Corporate trends / Performance record
Case on Denial of Employee Status (COO, Chief Operating Officer) in Unfair Dismissal (Unfair Dismissal 294)
- Date2026/03/18 04:09
- Read 190
[Case Information]
This case is a decision in which the issue of “denial of employee status (COO, Chief Operating Officer)” was concluded by upholding the first-instance decision.
Decision Body: Central Labor Relations Commission 2025Buhae1354 ○ ○ ○ Application for Reconsideration of Remedy for Unfair Dismissal
2026.01.12 · Case Result: First-instance decision upheld
Summary of Key Issues: The company’s organizational chart showed that the COO (Chief Operating Officer) held an executive position overseeing the company’s entire operations directly under the CEO; under the company’s delegation and approval rules, the worker held final decision-making authority over most tasks; even an agent has a duty to report the status of entrusted affairs to the principal, so the fact of business reporting alone does not constitute evidence that work was provided under specific and individual direction and supervision; …
1. Legal Implications
Ⅰ. Case Overview
In this case, the company’s COO (Chief Operating Officer) claimed that his dismissal constituted unfair dismissal and filed an application for remedy with the Labor Relations Commission. However, the Central Labor Relations Commission, as in the first instance, denied his status as an “employee” under the Labor Standards Act and dismissed the application.
The applicant had been dismissed while serving as COO, and this was contested by representatives including Labor Law Firm Law&. Ultimately, the Labor Relations Commission did not proceed to the merits, on the ground that he was not an employee.
Ⅱ. Summary of Issues
The issue in this case is:
“Whether a person who holds the position of Chief Operating Officer (COO) in the company’s organizational structure, in reality falls under the definition of an ‘employee’ under the Labor Standards Act, by providing work for the purpose of wages under the employer’s specific and individual direction and supervision.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The decision panel in this case found that, according to the company’s organizational chart, the COO held an executive position directly under the CEO and oversaw the company’s entire operations; that under the company’s delegation and approval rules, he had been granted final decision-making authority over most tasks and had made decisions independently; and that he was directly involved in management decision-making, such as independently formulating funding plans including personnel cost reductions and, in line with those plans, reducing staff.
In light of these facts, the panel held that the mere fact that he submitted work reports did not make it reasonable to view him as having provided work under the CEO’s specific and individual direction and supervision; that he used the corporate credit card without prior approval from, or separate reporting to, the CEO; and that there were no circumstances indicating that he was subject to the employer’s control with respect to commuting and attendance. Taking all of this together, the Commission concluded that the COO was an executive independently handling delegated affairs and therefore did not qualify as an “employee” under the Labor Standards Act.
This reasoning structure follows the Supreme Court’s standard that, even if a person formally holds an executive title, employee status may be recognized where, in substance, the person provides certain labor under the specific direction and supervision of the CEO or similar superior and receives remuneration in return. Conversely, where a person is comprehensively entrusted with a particular field of the company’s operations and runs it with substantial independence and responsibility, it is difficult to regard that person as an employee.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s perspective, even if you hold an “executive” title, you should bear in mind that there is room to argue employee status under the Labor Standards Act if, in reality, you receive specific instructions from the CEO or others regarding the content, method, time, and place of your work; are subject to the company’s work rules and service regulations; and are paid remuneration as consideration for your labor itself.
Conversely, as in this case, if you hold broad final decision-making authority, independently design company operations including personnel costs and HR, and in practice are not controlled with respect to attendance or performance of duties, you should be aware that your case may be blocked at the “employee status” stage in Labor Relations Commission procedures such as unfair dismissal remedy applications.
Those in similar positions should organize in advance matters such as: the status described in your contract, the actual direction and supervision relationship, the scope of your final decision-making authority, your authority over HR and budgeting, and whether the work rules apply to you. If there is a possibility of dispute, you should consult early with experts such as Labor Law Firm Law&.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, in order to reduce disputes over employee status for executive-level personnel such as COOs, executive directors, and managing directors, it is necessary to design the organizational chart, job descriptions, and delegation and approval rules so that it is clearly shown whether the person is an “executive independently handling delegated affairs” or a “senior manager providing labor under specific direction and supervision.”
In particular, you should note that, in the event of a dispute, the structure for approving corporate card use, the scope of authority granted over personnel costs and HR, and the method of attendance management will become key evidence of the degree of substantive independence granted.
Furthermore, regardless of whether the person is a registered director, if a full-time executive is substantively close to an employee, you should coherently establish your HR and labor-management framework—such as by executing an employment contract, clarifying the application of work rules, and enrolling the person in the four major social insurances—so as to reduce unpredictable risks in future disputes over unfair dismissal or redundancy dismissals. It is advisable to proactively review the legal status of executives and senior managers together with specialized institutions such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
Considering that, under the company’s organizational chart, the COO (Chief Operating Officer) held an executive position overseeing the company’s entire operations directly under the CEO; that under the company’s delegation and approval rules, the worker had final decision-making authority over most tasks; that even an agent has a duty to report the status of entrusted affairs to the principal, so the fact of business reporting does not itself constitute evidence that work was provided under specific and individual direction and supervision; that the worker formulated funding plans including personnel cost reductions and, in line with those plans, reduced staff; that he used the corporate credit card without reporting to or obtaining approval from the employer; and that there were no circumstances indicating that he reported his attendance to the employer—taken together, the COO cannot be regarded as an “employee” under the Labor Standards Act.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
Considering that, under the company’s organizational chart, the COO (Chief Operating Officer) held an executive position overseeing the company’s entire operations directly under the CEO; that under the company’s delegation and approval rules, the worker had final decision-making authority over most tasks; that even an agent has a duty to report the status of entrusted affairs to the principal, so the fact of business reporting does not itself constitute evidence that work was provided under specific and individual direction and supervision; that the worker formulated funding plans including personnel cost reductions and, in line with those plans, reduced staff; that he used the corporate credit card without reporting to or obtaining approval from the employer; and that there were no circumstances indicating that he reported his attendance to the employer—taken together, the COO cannot be regarded as an “employee” under the Labor Standards Act. /
[See More Related Decisions]
- “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision” – Decision date: - Case result: First-instance decision upheld
- “‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’ Unfair Dismissal Decision”
- “‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Decision”
[Tags]
Unfair dismissal, denial of employee status (COO, Chief Operating Officer), 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, “‘Lapse of Exclusion Period (People’s Sinmungo Petition)’ Unfair Dismissal Decision,” in a new window.
※ The list of decisions related to denial of employee status (COO, Chief Operating Officer) can be viewed together at “List of Decisions Related to Denial of Employee Status (COO, Chief Operating Officer).”
※ Korean version of this case: Korean article
This case is a decision in which the issue of “denial of employee status (COO, Chief Operating Officer)” was concluded by upholding the first-instance decision.
Decision Body: Central Labor Relations Commission 2025Buhae1354 ○ ○ ○ Application for Reconsideration of Remedy for Unfair Dismissal
2026.01.12 · Case Result: First-instance decision upheld
Summary of Key Issues: The company’s organizational chart showed that the COO (Chief Operating Officer) held an executive position overseeing the company’s entire operations directly under the CEO; under the company’s delegation and approval rules, the worker held final decision-making authority over most tasks; even an agent has a duty to report the status of entrusted affairs to the principal, so the fact of business reporting alone does not constitute evidence that work was provided under specific and individual direction and supervision; …
1. Legal Implications
Ⅰ. Case Overview
In this case, the company’s COO (Chief Operating Officer) claimed that his dismissal constituted unfair dismissal and filed an application for remedy with the Labor Relations Commission. However, the Central Labor Relations Commission, as in the first instance, denied his status as an “employee” under the Labor Standards Act and dismissed the application.
The applicant had been dismissed while serving as COO, and this was contested by representatives including Labor Law Firm Law&. Ultimately, the Labor Relations Commission did not proceed to the merits, on the ground that he was not an employee.
Ⅱ. Summary of Issues
The issue in this case is:
“Whether a person who holds the position of Chief Operating Officer (COO) in the company’s organizational structure, in reality falls under the definition of an ‘employee’ under the Labor Standards Act, by providing work for the purpose of wages under the employer’s specific and individual direction and supervision.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The decision panel in this case found that, according to the company’s organizational chart, the COO held an executive position directly under the CEO and oversaw the company’s entire operations; that under the company’s delegation and approval rules, he had been granted final decision-making authority over most tasks and had made decisions independently; and that he was directly involved in management decision-making, such as independently formulating funding plans including personnel cost reductions and, in line with those plans, reducing staff.
In light of these facts, the panel held that the mere fact that he submitted work reports did not make it reasonable to view him as having provided work under the CEO’s specific and individual direction and supervision; that he used the corporate credit card without prior approval from, or separate reporting to, the CEO; and that there were no circumstances indicating that he was subject to the employer’s control with respect to commuting and attendance. Taking all of this together, the Commission concluded that the COO was an executive independently handling delegated affairs and therefore did not qualify as an “employee” under the Labor Standards Act.
This reasoning structure follows the Supreme Court’s standard that, even if a person formally holds an executive title, employee status may be recognized where, in substance, the person provides certain labor under the specific direction and supervision of the CEO or similar superior and receives remuneration in return. Conversely, where a person is comprehensively entrusted with a particular field of the company’s operations and runs it with substantial independence and responsibility, it is difficult to regard that person as an employee.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s perspective, even if you hold an “executive” title, you should bear in mind that there is room to argue employee status under the Labor Standards Act if, in reality, you receive specific instructions from the CEO or others regarding the content, method, time, and place of your work; are subject to the company’s work rules and service regulations; and are paid remuneration as consideration for your labor itself.
Conversely, as in this case, if you hold broad final decision-making authority, independently design company operations including personnel costs and HR, and in practice are not controlled with respect to attendance or performance of duties, you should be aware that your case may be blocked at the “employee status” stage in Labor Relations Commission procedures such as unfair dismissal remedy applications.
Those in similar positions should organize in advance matters such as: the status described in your contract, the actual direction and supervision relationship, the scope of your final decision-making authority, your authority over HR and budgeting, and whether the work rules apply to you. If there is a possibility of dispute, you should consult early with experts such as Labor Law Firm Law&.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, in order to reduce disputes over employee status for executive-level personnel such as COOs, executive directors, and managing directors, it is necessary to design the organizational chart, job descriptions, and delegation and approval rules so that it is clearly shown whether the person is an “executive independently handling delegated affairs” or a “senior manager providing labor under specific direction and supervision.”
In particular, you should note that, in the event of a dispute, the structure for approving corporate card use, the scope of authority granted over personnel costs and HR, and the method of attendance management will become key evidence of the degree of substantive independence granted.
Furthermore, regardless of whether the person is a registered director, if a full-time executive is substantively close to an employee, you should coherently establish your HR and labor-management framework—such as by executing an employment contract, clarifying the application of work rules, and enrolling the person in the four major social insurances—so as to reduce unpredictable risks in future disputes over unfair dismissal or redundancy dismissals. It is advisable to proactively review the legal status of executives and senior managers together with specialized institutions such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
Considering that, under the company’s organizational chart, the COO (Chief Operating Officer) held an executive position overseeing the company’s entire operations directly under the CEO; that under the company’s delegation and approval rules, the worker had final decision-making authority over most tasks; that even an agent has a duty to report the status of entrusted affairs to the principal, so the fact of business reporting does not itself constitute evidence that work was provided under specific and individual direction and supervision; that the worker formulated funding plans including personnel cost reductions and, in line with those plans, reduced staff; that he used the corporate credit card without reporting to or obtaining approval from the employer; and that there were no circumstances indicating that he reported his attendance to the employer—taken together, the COO cannot be regarded as an “employee” under the Labor Standards Act.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
Considering that, under the company’s organizational chart, the COO (Chief Operating Officer) held an executive position overseeing the company’s entire operations directly under the CEO; that under the company’s delegation and approval rules, the worker had final decision-making authority over most tasks; that even an agent has a duty to report the status of entrusted affairs to the principal, so the fact of business reporting does not itself constitute evidence that work was provided under specific and individual direction and supervision; that the worker formulated funding plans including personnel cost reductions and, in line with those plans, reduced staff; that he used the corporate credit card without reporting to or obtaining approval from the employer; and that there were no circumstances indicating that he reported his attendance to the employer—taken together, the COO cannot be regarded as an “employee” under the Labor Standards Act. /
[See More Related Decisions]
- “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision” – Decision date: - Case result: First-instance decision upheld
- “‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’ Unfair Dismissal Decision”
- “‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Decision”
[Tags]
Unfair dismissal, denial of employee status (COO, Chief Operating Officer), 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, “‘Lapse of Exclusion Period (People’s Sinmungo Petition)’ Unfair Dismissal Decision,” in a new window.
※ The list of decisions related to denial of employee status (COO, Chief Operating Officer) can be viewed together at “List of Decisions Related to Denial of Employee Status (COO, Chief Operating Officer).”
※ Korean version of this case: Korean article
