This case concerns an unfair dismissal decision on the issue of “employee status (inside director · outsourcing of course management),” in which the employer ultimately prevailed (application dismissed). [Case Information] This case is a decision where the employer prevailed (dismissal of the application) on the issue of “employee status (inside director · outsourcing of course management).” Decision body: Gyeonggi Regional Labor Relations Commission, 2026Buhae2015 ○ ○ ○ Unfair Dismissal Relief Application Decision date: 2026-07-29 · Result: Application dismissed Key issue summary: … Whether the individual falls under the category of “employee.” The individual was registered as an inside director but in fact performed course management duties in the position of deputy general manager, and there is no material indicating that he exercised any independent authority over the management of the company. 1. Legal Implications Ⅰ. Case Overview This unfair dismissal relief application was heard by the Gyeonggi Regional Labor Relations Commission. The applicant was registered as an inside director, but in reality performed course management duties with the title of deputy general manager. The employer decided to outsource the course management work and pursued employment succession. In that process, the issues of whether the employment relationship had been terminated and whether there was an unfair dismissal were contested before the Labor Relations Commission. The key issues in this case were whether the applicant, who was registered as an inside director, qualified as an “employee” under the Labor Standards Act, and whether, in the course of outsourcing the course management work and pursuing employment succession, there had been an unfair dismissal by the employer. Ⅱ. Issues in Dispute The first issue in this case is whether the applicant, who was formally registered as an “inside director,” in substance qualifies as an employee under the Labor Standards Act. The second issue is whether, in circumstances where the employer outsourced the course management work, pursued employment succession, and offered the applicant an opportunity for employment succession, it can be said that there was a dismissal in which the employer unilaterally terminated the employment relationship. Ⅲ. Summary of the Labor Relations Commission’s Findings The decision panel held that the applicant falls within the scope of “employee” under the Labor Standards Act, given that he was registered as an inside director but actually performed course management duties in the position of deputy general manager, that there was no evidence that he exercised independent decision-making authority over the management of the company, and that, in terms of salary payment and application of the four major social insurances, he was treated in the same manner as ordinary employees. However, as to whether a dismissal existed, the panel found that it was difficult to regard the employer as having unilaterally terminated the employment relationship, considering that the employer, in outsourcing the course management work, pursued employment succession and offered the applicant an opportunity for employment succession, that the applicant thereafter stopped reporting to work of his own accord, and that the employer requested that he continue working and return to his original position. Ultimately, the dismissal measure in this case was found not to constitute an unfair dismissal in which the employer unilaterally terminated the employment relationship, and the applicant’s claim was rejected. Accordingly, the unfair dismissal relief application was dismissed. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, even if one is nominally designated as an “inside director,” “registered director,” “small business owner,” or similar, there is a high likelihood that the Labor Relations Commission will recognize employee status if, in substance, the individual has provided labor under the employer’s direction and supervision, in a subordinate relationship, in return for wages. However, in situations involving restructuring, outsourcing, or mass layoffs, the determination of unfair dismissal may differ significantly depending on whether the employer clearly expressed an intention to dismiss, or whether the employee was given an opportunity for employment succession or continued employment but voluntarily ceased to provide labor. It is therefore crucial to carefully secure evidence—such as contemporaneous conversations, text messages, and emails—that can prove the employer’s expression of an intention to dismiss. In addition, where the employer has explicitly proposed continued employment or reinstatement to the original position, but the employee refuses and stops reporting to work, there is a risk that this may be evaluated as a voluntary resignation. If there is a possibility of dispute, it is advisable to promptly consult with an expert (such as Labor Law Firm Law&) to determine an appropriate response strategy. Ⅴ. Practical Points (From the Employer’s Perspective) From the employer’s perspective, it is difficult to deny employee status solely on the basis of formal designations such as inside director, registered executive, or service contract. Human resources and labor management must be structured on the premise that, in practice, the individual may be deemed an employee under the Labor Standards Act, based on a comprehensive assessment of the actual duties, degree of direction and supervision, method of wage payment, and whether the person is enrolled in the four major social insurances. In particular, when outsourcing on-site work such as course management, security, or logistics, or when implementing layoffs or employment succession, it is extremely important for dispute prevention to maintain documentary and recorded evidence of how opportunities for employment succession were actually offered to specific personnel and how the employer’s intention regarding continued employment or reinstatement to the original position was communicated. When determining whether a dismissal has occurred, the Labor Relations Commission will consider comprehensively whether there was a unilateral expression by the employer of intent to terminate the employment relationship, or whether there was a voluntary cessation of work by the employee, and what negotiations or proposals took place between the parties. For a company to prevail in similar cases, it is desirable to have in place, in advance, a systematic human resources and labor management system that can objectively document and prove the procedures and communications in the outsourcing and employment succession process. This decision by the Gyeonggi Regional Labor Relations Commission illustrates that, even if a person is formally an inside director, he or she may still be substantively recognized as an employee, and that, at the same time, in the context of outsourcing and employment succession, unfair dismissal may not be found where the employer’s intention to dismiss is not clearly expressed. Those facing similar circumstances should seek assistance from a specialized organization such as Labor Law Firm Law& to develop a response strategy tailored to their specific facts. 2. Matters Decided a. Case Overview and Procedural History … Whether the individual falls under the category of “employee.” The individual was registered as an inside director but in fact performed course management duties in the position of deputy general manager, and there is no material indicating that he exercised any independent authority over the management of the company. Therefore, taking into account salary payment and application of the four major social insurances, he qualifies as an employee under the Labor Standards Act. b. Whether a dismissal existed. Considering that the employer, in outsourcing the course management work, pursued employment succession and offered the employee an opportunity for employment succession, that the employee thereafter did not report to work, and that the employer requested continued employment and reinstatement to the original position, it is difficult to regard the employer as having unilaterally terminated the employment relationship. Therefore … 3. Summary of the Decision a. Summary of the Labor Relations Commission’s Findings … Whether the individual falls under the category of “employee.” The individual was registered as an inside director but in fact performed course management duties in the position of deputy general manager, and there is no material indicating that he exercised any independent authority over the management of the company. Therefore, taking into account salary payment and application of the four major social insurances, he qualifies as an employee under the Labor Standards Act. b. Whether a dismissal existed. Considering that the employer, in outsourcing the course management work, pursued employment succession and offered the employee an opportunity for employment succession, that the employee thereafter did not report to work, and that the employer requested continued employment and reinstatement to the original position, it is difficult to regard the employer as having unilaterally terminated the employment relationship. Therefore … / [See More Related Decisions] - “Unfair Dismissal Decision on Existence of Dismissal (Refusal to Accept Resignation Letter)” - “Unfair Dismissal Decision on Expression of Intent to Resign (Resignation Remark in Telephone Call)” - “Unfair Dismissal Decision on Non-Formation of Hiring Commitment (Absence of Offer Letter)” – Decision date: - · Case result: First-instance decision upheld [Tags] Unfair dismissal, employee status (inside director · outsourcing of course management), 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&. ※ You can view the previous article, “Unfair Dismissal Decision on Existence of Dismissal (Refusal to Accept Resignation Letter),” in a new window. ※ A list of decisions related to employee status (inside director · outsourcing of course management) can be found under “List of Decisions on Employee Status (Inside Director · Outsourcing of Course Management).” ※ Korean version of this case: Korean article