Corporate trends / Performance record
‘Denial of Employer Status (New Service Contractor)’ Unfair Dismissal Decision (Unfair Dismissal 511)
- Date2026/07/01 04:15
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[Case Information]
This case is a decision in which the employer prevailed (application dismissed) on the issue of “denial of employer status (new service contractor).”
Decision body: Jeju Regional Labor Relations Commission 2026Buhae127 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-06-11 · Case result: Dismissed
Summary of key issue: The employees had entered into employment contracts and worked with ○○stem, and the employer is an independent corporation separate from ○○stem that was merely selected as the new contractor by entering into a separate service contract with ○○ Tourism Development. There was no fact that it entered into employment contracts with the employees or formed any relationship of direction and supervision over them.
1. Legal Implications
Ⅰ. Case Overview
In this case, employees belonging to the existing service provider filed an application for remedy for unfair dismissal against the new contractor, and the Jeju Regional Labor Relations Commission rendered a decision. The employees argued that they had in substance been subject to a transfer of employment to the new company, or at least that the new company qualified as their employer. The Labor Relations Commission did not accept these arguments and dismissed the application.
Ⅱ. Summary of Issues
The issue in this case is whether “employees belonging to an existing service provider can have employer status recognized in relation to a separate corporation that newly won the service contract, and furthermore, whether they can claim a remedy for unfair dismissal on the basis of a transfer of employment or a promise of transfer of employment.”
Ⅲ. Summary of the Labor Relations Commission’s Findings
The panel in this case found that it was difficult to recognize an employment-subordination relationship under the Labor Standards Act between the applicants and the new company, given that the employees had entered into employment contracts and worked with the existing company (○○stem); that the new contractor is an independent corporation separate from ○○stem and had only entered into a service contract with the ordering party (○○ Tourism Development); and that there was no fact that it had entered into employment contracts with the employees or formed any specific relationship of direction and supervision over them.
It also acknowledged that the employer’s recruitment notice contained language such as “preference for candidates with relevant work experience,” and that, in the course of recruitment, the employer referred to applicants’ career and reference information. However, it viewed this as no more than ordinary use of materials to assess applicants’ suitability.
The dismissal in this case was held not to constitute unfair dismissal on the grounds that it was difficult to find that the employer had promised to take over all existing employees, or had even implicitly expressed an intention to enter into employment contracts with them.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s perspective, one must be aware that a change in service providers does not automatically result in recognition of transfer of employment or employer status in relation to the new contractor. It is important to prepare specific evidence to prove whether there was a “substantive employment-subordination relationship,” such as whether the new company actually entered into employment contracts, paid wages, and directly managed work instructions, working hours, and place of work.
In addition, one should bear in mind that language such as “preference for experienced candidates” in a recruitment notice, or general expectations formed during interviews, does not readily lead to recognition of a promise of transfer of employment or a legitimate expectation interest.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the standpoint of an employer newly receiving a service contract, even when utilizing existing personnel, it is advisable to refrain as much as possible from using expressions in recruitment notices, interviews, or evaluation processes that may cause misunderstanding, such as “transfer of employment” or “all employees to be taken over.” To reduce disputes over employee status and employer status, it is necessary to clearly distinguish between those with whom employment contracts have actually been concluded and those with whom they have not, and to clearly document, in writing, who exercises direction and supervision, who designates working hours and place of work, and who is responsible for wage payment.
Furthermore, when using the career and reference information of employees of the existing service provider, it should be made clear that this is only reference material for determining recruitment suitability, and that it should not be misconstrued as a promise of transfer of employment. It is advisable to prepare explanatory and guidance language to that effect.
Taken together, in unfair dismissal and redundancy dismissal disputes, both employees and employers should bear in mind that the core issue is not the “formal contractual relationship,” but rather the substantive reality of to whom the employee was subordinate in providing labor and who bore the obligation to pay wages.
2. Matters Decided
a. Case Overview and Procedural History
The employees had entered into employment contracts and worked with ○○stem, and the employer is an independent corporation separate from ○○stem that was merely selected as the new contractor by entering into a separate service contract with ○○ Tourism Development. There was no fact that it entered into employment contracts with the employees or formed any relationship of direction and supervision over them. It is also acknowledged that the employer’s recruitment notice stated that applicants with relevant work experience would be given priority in hiring, and that, in the course of recruitment, the employer referred to applicants’ career and reference information. However, this is no more than the use of materials to assess applicants’ suitability. Based on these circumstances alone, it cannot be found that the employer promised to take over all existing employees or that it intended to enter into employment contracts with them…
3. Gist of the Decision
a. Summary of the Labor Relations Commission’s Findings
The employees had entered into employment contracts and worked with ○○stem, and the employer is an independent corporation separate from ○○stem that was merely selected as the new contractor by entering into a separate service contract with ○○ Tourism Development. There was no fact that it entered into employment contracts with the employees or formed any relationship of direction and supervision over them. It is also acknowledged that the employer’s recruitment notice stated that applicants with relevant work experience would be given priority in hiring, and that, in the course of recruitment, the employer referred to applicants’ career and reference information. However, this is no more than the use of materials to assess applicants’ suitability. Based on these circumstances alone, it cannot be found that the employer promised to take over all existing employees or that it intended to enter into employment contracts with them… /
[See More Related Decisions]
- ‘Employee Status · Expiration of Contract Term (10 Days of Work as a Daily Worker)’ Related Unfair Dismissal Decision
- ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Related Unfair Dismissal Decision – Date of decision: – Case result: First-instance decision upheld
- ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’ Related Unfair Dismissal Decision
[Tags]
Unfair dismissal, denial of employer status (new service contractor), 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 one of the “Unfair Dismissal Decision” series by Labor Law Firm Law&.
※ You can view the previous article, “‘Employee Status · Expiration of Contract Term (10 Days of Work as a Daily Worker)’ Related Unfair Dismissal Decision,” in a new window.
※ The list of decisions related to denial of employer status (new service contractor) can be viewed together in the “List of Decisions Related to Denial of Employer Status (New Service Contractor).”
※ 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 employer status (new service contractor).”
Decision body: Jeju Regional Labor Relations Commission 2026Buhae127 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-06-11 · Case result: Dismissed
Summary of key issue: The employees had entered into employment contracts and worked with ○○stem, and the employer is an independent corporation separate from ○○stem that was merely selected as the new contractor by entering into a separate service contract with ○○ Tourism Development. There was no fact that it entered into employment contracts with the employees or formed any relationship of direction and supervision over them.
1. Legal Implications
Ⅰ. Case Overview
In this case, employees belonging to the existing service provider filed an application for remedy for unfair dismissal against the new contractor, and the Jeju Regional Labor Relations Commission rendered a decision. The employees argued that they had in substance been subject to a transfer of employment to the new company, or at least that the new company qualified as their employer. The Labor Relations Commission did not accept these arguments and dismissed the application.
Ⅱ. Summary of Issues
The issue in this case is whether “employees belonging to an existing service provider can have employer status recognized in relation to a separate corporation that newly won the service contract, and furthermore, whether they can claim a remedy for unfair dismissal on the basis of a transfer of employment or a promise of transfer of employment.”
Ⅲ. Summary of the Labor Relations Commission’s Findings
The panel in this case found that it was difficult to recognize an employment-subordination relationship under the Labor Standards Act between the applicants and the new company, given that the employees had entered into employment contracts and worked with the existing company (○○stem); that the new contractor is an independent corporation separate from ○○stem and had only entered into a service contract with the ordering party (○○ Tourism Development); and that there was no fact that it had entered into employment contracts with the employees or formed any specific relationship of direction and supervision over them.
It also acknowledged that the employer’s recruitment notice contained language such as “preference for candidates with relevant work experience,” and that, in the course of recruitment, the employer referred to applicants’ career and reference information. However, it viewed this as no more than ordinary use of materials to assess applicants’ suitability.
The dismissal in this case was held not to constitute unfair dismissal on the grounds that it was difficult to find that the employer had promised to take over all existing employees, or had even implicitly expressed an intention to enter into employment contracts with them.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s perspective, one must be aware that a change in service providers does not automatically result in recognition of transfer of employment or employer status in relation to the new contractor. It is important to prepare specific evidence to prove whether there was a “substantive employment-subordination relationship,” such as whether the new company actually entered into employment contracts, paid wages, and directly managed work instructions, working hours, and place of work.
In addition, one should bear in mind that language such as “preference for experienced candidates” in a recruitment notice, or general expectations formed during interviews, does not readily lead to recognition of a promise of transfer of employment or a legitimate expectation interest.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the standpoint of an employer newly receiving a service contract, even when utilizing existing personnel, it is advisable to refrain as much as possible from using expressions in recruitment notices, interviews, or evaluation processes that may cause misunderstanding, such as “transfer of employment” or “all employees to be taken over.” To reduce disputes over employee status and employer status, it is necessary to clearly distinguish between those with whom employment contracts have actually been concluded and those with whom they have not, and to clearly document, in writing, who exercises direction and supervision, who designates working hours and place of work, and who is responsible for wage payment.
Furthermore, when using the career and reference information of employees of the existing service provider, it should be made clear that this is only reference material for determining recruitment suitability, and that it should not be misconstrued as a promise of transfer of employment. It is advisable to prepare explanatory and guidance language to that effect.
Taken together, in unfair dismissal and redundancy dismissal disputes, both employees and employers should bear in mind that the core issue is not the “formal contractual relationship,” but rather the substantive reality of to whom the employee was subordinate in providing labor and who bore the obligation to pay wages.
2. Matters Decided
a. Case Overview and Procedural History
The employees had entered into employment contracts and worked with ○○stem, and the employer is an independent corporation separate from ○○stem that was merely selected as the new contractor by entering into a separate service contract with ○○ Tourism Development. There was no fact that it entered into employment contracts with the employees or formed any relationship of direction and supervision over them. It is also acknowledged that the employer’s recruitment notice stated that applicants with relevant work experience would be given priority in hiring, and that, in the course of recruitment, the employer referred to applicants’ career and reference information. However, this is no more than the use of materials to assess applicants’ suitability. Based on these circumstances alone, it cannot be found that the employer promised to take over all existing employees or that it intended to enter into employment contracts with them…
3. Gist of the Decision
a. Summary of the Labor Relations Commission’s Findings
The employees had entered into employment contracts and worked with ○○stem, and the employer is an independent corporation separate from ○○stem that was merely selected as the new contractor by entering into a separate service contract with ○○ Tourism Development. There was no fact that it entered into employment contracts with the employees or formed any relationship of direction and supervision over them. It is also acknowledged that the employer’s recruitment notice stated that applicants with relevant work experience would be given priority in hiring, and that, in the course of recruitment, the employer referred to applicants’ career and reference information. However, this is no more than the use of materials to assess applicants’ suitability. Based on these circumstances alone, it cannot be found that the employer promised to take over all existing employees or that it intended to enter into employment contracts with them… /
[See More Related Decisions]
- ‘Employee Status · Expiration of Contract Term (10 Days of Work as a Daily Worker)’ Related Unfair Dismissal Decision
- ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Related Unfair Dismissal Decision – Date of decision: – Case result: First-instance decision upheld
- ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’ Related Unfair Dismissal Decision
[Tags]
Unfair dismissal, denial of employer status (new service contractor), 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 one of the “Unfair Dismissal Decision” series by Labor Law Firm Law&.
※ You can view the previous article, “‘Employee Status · Expiration of Contract Term (10 Days of Work as a Daily Worker)’ Related Unfair Dismissal Decision,” in a new window.
※ The list of decisions related to denial of employer status (new service contractor) can be viewed together in the “List of Decisions Related to Denial of Employer Status (New Service Contractor).”
※ Korean version of this case: Korean article
