This case concerns an unfair dismissal relief application on the issue of “denial of employee status (CFO Managing Director),” in which the employer ultimately prevailed (application dismissed). Date of Decision: 2026-07-31 · Labor Relations Commission: Gyeonggi Regional Labor Relations Commission · Case No.: 2026Buhae1992 Key Issues Summary: (i) After being promoted to director in 2022, the applicant performed the important role of Chief Financial Officer (CFO), overseeing the company’s overall finances rather than serving as a mere employee, and in 2024 was promoted again to Managing Director, thereby acquiring the status of a top-level executive and regularly participating in a decision-making body with the CEO and other C-level executives to discuss and decide the company’s key management matters; (ii) although no separate executive appointment agreement was executed between the parties, compared to the applicant… 1. Legal Implications This unfair dismissal case was heard by the Gyeonggi Regional Labor Relations Commission and reaffirmed the criteria for determining “employee” status under the Labor Standards Act through a decision dismissing the relief application on the ground that the applicant was not an employee. Relying on the fact that the applicant, as the company’s CFO and Managing Director, participated in substantive management decision-making, the Commission reached a conclusion different from that in many executive/collective redundancy cases frequently handled by Labor Law Firm Law&. Ⅰ. Case Overview The applicant was promoted to director of the company in 2022 and thereafter served as Chief Financial Officer (CFO), overseeing the company’s overall finances. In 2024, the applicant was promoted again to Managing Director and, while regularly participating in a decision-making body with the CEO and other C-level executives to discuss and decide major management issues, filed an application for relief from unfair dismissal with the Labor Relations Commission to challenge the dismissal. Before examining the merits, the Commission first considered whether the applicant qualified as an “employee” under Article 2(1)1 of the Labor Standards Act and thus had standing as a proper party to file an application for relief from unfair dismissal under Article 28 of the Labor Standards Act. Ⅱ. Issues The issue in this case is whether an applicant who held the position of a top-level executive as CFO and Managing Director of the company nonetheless qualifies in substance as an “employee” under the Labor Standards Act and therefore has standing as an applicant (party) in unfair dismissal relief proceedings before the Labor Relations Commission. Ⅲ. Summary of the Labor Relations Commission’s Reasoning The panel in this case found that, after being promoted to CFO, the applicant performed the important role of Chief Financial Officer, overseeing the company’s overall finances; that, upon promotion to Managing Director, the applicant exercised substantive management decision-making authority as a top-level executive by regularly participating in a decision-making body with the CEO and others to discuss and decide major management matters; and that, compared to the applicant’s salary before promotion to director, the annual salary had been increased substantially by approximately KRW 33 million to KRW 58 million, such that the remuneration appeared to be high-level executive compensation commensurate with the status and authority of a top executive rather than consideration for labor. In addition, although no separate executive appointment agreement was executed between the parties, even directors at a lower rank than the applicant had executed such executive appointment agreements; the applicant received special benefits distinguishing him/her from ordinary employees, such as medical examination expenses, fitness expenses, a company vehicle, and a corporate credit card; and, in terms of working conditions, the applicant was clearly treated differently from ordinary employees, including being subject to a different system for using leave and even the number of annual leave days not being ascertainable. Taking all of these factors together, the Commission held that it was difficult to regard the applicant as an “employee” under the Labor Standards Act, who provides labor under the direction and supervision of the employer in return for wages, and concluded that the applicant should be viewed as an executive whose status in substance is closer to that of an employer. This reasoning is consistent with the Supreme Court’s established criteria for determining employee status, namely that, rather than the formal contract type, one must comprehensively consider the existence of a relationship of subordination to the employer, the nature of the remuneration, whether the person holds authority over business execution and personnel/management, and differences in treatment compared to ordinary employees. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, the mere title of “director/managing director” as registered on the corporate registry does not automatically negate employee status. However, as in this case, where the individual in fact participates in deciding key management matters of the company and has clearly different remuneration, benefits, and leave systems from ordinary employees, it must be borne in mind that it will be difficult to have employee status recognized in Labor Relations Commission relief proceedings. In particular, a key issue will be whether, after promotion to an executive position, the individual continued, as before, to provide labor under the CEO’s direction and supervision at fixed working hours and at a fixed place of work, and whether the remuneration was paid as consideration for labor. Accordingly, it is advisable to keep contracts, job descriptions, and records of actual participation in meetings well organized. Executives considering filing an application for relief from unfair dismissal should first, together with a professional, examine whether their substantive status is closer to that of a “management-level person akin to the employer” or that of a “formal executive whose substance is that of an employee.” If there is a high risk that employee status will be denied, it is advisable to formulate a strategy that combines other legal avenues such as civil litigation (e.g., confirmation of invalidity of dismissal, damages claims). Ⅴ. Practical Points (From the Employer/Company Perspective) From the employer’s perspective, it should be noted that the scope of authority and responsibilities actually granted to company directors, managing directors, and C-level executives, and the way in which remuneration, benefits, and attendance management commensurate with that status are structured, directly affect the determination of employee status. As in this case, granting a CFO who oversees overall finances substantive participation in management decision-making and clearly distinguishing executive treatment from that of ordinary employees may increase the likelihood that employee status will be denied by the Labor Relations Commission in the future. However, if the company confers titles such as “director” or “managing director” only in form, without granting substantive authority over business execution or personnel/management responsibilities, while operating attendance, salary, and benefits in the same way as for ordinary employees, there is a risk that employee status will instead be recognized and that the person will fall within the scope of those entitled to apply for relief from unfair dismissal. Therefore, it is necessary to clearly design and manage the legal status of executives through institutional measures such as executing executive appointment agreements, specifying job descriptions (scope of duties and authority), documenting actual participation in board and management meetings, and differentiating remuneration and benefits from those of ordinary employees. 2. Matters Decided A. Case Overview and Procedural History A case in which it was held that the individual did not qualify as an employee under the Labor Standards Act and therefore lacked standing as a proper party to file an application for relief. 3. Summary of Decision A. Summary of the Labor Relations Commission’s Reasoning (1) Upon promotion to director in 2022, the applicant performed the important role of Chief Financial Officer (CFO), overseeing the company’s overall finances rather than serving as a mere employee, and in 2024 was promoted to Managing Director, thereby acquiring the status of a top-level executive and regularly participating in a decision-making body with the CEO and other C-level executives to discuss and decide the company’s key management matters; (2) although no separate executive appointment agreement was executed between the parties, even directors at a lower rank than the applicant had executed such executive appointment agreements; (3) compared to the applicant’s salary before promotion to director, the annual salary had been increased by KRW 33,000,000 to KRW 58,000,000, and under the annual salary agreement this amount represented high remuneration commensurate with the status and authority of a top-level executive, making it difficult to regard it as consideration for labor; (4) in terms of benefits, the applicant received special treatment different from that of ordinary employees, such as medical examination expenses, fitness expenses, a company vehicle, and a corporate credit card; and (5) the manner in which leave was used differed between ordinary employees and executives, and the number of annual leave days granted to the applicant could not be ascertained, indicating that the applicant held a different status from that of ordinary employees of the company. Considering all of these factors, the Commission determined that the applicant did not fall within the definition of an “employee” under the Labor Standards Act, who provides labor under the direction and supervision of the employer in return for wages. [See More Related Decisions] - “Unfair Dismissal Decision on ‘Excessive Disciplinary Measure (Negligence in Management/Supervision)’” - “Unfair Dismissal Decision on ‘Disciplinary Measure (Participation in Outsourced Work for Another Institution)’” - “Unfair Dismissal Decision on ‘Business Necessity (Reassignment of Cleaning Staff)’” [Tags] Unfair dismissal, denial of employee status (CFO Managing 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 ‘Excessive Disciplinary Measure (Negligence in Management/Supervision)’,” can be viewed in a new window. ※ A list of decisions related to denial of employee status (CFO Managing Director) can be viewed under “List of Decisions Related to Denial of Employee Status (CFO Managing Director).” ※ Korean version of this case: Korean article