Corporate trends / Performance record
Case on Unfair Dismissal Relating to “Denial of Employee Status (50% Real Estate Brokerage Commission)” (Unfair Dismissal 311)
- Date2026/03/24 04:04
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[Case Information]
This case is a decision that was concluded with the first-instance decision being upheld on the issue of “denial of employee status (50% real estate brokerage commission).”
Decision Committee: Central Labor Relations Commission 2025Buhae1425 ○ ○ ○ Application for Reexamination for Remedy of Unfair Dismissal
2026.01.09 · Case Result: First-instance decision upheld
Summary of key issues: In light of the facts that no employment contract was concluded between the parties, that the applicant was to receive 50% of the real estate brokerage commission generated from sales activities without any base salary, that there was a substantial disparity in income among those in charge of real estate brokerage work, and that the applicant was not enrolled in the four major social insurances including employment insurance but instead paid business income tax, it is difficult to regard the applicant as an employee under the Labor Standards Act. /
1. Legal Implications
Ⅰ. Case Overview
In this case, the applicant, who had been engaged in real estate brokerage work, filed an application with the Labor Relations Commission seeking a remedy on the ground that the measures taken against him/her constituted unfair dismissal. The matter proceeded to reexamination before the Central Labor Relations Commission. The Labor Relations Commission first examined whether the relationship between the applicant and the employer constituted an employment relationship under the Labor Standards Act, and then determined the admissibility of the application for remedy of unfair dismissal.
Ⅱ. Summary of Issues
The issue in this case is whether a person in charge of real estate brokerage work, who has been conducting business activities without any base salary, receiving 50% of the real estate brokerage commissions, and not being enrolled in the four major social insurances, qualifies as an “employee” under the Labor Standards Act and may therefore file an application for remedy of unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The decision panel in this case found that: no written employment contract had been concluded between the parties; it had been agreed that the applicant would receive 50% of the brokerage commission based on sales performance, without any base or fixed salary; there was a substantial disparity in income among those in charge of real estate brokerage work and the applicant appeared to bear the business risk independently; and the applicant had not been enrolled in the four major social insurances, including employment insurance, but had been paying business income tax. In light of these circumstances, the panel held that it was difficult to regard the applicant as an employee under the Labor Standards Act who provides work in a subordinate relationship to the employer for the purpose of receiving wages.
Accordingly, since the applicant was not recognized as having “employee status,” which is a prerequisite for seeking a remedy for unfair dismissal, the applicant was found not to fall within the category of employees eligible to apply for a remedy for unfair dismissal. In determining employee status, the Labor Relations Commission comprehensively considered various factors presented by the Supreme Court—such as subordination, the form of remuneration, and enrollment in social insurance—and concluded that, in this case, it was more appropriate to view the applicant’s position as closer to that of an independent business operator.
Ⅳ. Practical Points (From the Employee’s Perspective)
Those working in commission-based sales positions such as real estate brokerage, insurance solicitation, and debt collection should bear in mind that, even if the contract is labeled as a “consignment contract” or “freelance contract,” employee status is in fact recognized in not a few cases. However, where, as in this case, there is no base salary at all, income fluctuates significantly depending on performance, business income tax is reported, and the person has been conducting business independently without enrollment in the four major social insurances, there is a high risk that the Labor Relations Commission will not recognize the person as an employee under the Labor Standards Act.
Therefore, if your status is ambiguous, you should examine for yourself the elements of subordination—such as who actually determines the content of the work, whether you are bound by working hours and workplace, whether you are subject to substantive direction and supervision, and whether the company exercises personnel and disciplinary authority. If a dispute is anticipated, it is advisable to seek early consultation from a specialized institution such as Labor Law Firm Law& and establish a strategy for proving employee status.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the perspective of employers who operate with a consignment/freelance structure centered on commissions—such as real estate brokerages—if, in reality, you direct and supervise individuals like employees while merely adopting formal measures such as treating payments as business income and not enrolling them in the four major social insurances, you must be aware that employee status may later be recognized by the Labor Relations Commission or the courts. In this case, employee status was denied and the conclusion was favorable to the employer; however, this outcome resulted from a combination of factors, including the absence of a base salary, the commission structure, income disparity, and the filing of business income tax. It would therefore be dangerous to assume that employee status can be avoided merely by not enrolling individuals in the four major social insurances.
Employers should design not only the contractual form but also the actual mode of operation so that it is consistent with an independent contractor structure, and should clearly manage the scope of direction and supervision, whether working hours and workplaces are designated, and whether personnel and disciplinary authority is exercised. Furthermore, if in substance you are requiring continuous direction and supervision and exclusivity, it will be more conducive to long-term dispute prevention to consider, from the outset, converting to an employment structure based on the conclusion of an employment contract and enrollment in the four major social insurances.
This decision illustrates how crucial the determination of “employee status under the Labor Standards Act,” the most basic prerequisite in applications for remedy of unfair dismissal, can be. If similar disputes are anticipated, you should thoroughly review, at an early stage, the criteria used by the Labor Relations Commission and the courts in determining employee status, and establish a response strategy with the assistance of experts such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
In light of the facts that no employment contract was concluded between the parties, that the applicant was to receive 50% of the real estate brokerage commission generated from sales activities without any base salary, that there was a substantial disparity in income among those in charge of real estate brokerage work, and that the applicant was not enrolled in the four major social insurances including employment insurance but instead paid business income tax, it is difficult to regard the applicant as an employee under the Labor Standards Act.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Decision
In light of the facts that no employment contract was concluded between the parties, that the applicant was to receive 50% of the real estate brokerage commission generated from sales activities without any base salary, that there was a substantial disparity in income among those in charge of real estate brokerage work, and that the applicant was not enrolled in the four major social insurances including employment insurance but instead paid business income tax, it is difficult to regard the applicant as an employee under the Labor Standards Act. /
[See More Related Decisions]
- “Dismissal of Application (Non-Appearance at Hearing)” – Unfair Dismissal Decision – Date of Decision: - · Case Number: Application Dismissed
- “Non-Formation of Hiring Commitment (Absence of Offer Letter)” – Unfair Dismissal Decision – Date of Decision: - · Case Number: First-Instance Decision Upheld
- “Failure to Meet Requirements for Redundancy Dismissal (Workout Company)” – Unfair Dismissal Decision
[Tags]
Unfair dismissal, denial of employee status (50% real estate brokerage commission), recognition of employee status, others, Labor Law Firm Law&, large labor law firm, labor law firm in Samseong-dong, labor law firm near Samseong Station, labor law firm in Gangnam
※ This article is part of the “Unfair Dismissal Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, “Unfair Dismissal Decision Relating to ‘Excessive Disciplinary Measure (Consecutive Discipline and Suspension from Duty)’,” in a new window.
※ The list of decisions relating to denial of employee status (50% real estate brokerage commission) can be viewed together on the “List of Decisions Relating to Denial of Employee Status (50% Real Estate Brokerage Commission)” page.
※ Korean version of this case: Korean article
This case is a decision that was concluded with the first-instance decision being upheld on the issue of “denial of employee status (50% real estate brokerage commission).”
Decision Committee: Central Labor Relations Commission 2025Buhae1425 ○ ○ ○ Application for Reexamination for Remedy of Unfair Dismissal
2026.01.09 · Case Result: First-instance decision upheld
Summary of key issues: In light of the facts that no employment contract was concluded between the parties, that the applicant was to receive 50% of the real estate brokerage commission generated from sales activities without any base salary, that there was a substantial disparity in income among those in charge of real estate brokerage work, and that the applicant was not enrolled in the four major social insurances including employment insurance but instead paid business income tax, it is difficult to regard the applicant as an employee under the Labor Standards Act. /
1. Legal Implications
Ⅰ. Case Overview
In this case, the applicant, who had been engaged in real estate brokerage work, filed an application with the Labor Relations Commission seeking a remedy on the ground that the measures taken against him/her constituted unfair dismissal. The matter proceeded to reexamination before the Central Labor Relations Commission. The Labor Relations Commission first examined whether the relationship between the applicant and the employer constituted an employment relationship under the Labor Standards Act, and then determined the admissibility of the application for remedy of unfair dismissal.
Ⅱ. Summary of Issues
The issue in this case is whether a person in charge of real estate brokerage work, who has been conducting business activities without any base salary, receiving 50% of the real estate brokerage commissions, and not being enrolled in the four major social insurances, qualifies as an “employee” under the Labor Standards Act and may therefore file an application for remedy of unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The decision panel in this case found that: no written employment contract had been concluded between the parties; it had been agreed that the applicant would receive 50% of the brokerage commission based on sales performance, without any base or fixed salary; there was a substantial disparity in income among those in charge of real estate brokerage work and the applicant appeared to bear the business risk independently; and the applicant had not been enrolled in the four major social insurances, including employment insurance, but had been paying business income tax. In light of these circumstances, the panel held that it was difficult to regard the applicant as an employee under the Labor Standards Act who provides work in a subordinate relationship to the employer for the purpose of receiving wages.
Accordingly, since the applicant was not recognized as having “employee status,” which is a prerequisite for seeking a remedy for unfair dismissal, the applicant was found not to fall within the category of employees eligible to apply for a remedy for unfair dismissal. In determining employee status, the Labor Relations Commission comprehensively considered various factors presented by the Supreme Court—such as subordination, the form of remuneration, and enrollment in social insurance—and concluded that, in this case, it was more appropriate to view the applicant’s position as closer to that of an independent business operator.
Ⅳ. Practical Points (From the Employee’s Perspective)
Those working in commission-based sales positions such as real estate brokerage, insurance solicitation, and debt collection should bear in mind that, even if the contract is labeled as a “consignment contract” or “freelance contract,” employee status is in fact recognized in not a few cases. However, where, as in this case, there is no base salary at all, income fluctuates significantly depending on performance, business income tax is reported, and the person has been conducting business independently without enrollment in the four major social insurances, there is a high risk that the Labor Relations Commission will not recognize the person as an employee under the Labor Standards Act.
Therefore, if your status is ambiguous, you should examine for yourself the elements of subordination—such as who actually determines the content of the work, whether you are bound by working hours and workplace, whether you are subject to substantive direction and supervision, and whether the company exercises personnel and disciplinary authority. If a dispute is anticipated, it is advisable to seek early consultation from a specialized institution such as Labor Law Firm Law& and establish a strategy for proving employee status.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the perspective of employers who operate with a consignment/freelance structure centered on commissions—such as real estate brokerages—if, in reality, you direct and supervise individuals like employees while merely adopting formal measures such as treating payments as business income and not enrolling them in the four major social insurances, you must be aware that employee status may later be recognized by the Labor Relations Commission or the courts. In this case, employee status was denied and the conclusion was favorable to the employer; however, this outcome resulted from a combination of factors, including the absence of a base salary, the commission structure, income disparity, and the filing of business income tax. It would therefore be dangerous to assume that employee status can be avoided merely by not enrolling individuals in the four major social insurances.
Employers should design not only the contractual form but also the actual mode of operation so that it is consistent with an independent contractor structure, and should clearly manage the scope of direction and supervision, whether working hours and workplaces are designated, and whether personnel and disciplinary authority is exercised. Furthermore, if in substance you are requiring continuous direction and supervision and exclusivity, it will be more conducive to long-term dispute prevention to consider, from the outset, converting to an employment structure based on the conclusion of an employment contract and enrollment in the four major social insurances.
This decision illustrates how crucial the determination of “employee status under the Labor Standards Act,” the most basic prerequisite in applications for remedy of unfair dismissal, can be. If similar disputes are anticipated, you should thoroughly review, at an early stage, the criteria used by the Labor Relations Commission and the courts in determining employee status, and establish a response strategy with the assistance of experts such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
In light of the facts that no employment contract was concluded between the parties, that the applicant was to receive 50% of the real estate brokerage commission generated from sales activities without any base salary, that there was a substantial disparity in income among those in charge of real estate brokerage work, and that the applicant was not enrolled in the four major social insurances including employment insurance but instead paid business income tax, it is difficult to regard the applicant as an employee under the Labor Standards Act.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Decision
In light of the facts that no employment contract was concluded between the parties, that the applicant was to receive 50% of the real estate brokerage commission generated from sales activities without any base salary, that there was a substantial disparity in income among those in charge of real estate brokerage work, and that the applicant was not enrolled in the four major social insurances including employment insurance but instead paid business income tax, it is difficult to regard the applicant as an employee under the Labor Standards Act. /
[See More Related Decisions]
- “Dismissal of Application (Non-Appearance at Hearing)” – Unfair Dismissal Decision – Date of Decision: - · Case Number: Application Dismissed
- “Non-Formation of Hiring Commitment (Absence of Offer Letter)” – Unfair Dismissal Decision – Date of Decision: - · Case Number: First-Instance Decision Upheld
- “Failure to Meet Requirements for Redundancy Dismissal (Workout Company)” – Unfair Dismissal Decision
[Tags]
Unfair dismissal, denial of employee status (50% real estate brokerage commission), recognition of employee status, others, Labor Law Firm Law&, large labor law firm, labor law firm in Samseong-dong, labor law firm near Samseong Station, labor law firm in Gangnam
※ This article is part of the “Unfair Dismissal Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, “Unfair Dismissal Decision Relating to ‘Excessive Disciplinary Measure (Consecutive Discipline and Suspension from Duty)’,” in a new window.
※ The list of decisions relating to denial of employee status (50% real estate brokerage commission) can be viewed together on the “List of Decisions Relating to Denial of Employee Status (50% Real Estate Brokerage Commission)” page.
※ Korean version of this case: Korean article
