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Case Precedent on Unfair Dismissal Concerning “Standing to Sue (Fewer than 5 Employees · Adjacent Corporations)” (Unfair Dismissal 49)
- Date2026/01/07 04:07
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[Case Information]
- Case title: Case precedent on unfair dismissal concerning “standing to sue (fewer than 5 employees · adjacent corporations)”
- Date of decision:
- Case number: Dismissed
- Adjudicating body: Busan Regional Labor Relations Commission 2025Buhae797 ○ ○ ○ Application for Remedy for Unfair Dismissal
2025.11.24
- Summary of outcome:
A. Identity of the employer with standing to be a party
There was no agreement among the employers to jointly manage the businesses; although the companies’ offices were adjacent, they were separated, making it difficult to regard them as a joint workplace; there was no confirmed fact that employees belonging to each company were jointly assigned to work; Company 1’s main business was wholesale and retail, while Company 2 was engaged in cold storage and warehousing, and their finance and accounting were also separated. In light of these factors, it was deemed difficult to regard the two companies as in substance a single business or workplace. Company 1 was engaged in wholesale and retail business...
1. Legal Implications
Ⅰ. Case Overview
In this case, the employee claimed to have been unfairly dismissed and filed an application for remedy with the Labor Relations Commission. The key issues were the identity of the “employer” who would be the respondent to any unfair dismissal remedy order, and the number of employees regularly employed at the workplace. The employee argued that two adjacent companies should be regarded as, in substance, a single workplace, and sought a remedy for unfair dismissal under the Labor Standards Act. However, the Busan Regional Labor Relations Commission assessed the employer and the number of regularly employed workers separately and dismissed the case. Through this precedent, Labor Law Firm Law& seeks to highlight the importance of standing to sue and the five-or-more-employee requirement in the practical handling of unfair dismissal remedy applications.
Ⅱ. Issues in Dispute
The issues in this case were: “Whether two adjacent companies can be regarded, in substance, as a single business or workplace and thus as joint employers, and, on that premise, whether the workplace can be considered one that regularly employs five or more workers so as to fall within the scope of an unfair dismissal remedy application.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that there was no agreement among the employers regarding joint management; that although the offices were adjacent, they were physically separated, making it difficult to view them as a joint workplace; that there was no confirmed fact that employees belonging to each company were jointly assigned to work; and that Company 1 was engaged in wholesale and retail business, while Company 2 was engaged in cold storage and warehousing, with their industries clearly distinguished and their finance and accounting separately maintained. In light of these factors, the panel held that it was difficult to regard the two companies as, in substance, a single business or workplace.
Taking into account that the employee had entered into an employment contract with Company 1; that the employee provided labor under the direction and supervision of Company 1 and received wages from Company 1; that the employee was enrolled in employment insurance as belonging to Company 1; and that Company 1 gave the notice of dismissal, the panel concluded that the employer with standing to be a party was Company 1 alone.
In addition, based on the materials submitted by Company 1, it was confirmed that the number of regularly employed workers was fewer than five. Accordingly, the workplace was found not to fall within the category of a “workplace regularly employing five or more workers” to which Articles 23 and 28 of the Labor Standards Act apply.
The panel therefore held that, before reaching the substantive stage of determining whether the dismissal was unfair, the application for remedy should be dismissed on the grounds that the employer lacked standing to be a party and that the five-or-more-employee requirement was not satisfied.
Ⅳ. Practical Points (From the Employee’s Perspective)
When preparing an application for remedy for unfair dismissal, an employee must first accurately identify who, in substance, is the employer in a relationship of subordination, and whether the workplace regularly employs five or more workers. The mere fact that adjacent companies share the same representative or are located close to each other is insufficient for them to be recognized as a single workplace or as joint employers. It is important to prepare sufficient objective evidence, such as which company the employment contract was actually concluded with, who exercised direction and supervision and paid wages, and how the four major social insurances were arranged.
Ⅴ. Practical Points (From the Employer’s/Company’s Perspective)
From the employer’s perspective, where multiple corporations or sole proprietorships are operated, it is advisable to clearly separate and manage organization, personnel, finance, accounting, the contracting party to employment contracts, the entity responsible for employment insurance enrollment, and the wage-paying entity, in order to reduce the risk of being misconstrued as, in substance, a single workplace. Furthermore, even if the workplace regularly employs fewer than five workers, it is important to faithfully carry out notice of dismissal, organize the grounds for dismissal, and preserve related records during the dismissal process, so as to reduce unnecessary legal risks in the event of a future dispute.
In this type of case, both employees and employers should formulate their response strategies based on an accurate understanding of the legal structure concerning “who is the employer, how the scope of the workplace is defined, and how many workers are regularly employed within that scope.”
2. Matters Adjudicated
A. Case Overview and Procedural History
A. Identity of the employer with standing to be a party
There was no agreement among the employers to jointly manage the businesses; although the companies’ offices were adjacent, they were separated, making it difficult to regard them as a joint workplace; there was no confirmed fact that employees belonging to each company were jointly assigned to work; and Company 1’s main business was wholesale and retail, while Company 2 was engaged in cold storage and warehousing, and their finance and accounting were also separated. In light of these factors, it is difficult to regard the employers as, in substance, a single business or workplace. Considering that the employee entered into an employment contract with Employer 1; that the employee provided labor under the direction and supervision of Employer 1 and received wages; that the employee was enrolled in employment insurance as belonging to Employer 1; and that Employer 1 gave the notice of dismissal, the employer with standing to be a party is determined to be Employer 1.
B. Whether the number of regularly employed workers is five or more
According to the materials submitted by Employer 1, it is confirmed that the number of regularly employed workers is fewer than five.
3. Summary of Decision
A. Summary of the Labor Relations Commission’s Reasoning
A. Identity of the employer with standing to be a party
There was no agreement among the employers to jointly manage the businesses; although the companies’ offices were adjacent, they were separated, making it difficult to regard them as a joint workplace; there was no confirmed fact that employees belonging to each company were jointly assigned to work; and Company 1’s main business was wholesale and retail, while Company 2 was engaged in cold storage and warehousing, and their finance and accounting were also separated. In light of these factors, it is difficult to regard the employers as, in substance, a single business or workplace. Considering that the employee entered into an employment contract with Employer 1; that the employee provided labor under the direction and supervision of Employer 1 and received wages; that the employee was enrolled in employment insurance as belonging to Employer 1; and that Employer 1 gave the notice of dismissal, the employer with standing to be a party is determined to be Employer 1.
B. Whether the number of regularly employed workers is five or more
According to the materials submitted by Employer 1, it is confirmed that the number of regularly employed workers is fewer than five. /
[See More Related Decisions]
- “‘Probationary Dismissal (3-Month Work Evaluation Period)’ – Unfair Dismissal Decision”
- “‘Existence of Dismissal (One-Day Daily Employment Contract)’ – Unfair Dismissal Decision” – Date of decision: – Case number: Dismissed
- “‘Lapse of Application Period (10 Days for Reconsideration)’ – Unfair Dismissal Decision” – Date of decision: – Case number: Dismissed
[Tags]
Unfair dismissal, standing to sue (fewer than 5 employees · adjacent corporations), 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, “‘Probationary Dismissal (3-Month Work Evaluation Period)’ – Unfair Dismissal Decision,” in a new window.
※ The list of decisions related to standing to sue (fewer than 5 employees · adjacent corporations) can be viewed together on the “List of Decisions Related to Standing to Sue (Fewer than 5 Employees · Adjacent Corporations)” page.
- Case title: Case precedent on unfair dismissal concerning “standing to sue (fewer than 5 employees · adjacent corporations)”
- Date of decision:
- Case number: Dismissed
- Adjudicating body: Busan Regional Labor Relations Commission 2025Buhae797 ○ ○ ○ Application for Remedy for Unfair Dismissal
2025.11.24
- Summary of outcome:
A. Identity of the employer with standing to be a party
There was no agreement among the employers to jointly manage the businesses; although the companies’ offices were adjacent, they were separated, making it difficult to regard them as a joint workplace; there was no confirmed fact that employees belonging to each company were jointly assigned to work; Company 1’s main business was wholesale and retail, while Company 2 was engaged in cold storage and warehousing, and their finance and accounting were also separated. In light of these factors, it was deemed difficult to regard the two companies as in substance a single business or workplace. Company 1 was engaged in wholesale and retail business...
1. Legal Implications
Ⅰ. Case Overview
In this case, the employee claimed to have been unfairly dismissed and filed an application for remedy with the Labor Relations Commission. The key issues were the identity of the “employer” who would be the respondent to any unfair dismissal remedy order, and the number of employees regularly employed at the workplace. The employee argued that two adjacent companies should be regarded as, in substance, a single workplace, and sought a remedy for unfair dismissal under the Labor Standards Act. However, the Busan Regional Labor Relations Commission assessed the employer and the number of regularly employed workers separately and dismissed the case. Through this precedent, Labor Law Firm Law& seeks to highlight the importance of standing to sue and the five-or-more-employee requirement in the practical handling of unfair dismissal remedy applications.
Ⅱ. Issues in Dispute
The issues in this case were: “Whether two adjacent companies can be regarded, in substance, as a single business or workplace and thus as joint employers, and, on that premise, whether the workplace can be considered one that regularly employs five or more workers so as to fall within the scope of an unfair dismissal remedy application.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that there was no agreement among the employers regarding joint management; that although the offices were adjacent, they were physically separated, making it difficult to view them as a joint workplace; that there was no confirmed fact that employees belonging to each company were jointly assigned to work; and that Company 1 was engaged in wholesale and retail business, while Company 2 was engaged in cold storage and warehousing, with their industries clearly distinguished and their finance and accounting separately maintained. In light of these factors, the panel held that it was difficult to regard the two companies as, in substance, a single business or workplace.
Taking into account that the employee had entered into an employment contract with Company 1; that the employee provided labor under the direction and supervision of Company 1 and received wages from Company 1; that the employee was enrolled in employment insurance as belonging to Company 1; and that Company 1 gave the notice of dismissal, the panel concluded that the employer with standing to be a party was Company 1 alone.
In addition, based on the materials submitted by Company 1, it was confirmed that the number of regularly employed workers was fewer than five. Accordingly, the workplace was found not to fall within the category of a “workplace regularly employing five or more workers” to which Articles 23 and 28 of the Labor Standards Act apply.
The panel therefore held that, before reaching the substantive stage of determining whether the dismissal was unfair, the application for remedy should be dismissed on the grounds that the employer lacked standing to be a party and that the five-or-more-employee requirement was not satisfied.
Ⅳ. Practical Points (From the Employee’s Perspective)
When preparing an application for remedy for unfair dismissal, an employee must first accurately identify who, in substance, is the employer in a relationship of subordination, and whether the workplace regularly employs five or more workers. The mere fact that adjacent companies share the same representative or are located close to each other is insufficient for them to be recognized as a single workplace or as joint employers. It is important to prepare sufficient objective evidence, such as which company the employment contract was actually concluded with, who exercised direction and supervision and paid wages, and how the four major social insurances were arranged.
Ⅴ. Practical Points (From the Employer’s/Company’s Perspective)
From the employer’s perspective, where multiple corporations or sole proprietorships are operated, it is advisable to clearly separate and manage organization, personnel, finance, accounting, the contracting party to employment contracts, the entity responsible for employment insurance enrollment, and the wage-paying entity, in order to reduce the risk of being misconstrued as, in substance, a single workplace. Furthermore, even if the workplace regularly employs fewer than five workers, it is important to faithfully carry out notice of dismissal, organize the grounds for dismissal, and preserve related records during the dismissal process, so as to reduce unnecessary legal risks in the event of a future dispute.
In this type of case, both employees and employers should formulate their response strategies based on an accurate understanding of the legal structure concerning “who is the employer, how the scope of the workplace is defined, and how many workers are regularly employed within that scope.”
2. Matters Adjudicated
A. Case Overview and Procedural History
A. Identity of the employer with standing to be a party
There was no agreement among the employers to jointly manage the businesses; although the companies’ offices were adjacent, they were separated, making it difficult to regard them as a joint workplace; there was no confirmed fact that employees belonging to each company were jointly assigned to work; and Company 1’s main business was wholesale and retail, while Company 2 was engaged in cold storage and warehousing, and their finance and accounting were also separated. In light of these factors, it is difficult to regard the employers as, in substance, a single business or workplace. Considering that the employee entered into an employment contract with Employer 1; that the employee provided labor under the direction and supervision of Employer 1 and received wages; that the employee was enrolled in employment insurance as belonging to Employer 1; and that Employer 1 gave the notice of dismissal, the employer with standing to be a party is determined to be Employer 1.
B. Whether the number of regularly employed workers is five or more
According to the materials submitted by Employer 1, it is confirmed that the number of regularly employed workers is fewer than five.
3. Summary of Decision
A. Summary of the Labor Relations Commission’s Reasoning
A. Identity of the employer with standing to be a party
There was no agreement among the employers to jointly manage the businesses; although the companies’ offices were adjacent, they were separated, making it difficult to regard them as a joint workplace; there was no confirmed fact that employees belonging to each company were jointly assigned to work; and Company 1’s main business was wholesale and retail, while Company 2 was engaged in cold storage and warehousing, and their finance and accounting were also separated. In light of these factors, it is difficult to regard the employers as, in substance, a single business or workplace. Considering that the employee entered into an employment contract with Employer 1; that the employee provided labor under the direction and supervision of Employer 1 and received wages; that the employee was enrolled in employment insurance as belonging to Employer 1; and that Employer 1 gave the notice of dismissal, the employer with standing to be a party is determined to be Employer 1.
B. Whether the number of regularly employed workers is five or more
According to the materials submitted by Employer 1, it is confirmed that the number of regularly employed workers is fewer than five. /
[See More Related Decisions]
- “‘Probationary Dismissal (3-Month Work Evaluation Period)’ – Unfair Dismissal Decision”
- “‘Existence of Dismissal (One-Day Daily Employment Contract)’ – Unfair Dismissal Decision” – Date of decision: – Case number: Dismissed
- “‘Lapse of Application Period (10 Days for Reconsideration)’ – Unfair Dismissal Decision” – Date of decision: – Case number: Dismissed
[Tags]
Unfair dismissal, standing to sue (fewer than 5 employees · adjacent corporations), 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, “‘Probationary Dismissal (3-Month Work Evaluation Period)’ – Unfair Dismissal Decision,” in a new window.
※ The list of decisions related to standing to sue (fewer than 5 employees · adjacent corporations) can be viewed together on the “List of Decisions Related to Standing to Sue (Fewer than 5 Employees · Adjacent Corporations)” page.
