Corporate trends / Performance record
Case on Unfair Dismissal Relating to “Denial of Employee Status (IT Freelancer)” (Unfair Dismissal 316)
- Date2026/03/25 04:13
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[Case Information]
This case is a decision that was concluded by upholding the first-instance ruling on the issue of “denial of employee status (IT freelancer).”
Decision body: Central Labor Relations Commission 2025Buhae1411 ○ ○ ○ Application for Re‑examination of Remedy for Unfair Dismissal
2026.01.09 · Result: First‑instance decision upheld
Summary of key issues: The workers argued that they qualified as employees under the Labor Standards Act, but: (i) under the service contract executed between the parties, the total contract amount for the services was fixed and paid in monthly installments, and they agreed to pay business income tax as registered sole proprietors; (ii) the workers had previously entered into numerous freelancer service contracts and employment contracts, and thus appeared to have understood the differences between an employment contract and a freelancer contract when they chose to enter into a freelancer contract with the employer; (iii) working …
1. Legal Implications
Ⅰ. Case Overview
This re‑examination case on remedy for unfair dismissal concerns freelancers engaged in an IT development project who applied to the Labor Relations Commission for a remedy, asserting that they should be regarded as employees under the Labor Standards Act. The Central Labor Relations Commission upheld the first‑instance decision and focused its analysis on whether they qualified as employees under the Labor Standards Act. As this case concerns unfair dismissal and Labor Relations Commission procedures, it may serve as an important reference point in similar IT and platform‑freelancer disputes, and therefore warrants attention from Labor Law Firm Law& as well.
Ⅱ. Summary of Issues
The issue in this case is whether freelancers who performed IT development work under the form of a service contract can nonetheless be deemed employees under the Labor Standards Act and thus be proper parties to an application for remedy for unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case determined that: (i) the parties agreed in the service contract on the total amount of service fees, to be paid in monthly installments, and that the applicants would pay business income tax as sole proprietors; (ii) the applicants had a history of entering into numerous freelancer service contracts as well as employment contracts, and therefore appeared to have chosen a freelancer contract with awareness of the differences between an employment contract and a freelancer contract; (iii) seat assignments, compliance with work rules, prior approval for leave, and completion of training all appeared to be unavoidable measures arising from the security requirements and business characteristics of the principal company, and were difficult to regard as direct instructions or supervision by the employer (the service provider); and (iv) given the nature of development work, merely sharing progress and coordinating schedules could not, by itself, be viewed as typical, specific, and individualized direction and supervision by an employer. Taking these factors together, the panel held that it was difficult to find that the workers had provided labor in a subordinate relationship for the purpose of receiving wages from the employer, and thus difficult to recognize them as employees under the Labor Standards Act.
Accordingly, the dismissal in this case should be understood as one where the premise for an application for remedy for unfair dismissal was denied on the ground that “employee status under the Labor Standards Act” was not recognized.
Ⅳ. Practical Points (From the Worker’s Perspective)
Even if you work in the form of a freelancer or service provider, you should bear in mind that you may still be able to assert employee status if, in reality, you are subject to the employer’s direction and supervision, constrained by prescribed working hours and workplace, and receive fixed remuneration. However, as in this case, where elements of an “independent business operator” are strong—such as business registration as a sole proprietor, payment of business income tax, and a contract for a lump‑sum service fee—and where there is only security‑ or safety‑related control with little substantive personnel or attendance management, it will be difficult to have employee status recognized. From the stage of entering into a freelancer contract, you should carefully review the contract terms, the actual chain of command in the work, and the method of remuneration, and if there is any possibility of dispute, you should seek early advice from experts such as Labor Law Firm Law&.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
Companies that utilize freelancer, service, or subcontracting arrangements must always proceed on the premise that employee status cannot be avoided merely by the formal title of the contract. As in this case, clearly structuring matters such as business registration as a sole proprietor, treatment of business income tax, the overall lump‑sum service‑fee structure, and the scope of work instructions (whether they are security‑related controls or personnel/attendance controls) will assist in defending the employer’s position in future disputes over unfair dismissal or redundancy. However, if you specifically designate working hours and workplace, and apply the same disciplinary and evaluation systems under work rules and personnel regulations, thereby creating a typical relationship of subordination, the workers may be deemed employees under the Labor Standards Act regardless of the contractual form. Accordingly, from the HR and labor‑management planning stage, you should review the structure with experts such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
The workers argued that they qualified as employees under the Labor Standards Act, but: (i) under the service contract executed between the parties, the total contract amount for the services was fixed and paid in monthly installments, and they agreed to pay business income tax as registered sole proprietors; (ii) the workers had previously entered into numerous freelancer service contracts and employment contracts, and thus appeared to have entered into the freelancer contract with the employer while understanding the differences between an employment contract and a freelancer contract; (iii) seat assignments within the workplace were made by the principal company pursuant to its security policy, and not by the employer; (iv) given the nature of development work carried out within the principal company, it appears that sharing of work progress was unavoidable for managing and coordinating schedules divided by part, and such sharing is difficult to regard as work instructions or direction and supervision; and (v) compliance with work rules, prior approval for leave, and completion of training, as asserted by the workers, all appear to have unavoidably arisen because the business was conducted within the principal company’s premises for security reasons, and cannot be viewed as resulting from the employer’s direct regulation or direction and supervision. Considering all of these circumstances together, it was determined that the workers did not qualify as employees under the Labor Standards Act.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
The workers argued that they qualified as employees under the Labor Standards Act, but: (i) under the service contract executed between the parties, the total contract amount for the services was fixed and paid in monthly installments, and they agreed to pay business income tax as registered sole proprietors; (ii) the workers had previously entered into numerous freelancer service contracts and employment contracts, and thus appeared to have entered into the freelancer contract with the employer while understanding the differences between an employment contract and a freelancer contract; (iii) seat assignments within the workplace were made by the principal company pursuant to its security policy, and not by the employer; (iv) given the nature of development work carried out within the principal company, it appears that sharing of work progress was unavoidable for managing and coordinating schedules divided by part, and such sharing is difficult to regard as work instructions or direction and supervision; and (v) compliance with work rules, prior approval for leave, and completion of training, as asserted by the workers, all appear to have unavoidably arisen because the business was conducted within the principal company’s premises for security reasons, and cannot be viewed as resulting from the employer’s direct regulation or direction and supervision. Considering all of these circumstances together, it was determined that the workers did not qualify as employees under the Labor Standards Act. /
[See More Related Decisions]
- “Case on Unfair Dismissal Relating to ‘Standing to Be an Employer (Transfer Between Contractor and Subcontractor)’”
- “Case on Unfair Dismissal Relating to ‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’”
- “Case on Unfair Dismissal Relating to ‘Expression of Intent to Resign (Interview · Group Chat)’”
[Tags]
Unfair dismissal, denial of employee status (IT freelancer), whether employee status is recognized, 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 the “Unfair Dismissal Case Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, “Case on Unfair Dismissal Relating to ‘Expression of Intent to Resign (Interview · Group Chat)’,” in a new window.
※ You can view the list of decisions relating to denial of employee status (IT freelancer) at “List of Decisions Relating to Denial of Employee Status (IT Freelancer).”
※ Korean version of this case: Korean article
This case is a decision that was concluded by upholding the first-instance ruling on the issue of “denial of employee status (IT freelancer).”
Decision body: Central Labor Relations Commission 2025Buhae1411 ○ ○ ○ Application for Re‑examination of Remedy for Unfair Dismissal
2026.01.09 · Result: First‑instance decision upheld
Summary of key issues: The workers argued that they qualified as employees under the Labor Standards Act, but: (i) under the service contract executed between the parties, the total contract amount for the services was fixed and paid in monthly installments, and they agreed to pay business income tax as registered sole proprietors; (ii) the workers had previously entered into numerous freelancer service contracts and employment contracts, and thus appeared to have understood the differences between an employment contract and a freelancer contract when they chose to enter into a freelancer contract with the employer; (iii) working …
1. Legal Implications
Ⅰ. Case Overview
This re‑examination case on remedy for unfair dismissal concerns freelancers engaged in an IT development project who applied to the Labor Relations Commission for a remedy, asserting that they should be regarded as employees under the Labor Standards Act. The Central Labor Relations Commission upheld the first‑instance decision and focused its analysis on whether they qualified as employees under the Labor Standards Act. As this case concerns unfair dismissal and Labor Relations Commission procedures, it may serve as an important reference point in similar IT and platform‑freelancer disputes, and therefore warrants attention from Labor Law Firm Law& as well.
Ⅱ. Summary of Issues
The issue in this case is whether freelancers who performed IT development work under the form of a service contract can nonetheless be deemed employees under the Labor Standards Act and thus be proper parties to an application for remedy for unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case determined that: (i) the parties agreed in the service contract on the total amount of service fees, to be paid in monthly installments, and that the applicants would pay business income tax as sole proprietors; (ii) the applicants had a history of entering into numerous freelancer service contracts as well as employment contracts, and therefore appeared to have chosen a freelancer contract with awareness of the differences between an employment contract and a freelancer contract; (iii) seat assignments, compliance with work rules, prior approval for leave, and completion of training all appeared to be unavoidable measures arising from the security requirements and business characteristics of the principal company, and were difficult to regard as direct instructions or supervision by the employer (the service provider); and (iv) given the nature of development work, merely sharing progress and coordinating schedules could not, by itself, be viewed as typical, specific, and individualized direction and supervision by an employer. Taking these factors together, the panel held that it was difficult to find that the workers had provided labor in a subordinate relationship for the purpose of receiving wages from the employer, and thus difficult to recognize them as employees under the Labor Standards Act.
Accordingly, the dismissal in this case should be understood as one where the premise for an application for remedy for unfair dismissal was denied on the ground that “employee status under the Labor Standards Act” was not recognized.
Ⅳ. Practical Points (From the Worker’s Perspective)
Even if you work in the form of a freelancer or service provider, you should bear in mind that you may still be able to assert employee status if, in reality, you are subject to the employer’s direction and supervision, constrained by prescribed working hours and workplace, and receive fixed remuneration. However, as in this case, where elements of an “independent business operator” are strong—such as business registration as a sole proprietor, payment of business income tax, and a contract for a lump‑sum service fee—and where there is only security‑ or safety‑related control with little substantive personnel or attendance management, it will be difficult to have employee status recognized. From the stage of entering into a freelancer contract, you should carefully review the contract terms, the actual chain of command in the work, and the method of remuneration, and if there is any possibility of dispute, you should seek early advice from experts such as Labor Law Firm Law&.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
Companies that utilize freelancer, service, or subcontracting arrangements must always proceed on the premise that employee status cannot be avoided merely by the formal title of the contract. As in this case, clearly structuring matters such as business registration as a sole proprietor, treatment of business income tax, the overall lump‑sum service‑fee structure, and the scope of work instructions (whether they are security‑related controls or personnel/attendance controls) will assist in defending the employer’s position in future disputes over unfair dismissal or redundancy. However, if you specifically designate working hours and workplace, and apply the same disciplinary and evaluation systems under work rules and personnel regulations, thereby creating a typical relationship of subordination, the workers may be deemed employees under the Labor Standards Act regardless of the contractual form. Accordingly, from the HR and labor‑management planning stage, you should review the structure with experts such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
The workers argued that they qualified as employees under the Labor Standards Act, but: (i) under the service contract executed between the parties, the total contract amount for the services was fixed and paid in monthly installments, and they agreed to pay business income tax as registered sole proprietors; (ii) the workers had previously entered into numerous freelancer service contracts and employment contracts, and thus appeared to have entered into the freelancer contract with the employer while understanding the differences between an employment contract and a freelancer contract; (iii) seat assignments within the workplace were made by the principal company pursuant to its security policy, and not by the employer; (iv) given the nature of development work carried out within the principal company, it appears that sharing of work progress was unavoidable for managing and coordinating schedules divided by part, and such sharing is difficult to regard as work instructions or direction and supervision; and (v) compliance with work rules, prior approval for leave, and completion of training, as asserted by the workers, all appear to have unavoidably arisen because the business was conducted within the principal company’s premises for security reasons, and cannot be viewed as resulting from the employer’s direct regulation or direction and supervision. Considering all of these circumstances together, it was determined that the workers did not qualify as employees under the Labor Standards Act.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
The workers argued that they qualified as employees under the Labor Standards Act, but: (i) under the service contract executed between the parties, the total contract amount for the services was fixed and paid in monthly installments, and they agreed to pay business income tax as registered sole proprietors; (ii) the workers had previously entered into numerous freelancer service contracts and employment contracts, and thus appeared to have entered into the freelancer contract with the employer while understanding the differences between an employment contract and a freelancer contract; (iii) seat assignments within the workplace were made by the principal company pursuant to its security policy, and not by the employer; (iv) given the nature of development work carried out within the principal company, it appears that sharing of work progress was unavoidable for managing and coordinating schedules divided by part, and such sharing is difficult to regard as work instructions or direction and supervision; and (v) compliance with work rules, prior approval for leave, and completion of training, as asserted by the workers, all appear to have unavoidably arisen because the business was conducted within the principal company’s premises for security reasons, and cannot be viewed as resulting from the employer’s direct regulation or direction and supervision. Considering all of these circumstances together, it was determined that the workers did not qualify as employees under the Labor Standards Act. /
[See More Related Decisions]
- “Case on Unfair Dismissal Relating to ‘Standing to Be an Employer (Transfer Between Contractor and Subcontractor)’”
- “Case on Unfair Dismissal Relating to ‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’”
- “Case on Unfair Dismissal Relating to ‘Expression of Intent to Resign (Interview · Group Chat)’”
[Tags]
Unfair dismissal, denial of employee status (IT freelancer), whether employee status is recognized, 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 the “Unfair Dismissal Case Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, “Case on Unfair Dismissal Relating to ‘Expression of Intent to Resign (Interview · Group Chat)’,” in a new window.
※ You can view the list of decisions relating to denial of employee status (IT freelancer) at “List of Decisions Relating to Denial of Employee Status (IT Freelancer).”
※ Korean version of this case: Korean article
