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‘Cancellation of Hiring Decision (Denial of Business Transfer)’ Unfair Dismissal Case (Unfair Dismissal 351)
- Date2026/04/06 04:08
- Read 175
[Case Information]
This case is a decision in which the employee prevailed in full on the issue of “cancellation of hiring decision (denial of business transfer).”
Decision Committee: Busan Regional Labor Relations Commission 2026BuHae11 ○○○ Application for Remedy for Unfair Dismissal
2026.02.23 · Case Result: Fully Upheld
Key Issue Summary:
a. Whether the employee in this case is a “worker” under the Labor Standards Act
Since the employee provided labor during working hours under assignment and received wages in return, it is reasonable to regard the employee as a worker under the Labor Standards Act.
1. Legal Implications
Ⅰ. Case Overview
This case is a precedent in which an employee at the hiring-decision stage filed an application for remedy for unfair dismissal with the Busan Regional Labor Relations Commission and the application was fully upheld. The case raised issues concerning whether the dismissal was unfair, as well as the Labor Relations Commission’s remedial order and order for monetary compensation.
The Commission sequentially examined (i) whether the individual was a worker, (ii) whether a business transfer had been established, (iii) whether a hiring decision had been formed, (iv) whether the cancellation of the hiring decision was justified, and (v) the amount of monetary compensation. It ultimately found that the dismissal was unfair and ordered monetary compensation.
Ⅱ. Summary of Issues
The issue in this case is:
“Where, after a hiring decision has been formed in respect of a person who has been providing work, the employer cancels that hiring decision on the ground of a business transfer, etc., without complying with the requirements of just cause for dismissal and written notice, does such cancellation of the hiring decision constitute an unfair dismissal?”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that: the employee provided labor during working hours under the direction and supervision of the employer and received wages in return; based on the substance of the labor provided, it is appropriate to regard the individual as a worker under the Labor Standards Act; the employer continued to operate the same type of business and appears merely to have incorporated new clients into its existing organization, such that the fact of a business transfer was not proven; and, as of 26 October 2025, the employer objectively and clearly expressed its intention to hire the employee, thereby forming a hiring-decision relationship.
In light of these circumstances, the panel further held that: the employer, in cancelling the hiring decision, did not notify the employee in writing of the reason for and timing of the cancellation, and thus failed to comply with the obligation under Article 27 of the Labor Standards Act to provide written notice of the reason and timing of dismissal; cancellation of a hiring decision, in substance, constitutes a dismissal and therefore requires just cause and due procedure; and, since the business transfer itself was not recognized, the employer’s argument that personnel adjustments were necessary on that basis could not be accepted.
On these grounds, the panel held that the dismissal in this case constituted an unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
Regardless of the formal label—non-regular, freelancer, consignment contract, etc.—if, in reality, you have been providing labor at fixed times under the employer’s direction and supervision and receiving wages, you may be recognized as a worker under the Labor Standards Act.
Furthermore, where an employer unilaterally cancels a hiring decision after it has been formed, such cancellation is regarded as a dismissal, and you may be protected by the restrictions on dismissal under the Labor Standards Act (requirement of just cause, written notice, etc.). Therefore, if you receive a notice of cancellation of a hiring decision, you should carefully check the method of notice (whether it is in writing) and whether the reasons are stated.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s standpoint, if you are in a relationship in which you actually receive labor and pay wages, you must manage personnel and labor relations on the premise that the individual may be evaluated as a worker under the Labor Standards Act, regardless of the name of the contract.
Even at the hiring-decision stage, if you have expressed your intention to hire in a concrete and clear manner, a hiring-decision relationship may be formed between you and the worker. When cancelling such a hiring decision, you must comply with the requirement of just cause equivalent to that for dismissal and the written notice procedure under Article 27 of the Labor Standards Act.
Moreover, where you need to adjust personnel due to organizational changes such as business transfer or client migration, it is important for preventing disputes to carefully examine whether the legal requirements for a business transfer are actually met, or whether the situation amounts merely to the incorporation of clients, and then to design appropriate redundancy-dismissal requirements and procedures or other personnel measures accordingly.
2. Matters Decided
a. Case Overview and Procedural History
a. Whether the employee in this case is a worker under the Labor Standards Act
Since the employee provided the assigned labor during working hours and received wages in return, it is reasonable to regard the employee as a worker under the Labor Standards Act.
b. Whether a business transfer took place
The employer in this case appears to have incorporated only clients into its existing organization while continuing to operate the same type of business. It is therefore difficult to find that a business transfer has been proven. Accordingly, there is no need to further examine the remaining issues premised on the occurrence of a business transfer.
c. Whether a hiring decision was formed
The employer in this case objectively and clearly expressed its intention to hire the employee on 26 October 2025. It is therefore determined that a hiring-decision relationship was formed between the employee and the employer.
d. Whether the cancellation of the hiring decision was justified (in terms of cause and procedure)
The employer in this case did not notify the employee in writing of the reason for and timing of the cancellation when it cancelled the hiring decision. Therefore, the cancellation of the hiring decision constitutes an unfair dismissal.
e. Whether to grant the application for an order of monetary compensation and the amount thereof
Since the employee in this case seeks monetary compensation in lieu of reinstatement to the original position, it is appropriate to grant the application for an order of monetary compensation. The appropriate amount of monetary compensation is determined to be KRW 8,150,080.
3. Summary of the Decision
a. Summary of the Labor Relations Commission’s Reasoning
a. Whether the employee in this case is a worker under the Labor Standards Act
Since the employee provided the assigned labor during working hours and received wages in return, it is reasonable to regard the employee as a worker under the Labor Standards Act.
b. Whether a business transfer took place
The employer in this case appears to have incorporated only clients into its existing organization while continuing to operate the same type of business. It is therefore difficult to find that a business transfer has been proven. Accordingly, there is no need to further examine the remaining issues premised on the occurrence of a business transfer.
c. Whether a hiring decision was formed
The employer in this case objectively and clearly expressed its intention to hire the employee on 26 October 2025. It is therefore determined that a hiring-decision relationship was formed between the employee and the employer.
d. Whether the cancellation of the hiring decision was justified (in terms of cause and procedure)
The employer in this case did not notify the employee in writing of the reason for and timing of the cancellation when it cancelled the hiring decision. Therefore, the cancellation of the hiring decision constitutes an unfair dismissal.
e. Whether to grant the application for an order of monetary compensation and the amount thereof
Since the employee in this case seeks monetary compensation in lieu of reinstatement to the original position, it is appropriate to grant the application for an order of monetary compensation. The appropriate amount of monetary compensation is determined to be KRW 8,150,080. /
[See More Related Decisions]
- ‘Non-Formation of Hiring Decision (Absence of Offer Letter)’ Unfair Dismissal Case – Date of Decision: - Case Result: Initial Decision Upheld
- ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Case
- ‘Expiration of Fixed-Term Contract (Submission of Resignation · Receipt of Retirement Allowance)’ Unfair Dismissal Case
[Tags]
Unfair dismissal, cancellation of hiring decision (denial of business transfer), 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 Case Law” series.
※ You can view the previous article, “‘Expiration of Fixed-Term Contract (Submission of Resignation · Receipt of Retirement Allowance)’ Unfair Dismissal Case,” in a new window.
※ You can view the list of decisions related to cancellation of hiring decision (denial of business transfer) on the “List of Decisions Related to Cancellation of Hiring Decision (Denial of Business Transfer)” page.
※ Korean version of this case: Korean article
This case is a decision in which the employee prevailed in full on the issue of “cancellation of hiring decision (denial of business transfer).”
Decision Committee: Busan Regional Labor Relations Commission 2026BuHae11 ○○○ Application for Remedy for Unfair Dismissal
2026.02.23 · Case Result: Fully Upheld
Key Issue Summary:
a. Whether the employee in this case is a “worker” under the Labor Standards Act
Since the employee provided labor during working hours under assignment and received wages in return, it is reasonable to regard the employee as a worker under the Labor Standards Act.
1. Legal Implications
Ⅰ. Case Overview
This case is a precedent in which an employee at the hiring-decision stage filed an application for remedy for unfair dismissal with the Busan Regional Labor Relations Commission and the application was fully upheld. The case raised issues concerning whether the dismissal was unfair, as well as the Labor Relations Commission’s remedial order and order for monetary compensation.
The Commission sequentially examined (i) whether the individual was a worker, (ii) whether a business transfer had been established, (iii) whether a hiring decision had been formed, (iv) whether the cancellation of the hiring decision was justified, and (v) the amount of monetary compensation. It ultimately found that the dismissal was unfair and ordered monetary compensation.
Ⅱ. Summary of Issues
The issue in this case is:
“Where, after a hiring decision has been formed in respect of a person who has been providing work, the employer cancels that hiring decision on the ground of a business transfer, etc., without complying with the requirements of just cause for dismissal and written notice, does such cancellation of the hiring decision constitute an unfair dismissal?”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that: the employee provided labor during working hours under the direction and supervision of the employer and received wages in return; based on the substance of the labor provided, it is appropriate to regard the individual as a worker under the Labor Standards Act; the employer continued to operate the same type of business and appears merely to have incorporated new clients into its existing organization, such that the fact of a business transfer was not proven; and, as of 26 October 2025, the employer objectively and clearly expressed its intention to hire the employee, thereby forming a hiring-decision relationship.
In light of these circumstances, the panel further held that: the employer, in cancelling the hiring decision, did not notify the employee in writing of the reason for and timing of the cancellation, and thus failed to comply with the obligation under Article 27 of the Labor Standards Act to provide written notice of the reason and timing of dismissal; cancellation of a hiring decision, in substance, constitutes a dismissal and therefore requires just cause and due procedure; and, since the business transfer itself was not recognized, the employer’s argument that personnel adjustments were necessary on that basis could not be accepted.
On these grounds, the panel held that the dismissal in this case constituted an unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
Regardless of the formal label—non-regular, freelancer, consignment contract, etc.—if, in reality, you have been providing labor at fixed times under the employer’s direction and supervision and receiving wages, you may be recognized as a worker under the Labor Standards Act.
Furthermore, where an employer unilaterally cancels a hiring decision after it has been formed, such cancellation is regarded as a dismissal, and you may be protected by the restrictions on dismissal under the Labor Standards Act (requirement of just cause, written notice, etc.). Therefore, if you receive a notice of cancellation of a hiring decision, you should carefully check the method of notice (whether it is in writing) and whether the reasons are stated.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s standpoint, if you are in a relationship in which you actually receive labor and pay wages, you must manage personnel and labor relations on the premise that the individual may be evaluated as a worker under the Labor Standards Act, regardless of the name of the contract.
Even at the hiring-decision stage, if you have expressed your intention to hire in a concrete and clear manner, a hiring-decision relationship may be formed between you and the worker. When cancelling such a hiring decision, you must comply with the requirement of just cause equivalent to that for dismissal and the written notice procedure under Article 27 of the Labor Standards Act.
Moreover, where you need to adjust personnel due to organizational changes such as business transfer or client migration, it is important for preventing disputes to carefully examine whether the legal requirements for a business transfer are actually met, or whether the situation amounts merely to the incorporation of clients, and then to design appropriate redundancy-dismissal requirements and procedures or other personnel measures accordingly.
2. Matters Decided
a. Case Overview and Procedural History
a. Whether the employee in this case is a worker under the Labor Standards Act
Since the employee provided the assigned labor during working hours and received wages in return, it is reasonable to regard the employee as a worker under the Labor Standards Act.
b. Whether a business transfer took place
The employer in this case appears to have incorporated only clients into its existing organization while continuing to operate the same type of business. It is therefore difficult to find that a business transfer has been proven. Accordingly, there is no need to further examine the remaining issues premised on the occurrence of a business transfer.
c. Whether a hiring decision was formed
The employer in this case objectively and clearly expressed its intention to hire the employee on 26 October 2025. It is therefore determined that a hiring-decision relationship was formed between the employee and the employer.
d. Whether the cancellation of the hiring decision was justified (in terms of cause and procedure)
The employer in this case did not notify the employee in writing of the reason for and timing of the cancellation when it cancelled the hiring decision. Therefore, the cancellation of the hiring decision constitutes an unfair dismissal.
e. Whether to grant the application for an order of monetary compensation and the amount thereof
Since the employee in this case seeks monetary compensation in lieu of reinstatement to the original position, it is appropriate to grant the application for an order of monetary compensation. The appropriate amount of monetary compensation is determined to be KRW 8,150,080.
3. Summary of the Decision
a. Summary of the Labor Relations Commission’s Reasoning
a. Whether the employee in this case is a worker under the Labor Standards Act
Since the employee provided the assigned labor during working hours and received wages in return, it is reasonable to regard the employee as a worker under the Labor Standards Act.
b. Whether a business transfer took place
The employer in this case appears to have incorporated only clients into its existing organization while continuing to operate the same type of business. It is therefore difficult to find that a business transfer has been proven. Accordingly, there is no need to further examine the remaining issues premised on the occurrence of a business transfer.
c. Whether a hiring decision was formed
The employer in this case objectively and clearly expressed its intention to hire the employee on 26 October 2025. It is therefore determined that a hiring-decision relationship was formed between the employee and the employer.
d. Whether the cancellation of the hiring decision was justified (in terms of cause and procedure)
The employer in this case did not notify the employee in writing of the reason for and timing of the cancellation when it cancelled the hiring decision. Therefore, the cancellation of the hiring decision constitutes an unfair dismissal.
e. Whether to grant the application for an order of monetary compensation and the amount thereof
Since the employee in this case seeks monetary compensation in lieu of reinstatement to the original position, it is appropriate to grant the application for an order of monetary compensation. The appropriate amount of monetary compensation is determined to be KRW 8,150,080. /
[See More Related Decisions]
- ‘Non-Formation of Hiring Decision (Absence of Offer Letter)’ Unfair Dismissal Case – Date of Decision: - Case Result: Initial Decision Upheld
- ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Case
- ‘Expiration of Fixed-Term Contract (Submission of Resignation · Receipt of Retirement Allowance)’ Unfair Dismissal Case
[Tags]
Unfair dismissal, cancellation of hiring decision (denial of business transfer), 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 Case Law” series.
※ You can view the previous article, “‘Expiration of Fixed-Term Contract (Submission of Resignation · Receipt of Retirement Allowance)’ Unfair Dismissal Case,” in a new window.
※ You can view the list of decisions related to cancellation of hiring decision (denial of business transfer) on the “List of Decisions Related to Cancellation of Hiring Decision (Denial of Business Transfer)” page.
※ Korean version of this case: Korean article
