Corporate trends / Performance record
Denial of Employee Status (Part-Time · Sales-Linked Commission) in Unfair Dismissal Relief Case (Unfair Dismissal 278)
- Date2026/03/13 04:04
- Read 243
[Case Information]
This case is a decision in which the employer prevailed (application dismissed) on the issue of “denial of employee status (part-time · sales-linked commission).”
Decision Body: Jeonnam Regional Labor Relations Commission
2025 Unfair Dismissal 9125 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026.01.13 · Disposition: Dismissed
Summary of key issues: After the worker converted to a part-time status, he was paid 1% of the company’s monthly sales as remuneration, making it difficult to regard such payment as consideration for the provision of labor; he only attended a weekly sales meeting (about 10 minutes), making it difficult to view him as being bound by working hours and workplace; in performing tasks of securing and introducing new clients, the worker had substantial discretion in carrying out sales management duties, making it difficult to see him as being under significant direction and supervision by the employer; the worker, in his own name, …
1. Legal Implications
Ⅰ. Case Overview
This unfair dismissal case concerns an applicant who, after converting to a part-time arrangement, received 1% of the company’s monthly sales and performed sales management work such as securing and introducing new clients, and who then filed an application with the Labor Relations Commission for a remedy for unfair dismissal. The Jeonnam Regional Labor Relations Commission first examined whether the applicant’s status fell within the definition of “employee” under the Labor Standards Act, and then determined whether he had standing as a proper party to seek a remedy for unfair dismissal.
The applicant attended a sales meeting once a week for about 10 minutes, and otherwise conducted sales activities at his own discretion while also operating a separate wholesale business in his own name.
Ⅱ. Issues
The issue in this case is:
“Whether a sales representative who, after converting to part-time status, received 1% of monthly sales, attended only a brief weekly meeting, and concurrently ran a separate wholesale business, qualifies as an ‘employee’ under the Labor Standards Act and thus has standing as a proper party to file an application for remedy for unfair dismissal with the Labor Relations Commission.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that the remuneration was set at 1% of the company’s monthly sales and thus was linked to performance/sales rather than being wages directly corresponding to working hours and effort; that, aside from a weekly sales meeting of about 10 minutes, there was virtually no constraint on working hours or workplace; and that, in the course of performing tasks to secure and introduce new clients, the applicant exercised substantial discretion in carrying out sales management duties, making it difficult to view him as being under specific and individualized direction and supervision by the employer.
Taking into account that the applicant operated a separate wholesale business in his own name and thus had weak exclusivity vis-à-vis the company, and that he was not subject to work rules or service regulations regarding matters such as service and attendance, the Commission concluded that it was difficult to regard him as an employee who provides labor in a subordinate relationship to an employer for the purpose of receiving wages under the Labor Standards Act.
Because employee status was not recognized in this case, the dismissal at issue was found not to give rise to standing as a proper party for an application for remedy for unfair dismissal, and the application was dismissed without reaching the merits.
Ⅳ. Practical Points (From the Employee’s Perspective)
To contest an unfair dismissal before the Labor Relations Commission, you must first fall within the definition of “employee” under the Labor Standards Act—that is, there must be recognition of the employer’s direction and supervision, constraints on working hours and workplace, exclusivity, and the wage nature of the remuneration. If you work in a part-time, performance-based, or sales-linked commission structure while holding a separate business registration or concurrently running another business, there is a high risk that your employee status will be denied. Accordingly, at the time of contracting, you should, as far as possible, document in writing the method of giving work instructions, whether working hours and workplace are designated, and whether work rules apply.
Even if you refer to yourself as a “freelancer” or “sales agency,” if in reality you work at certain times and places in accordance with company instructions and receive a base salary or fixed pay, employee status may still be recognized. In light of potential disputes, it is advisable to check whether a written employment contract has been executed and whether you are enrolled in the four major social insurances.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, if you pay only sales-linked commissions to sales or part-time personnel, do not designate separate working hours or workplace, and do not apply work rules, the likelihood of denying employee status increases. Conversely, if you impose fixed attendance requirements, give specific instructions, and require exclusivity, then even if the formal arrangement is that of a contractor or freelancer, the individual may still be recognized as an employee. It is important at the contracting stage to clearly define the remuneration structure (whether it is sales-linked only, or base salary plus performance pay), the scope of direction and supervision, whether exclusivity is required, and whether work rules apply, and to manage actual operations in line with those terms.
By having experts with extensive experience in unfair dismissal and employee-status disputes, such as Labor Law Firm Law&, review your contract structures in advance, you can prevent disputes over standing as a proper party or unexpected unfair dismissal disputes at the Labor Relations Commission stage.
2. Matters Determined
A. Case Overview and Procedural History
After the worker converted to part-time status, he was paid 1% of the company’s monthly sales as remuneration, making it difficult to regard this as consideration for the provision of labor; he only participated in a weekly sales meeting (taking about 10 minutes), making it difficult to view him as being bound by working hours and workplace; in performing tasks of securing and introducing new clients, the worker had substantial discretion in carrying out sales management duties, making it difficult to see him as being under significant direction and supervision by the employer; the worker operated a separate wholesale business in his own name, making it difficult to regard him as having exclusivity to the company; and he was not subject to work rules regarding service and other matters. Considering all of these factors together, it is difficult to regard him as an employee under the Labor Standards Act, and therefore he lacks standing as a proper party to file an application for remedy for unfair dismissal, etc.
3. Summary of Decision
A. Summary of the Labor Relations Commission’s Reasoning
After the worker converted to part-time status, he was paid 1% of the company’s monthly sales as remuneration, making it difficult to regard this as consideration for the provision of labor; he only participated in a weekly sales meeting (taking about 10 minutes), making it difficult to view him as being bound by working hours and workplace; in performing tasks of securing and introducing new clients, the worker had substantial discretion in carrying out sales management duties, making it difficult to see him as being under significant direction and supervision by the employer; the worker operated a separate wholesale business in his own name, making it difficult to regard him as having exclusivity to the company; and he was not subject to work rules regarding service and other matters. Considering all of these factors together, it is difficult to regard him as an employee under the Labor Standards Act, and therefore he lacks standing as a proper party to file an application for remedy for unfair dismissal, etc. /
[See More Related Decisions]
- ‘Unfair Dismissal Decision on Non-Formation of Hiring Commitment (Absence of Offer Letter)’ – Decision date: - Case number: Original Decision Upheld
- ‘Unfair Dismissal Decision on Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’
- ‘Unfair Dismissal Decision on Expression of Intent to Resign (Resignation Remark Made by Phone)’
[Tags]
Unfair dismissal, denial of employee status (part-time · sales-linked commission), 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 Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, ‘Unfair Dismissal Decision on Disciplinary Dismissal (“Get Out Right Now” Oral Notice)’, in a new window.
※ A list of decisions related to denial of employee status (part-time · sales-linked commission) can be found in the “List of Decisions Related to Denial of Employee Status (Part-Time · Sales-Linked Commission).”
※ Korean version of this case: Korean article
This case is a decision in which the employer prevailed (application dismissed) on the issue of “denial of employee status (part-time · sales-linked commission).”
Decision Body: Jeonnam Regional Labor Relations Commission
2025 Unfair Dismissal 9125 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026.01.13 · Disposition: Dismissed
Summary of key issues: After the worker converted to a part-time status, he was paid 1% of the company’s monthly sales as remuneration, making it difficult to regard such payment as consideration for the provision of labor; he only attended a weekly sales meeting (about 10 minutes), making it difficult to view him as being bound by working hours and workplace; in performing tasks of securing and introducing new clients, the worker had substantial discretion in carrying out sales management duties, making it difficult to see him as being under significant direction and supervision by the employer; the worker, in his own name, …
1. Legal Implications
Ⅰ. Case Overview
This unfair dismissal case concerns an applicant who, after converting to a part-time arrangement, received 1% of the company’s monthly sales and performed sales management work such as securing and introducing new clients, and who then filed an application with the Labor Relations Commission for a remedy for unfair dismissal. The Jeonnam Regional Labor Relations Commission first examined whether the applicant’s status fell within the definition of “employee” under the Labor Standards Act, and then determined whether he had standing as a proper party to seek a remedy for unfair dismissal.
The applicant attended a sales meeting once a week for about 10 minutes, and otherwise conducted sales activities at his own discretion while also operating a separate wholesale business in his own name.
Ⅱ. Issues
The issue in this case is:
“Whether a sales representative who, after converting to part-time status, received 1% of monthly sales, attended only a brief weekly meeting, and concurrently ran a separate wholesale business, qualifies as an ‘employee’ under the Labor Standards Act and thus has standing as a proper party to file an application for remedy for unfair dismissal with the Labor Relations Commission.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that the remuneration was set at 1% of the company’s monthly sales and thus was linked to performance/sales rather than being wages directly corresponding to working hours and effort; that, aside from a weekly sales meeting of about 10 minutes, there was virtually no constraint on working hours or workplace; and that, in the course of performing tasks to secure and introduce new clients, the applicant exercised substantial discretion in carrying out sales management duties, making it difficult to view him as being under specific and individualized direction and supervision by the employer.
Taking into account that the applicant operated a separate wholesale business in his own name and thus had weak exclusivity vis-à-vis the company, and that he was not subject to work rules or service regulations regarding matters such as service and attendance, the Commission concluded that it was difficult to regard him as an employee who provides labor in a subordinate relationship to an employer for the purpose of receiving wages under the Labor Standards Act.
Because employee status was not recognized in this case, the dismissal at issue was found not to give rise to standing as a proper party for an application for remedy for unfair dismissal, and the application was dismissed without reaching the merits.
Ⅳ. Practical Points (From the Employee’s Perspective)
To contest an unfair dismissal before the Labor Relations Commission, you must first fall within the definition of “employee” under the Labor Standards Act—that is, there must be recognition of the employer’s direction and supervision, constraints on working hours and workplace, exclusivity, and the wage nature of the remuneration. If you work in a part-time, performance-based, or sales-linked commission structure while holding a separate business registration or concurrently running another business, there is a high risk that your employee status will be denied. Accordingly, at the time of contracting, you should, as far as possible, document in writing the method of giving work instructions, whether working hours and workplace are designated, and whether work rules apply.
Even if you refer to yourself as a “freelancer” or “sales agency,” if in reality you work at certain times and places in accordance with company instructions and receive a base salary or fixed pay, employee status may still be recognized. In light of potential disputes, it is advisable to check whether a written employment contract has been executed and whether you are enrolled in the four major social insurances.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, if you pay only sales-linked commissions to sales or part-time personnel, do not designate separate working hours or workplace, and do not apply work rules, the likelihood of denying employee status increases. Conversely, if you impose fixed attendance requirements, give specific instructions, and require exclusivity, then even if the formal arrangement is that of a contractor or freelancer, the individual may still be recognized as an employee. It is important at the contracting stage to clearly define the remuneration structure (whether it is sales-linked only, or base salary plus performance pay), the scope of direction and supervision, whether exclusivity is required, and whether work rules apply, and to manage actual operations in line with those terms.
By having experts with extensive experience in unfair dismissal and employee-status disputes, such as Labor Law Firm Law&, review your contract structures in advance, you can prevent disputes over standing as a proper party or unexpected unfair dismissal disputes at the Labor Relations Commission stage.
2. Matters Determined
A. Case Overview and Procedural History
After the worker converted to part-time status, he was paid 1% of the company’s monthly sales as remuneration, making it difficult to regard this as consideration for the provision of labor; he only participated in a weekly sales meeting (taking about 10 minutes), making it difficult to view him as being bound by working hours and workplace; in performing tasks of securing and introducing new clients, the worker had substantial discretion in carrying out sales management duties, making it difficult to see him as being under significant direction and supervision by the employer; the worker operated a separate wholesale business in his own name, making it difficult to regard him as having exclusivity to the company; and he was not subject to work rules regarding service and other matters. Considering all of these factors together, it is difficult to regard him as an employee under the Labor Standards Act, and therefore he lacks standing as a proper party to file an application for remedy for unfair dismissal, etc.
3. Summary of Decision
A. Summary of the Labor Relations Commission’s Reasoning
After the worker converted to part-time status, he was paid 1% of the company’s monthly sales as remuneration, making it difficult to regard this as consideration for the provision of labor; he only participated in a weekly sales meeting (taking about 10 minutes), making it difficult to view him as being bound by working hours and workplace; in performing tasks of securing and introducing new clients, the worker had substantial discretion in carrying out sales management duties, making it difficult to see him as being under significant direction and supervision by the employer; the worker operated a separate wholesale business in his own name, making it difficult to regard him as having exclusivity to the company; and he was not subject to work rules regarding service and other matters. Considering all of these factors together, it is difficult to regard him as an employee under the Labor Standards Act, and therefore he lacks standing as a proper party to file an application for remedy for unfair dismissal, etc. /
[See More Related Decisions]
- ‘Unfair Dismissal Decision on Non-Formation of Hiring Commitment (Absence of Offer Letter)’ – Decision date: - Case number: Original Decision Upheld
- ‘Unfair Dismissal Decision on Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’
- ‘Unfair Dismissal Decision on Expression of Intent to Resign (Resignation Remark Made by Phone)’
[Tags]
Unfair dismissal, denial of employee status (part-time · sales-linked commission), 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 Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, ‘Unfair Dismissal Decision on Disciplinary Dismissal (“Get Out Right Now” Oral Notice)’, in a new window.
※ A list of decisions related to denial of employee status (part-time · sales-linked commission) can be found in the “List of Decisions Related to Denial of Employee Status (Part-Time · Sales-Linked Commission).”
※ Korean version of this case: Korean article
