[Case Information] This case is a decision in which the employer prevailed (application dismissed) on the issue of “denial of employee status (standing director / registered director).” Decision date: 2026-07-03 · Decision body: Incheon Regional Labor Relations Commission · Case No.: 2026부해492 Summary of key issue: The employer, a local public corporation of considerable size, recruited a standing director through an open call for candidates issued in the name of the chair of the Executive Recommendation Committee, seeking individuals with professional expertise and capabilities. The worker applied and was appointed as a standing director. 1. Legal Implications Ⅰ. Case Overview In this case, a registered director appointed as a standing director of a local public corporation filed an application for relief with the Labor Relations Commission, alleging unfair dismissal. The Incheon Regional Labor Relations Commission dismissed the application on the ground that the applicant was not a “worker” under the Labor Standards Act. The Commission, taking into account the organizational structure of the local public corporation, the authority and remuneration scheme of the standing director, the management performance contract, and various other circumstances, determined that the individual was an officer in a relationship of mandate with the employer. The issue in this case is whether a standing director / registered director of a local public corporation qualifies as a “worker” under the Labor Standards Act to such an extent that he or she may seek relief for unfair dismissal before the Labor Relations Commission. Ⅱ. Summary of Issues The core issue was whether the standing director, though formally an officer, was in substance a worker who provided certain labor under the specific direction and supervision of the president in return for remuneration, or whether he was an officer whose employee status under the Labor Standards Act must be denied because he handled mandated affairs with independent discretion and authority. Ⅲ. Summary of the Labor Relations Commission’s Reasoning The panel held that the employer had selected the standing director through an open recruitment process conducted in the name of the chair of the Executive Recommendation Committee, seeking candidates with professional expertise and capabilities; that, as a registered director, the standing director attended board meetings and participated in management decision-making, such as deliberation and resolution on capital and budgets; that, as the head of the relevant headquarters under the management performance contract, he exercised substantial decision-making authority and discretion as the highest responsible officer of that headquarters; and that he had entered into a separate management performance contract with the president, under which he was to receive performance-based bonuses depending on the achievement of management targets, with authority to determine his annual salary and performance-based pay resting not with the president but with the Mayor of Incheon Metropolitan City. In light of these factors, the Commission found it difficult to regard the standing director as being in a subordinate labor-providing relationship. The Commission further held that, although the standing director was subject to personnel and service regulations applicable to officers, had fixed place and hours of work, and received instructions from the president, these circumstances constituted unavoidable supervision and control within the scope of managing and checking the performance of delegated management affairs. Given that the same service management applied equally to the president, it was difficult to view this as specific and individual direction and supervision over an ordinary worker. Ultimately, because the standing director did not qualify as a “worker” under the Labor Standards Act, the dismissal in this case could not be regarded as a dismissal of a “worker,” which is a prerequisite for an application for unfair dismissal relief. Accordingly, the application was dismissed and the dismissal was not found to be unfair. Ⅳ. Practical Points (From the Worker’s Perspective) Individuals serving as standing directors or registered directors of local public corporations or public institutions should carefully examine, before challenging a dismissal as unfair, whether their status is in fact that of a worker who provides labor for the purpose of wages under the specific direction and supervision of the employer, or that of an officer in a relationship of mandate who holds independent managerial authority. In particular, the greater the degree of managerial responsibility and discretion—such as participation in the board of directors, the scope of decision-making authority, the existence of a management performance contract, and who has authority to determine remuneration—the higher the likelihood that employee status will be denied. Ⅴ. Practical Points (From the Employer’s Perspective) From the standpoint of employers such as local public corporations, public institutions, and large private enterprises, it is important to clearly design and operate, in written form, the delegation and responsibility structure appropriate to officers—such as executive recommendation procedures, management performance contracts, granting of decision-making authority, and participation in the board of directors—so that the statuses of officers and workers do not become conflated. However, even if a person is formally an officer, if in substance he or she merely provides certain labor under the specific direction and supervision of a representative or similar person, employee status may be recognized. Employers should therefore revise contracts and internal regulations to reflect the actual substance of the relationship, thereby preventing future disputes over unfair dismissal or redundancy dismissals. In this type of case, accurately understanding the latest court precedents and Labor Relations Commission practice on employee status and the scope of “employer,” and systematically organizing the facts in line with those legal principles, is the key point when utilizing the assistance of experts such as Labor Law Firm Law&. 2. Matters Decided a. Case Overview and Procedural History A case in which a registered director of a local public corporation was found to be in a relationship of mandate with the employer and therefore not a “worker” under the Labor Standards Act. 3. Gist of the Decision a. Summary of the Labor Relations Commission’s Reasoning The employer, a local public corporation of considerable size, recruited a standing director through an open call for candidates issued in the name of the chair of the Executive Recommendation Committee, seeking individuals with professional expertise and capabilities. The worker applied for this position and was appointed as a standing director. As a registered director, the worker attended board meetings and participated in management decision-making processes such as the deliberation and resolution of capital and budgets. Under the management performance contract, he was the highest responsible officer of the relevant headquarters, overseeing various management activities and bearing responsibility for their outcomes, and under the employer’s internal rules he held independent decision-making authority over numerous matters, exercising substantial discretion and independently performing his duties. The worker entered into a management performance contract with the president and, if he achieved the management targets to be met during his term, he could receive corresponding performance-based bonuses. In view of the fact that adjustments to his annual salary and the payment rate of performance-based pay were determined not by the president but by the Mayor of Incheon Metropolitan City, it is difficult to regard the remuneration he received as consideration for labor provided in a subordinate relationship. Furthermore, although the worker was subject to personnel and service regulations applicable to officers and his place and hours of work were fixed, these circumstances can be seen as necessary for him to oversee and perform the delegated duties of his headquarters. The president’s work instructions likewise fall within the scope of confirming, checking, evaluating, and directing the performance of delegated affairs in a relationship of mandate, and thus cannot, by themselves, readily be evaluated as specific direction and supervision by the president over the worker’s provision of labor. In addition, the same service management applied to the president, which merely reflects the particular characteristics of the employer as a local public corporation subject to the Local Public Enterprises Act and similar statutes. In light of all of the above, the worker is in a relationship of mandate with the employer and is not a “worker” under the Labor Standards Act. [See More Related Decisions] - “Unfair Dismissal Decision on ‘Relief Interest · Refusal to Rehire (Post-Retirement Fixed-Term Employee)’” - “Unfair Dismissal Decision on ‘Business Necessity (Reassignment of Cleaning Staff)’” - “Unfair Dismissal Decision on ‘Excessive Disciplinary Measure (Negligence in Management and Supervision)’” [Tags] Unfair dismissal, denial of employee status (standing director / registered director), 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&. ※ The previous article, “Unfair Dismissal Decision on ‘Lack of Business Necessity (Transfer of Underperformer · Non-Payment of Project Incentives)’,” can be viewed in a new window. ※ A list of decisions related to denial of employee status (standing director / registered director) can be found under “List of Decisions Related to Denial of Employee Status (Standing Director / Registered Director).” ※ Korean version of this case: Korean article