fees as a referral fee for registration-related business; and they primarily earned their income from work not affiliated with the office, making it difficult to view them as being in an exclusive relationship with the employer. In light of these factors, the panel found it difficult to regard the sales managers as employees under the Labor Standards Act.
Accordingly, the number of persons who could be recognized as employees was limited to the three office-based staff. The total number of employee-days during the calculation period was 78, which, when divided by the number of operating days (23 days), yielded approximately 3.39 persons. The number of days on which the number of regular employees exceeded five was only three. Taking these factors together, the Commission held that the office did not constitute a workplace with five or more regular employees as defined in Article 11 of the Labor Standards Act.
Ultimately, the dismissal in this case did not proceed to a hearing on the merits at the Labor Relations Commission, but was dismissed on the ground that the workplace failed to meet the size requirement that underpins the unfair dismissal remedy system under the Labor Standards Act.
Ⅳ. Practical Points (From the Employee’s Perspective)
To file an application for remedy for unfair dismissal with the Labor Relations Commission, an employee must first carefully整理 the factual circumstances regarding whether the workplace employs at least five regular employees and which of the persons working there can be recognized as “employees.” In particular, for sales managers, freelancers, and personnel engaged under consignment or commission contracts, employee status is determined comprehensively based on various factors such as attendance management, direction and supervision, the form of remuneration, and exclusivity. It is therefore important to secure sufficient materials—such as contracts and evidence of actual working conditions—to substantiate these points.
In addition, the calculation of the number of regular employees is not based simply on the “current headcount,” but on the total number of employee-days over a certain period and the number of operating days. Employees should prepare objective materials such as records of personnel changes, attendance records, and payroll ledgers to prove whether the threshold of five or more employees is met.
Ⅴ. Practical Points (From the Employer’s/Company’s Perspective)
From the employer’s perspective, if sales managers, commissioned workers, freelancers, etc. are in substance directed and supervised in the same way as employees, but are treated only in form as “self-employed” or “under consignment contracts,” there is a significant risk that they will later be recognized as employees by the Labor Relations Commission or the courts. The stronger the elements such as fixed working hours and places, specific work instructions, fixed pay, and exclusivity, the higher the likelihood that employee status will be recognized. Employers should therefore align contract forms with actual operational practices and, where necessary, consult experts such as Labor Law Firm Law& to review the calculation of the number of regular employees and the structure of their contracts.
Furthermore, attempts to avoid the application of the Labor Standards Act by adjusting headcount or merely changing contract forms with the five-employee threshold in mind may work to the employer’s disadvantage in future disputes. Employers should establish personnel and labor management systems that reflect the actual conditions of the workplace and, when planning major personnel measures such as redundancy dismissals or disciplinary dismissals, should from the outset review both the jurisdiction of the Labor Relations Commission and the scope of applicable law.
2. Matters Decided
a. Case Overview and Procedural History
The employee argued that, in addition to the three staff members stationed at the office, the sales managers should also be regarded as employees to be included in calculating the number of regular employees at the office. However, the Commission found that there were no objective circumstances to support this, nor sufficient proof from the employee. The sales managers were not subject to separate attendance management by the employer; unlike the office-based staff, there was no indication that they were directed or supervised in their work; they received no base salary or fixed pay, but only a portion of the fees generated from registration-related business as referral fees for registration services; and they primarily engaged in other work not affiliated with the office, making it difficult to view them as being in an exclusive relationship with the employer. In light of these factors, it was difficult to regard them as employees under the Labor Standards Act. Therefore, the total number of employee-days used by the office during the calculation period was 78, and dividing this by the number of operating days (23 days) yields 3.39 as the number of regular employees. It is also reasonable to view the number of days on which the number of regular employees exceeded five as only three. Accordingly, the employer’s assertion that the office is not a workplace with five or more regular employees appears more credible.
3. Summary of Decision
a. Summary of the Labor Relations Commission’s Reasoning
The employee argued that, in addition to the three staff members stationed at the office, the sales managers should also be regarded as employees to be included in calculating the number of regular employees at the office. However, the Commission found that there were no objective circumstances to support this, nor sufficient proof from the employee. The sales managers were not subject to separate attendance management by the employer; unlike the office-based staff, there was no indication that they were directed or supervised in their work; they received no base salary or fixed pay, but only a portion of the fees generated from registration-related business as referral fees for registration services; and they primarily engaged in other work not affiliated with the office, making it difficult to view them as being in an exclusive relationship with the employer. In light of these factors, it was difficult to regard them as employees under the Labor Standards Act. Therefore, the total number of employee-days used by the office during the calculation period was 78, and dividing this by the number of operating days (23 days) yields 3.39 as the number of regular employees. It is also reasonable to view the number of days on which the number of regular employees exceeded five as only three. Accordingly, the employer’s assertion that the office is not a workplace with five or more regular employees appears more credible. /
[See More Related Decisions]
- “Unfair Dismissal Decision Concerning ‘Expectation of Renewal (Fixed-Term Professionals)’”
- “Unfair Dismissal Decision Concerning ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’” – Decision date: – Case number: Initial Decision Upheld
- “Unfair Dismissal Decision Concerning ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
[Tags]
Unfair dismissal, number of regular employees (sales managers), others, Labor Law Firm Law&, large labor law firm, Samseong-dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is part of Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ The previous article, “Unfair Dismissal Decision Concerning ‘Expectation of Renewal (Fixed-Term Professionals)’,” can be viewed in a new window.
※ The list of decisions related to the number of regular employees (sales managers) can be viewed in the “List of Decisions Related to the Number of Regular Employees (Sales Managers).”
※ Korean version of this case: Korean article
