[Case Information] This case is an unfair dismissal decision in which the employer prevailed (application dismissed) on the issue of “denial of employee status (business operation led by worker).” Decision body: Gyeonggi Regional Labor Relations Commission 2026Buhae2603 ○ ○ ○ Application for Remedy for Unfair Dismissal Decision date: 2026-09-04 · Case result: Dismissed Summary of key issue: The worker argued that he/she was an employee under the Labor Standards Act because he/she received a fixed remuneration and submitted work reports. However, the worker in fact took the lead in operating the business establishment, independently handled vehicle purchases and personnel management, and it was difficult to find that he/she was subject to the employer’s specific direction and supervision. 1. Legal Implications Ⅰ. Case Overview In this case, the applicant filed an application for remedy for unfair dismissal, asserting that he/she was an “employee” under the Labor Standards Act. The Gyeonggi Regional Labor Relations Commission dismissed the application. The applicant claimed employee status on the grounds that he/she received a fixed remuneration and submitted work reports, while the employer argued that the applicant was in substance an independent business operator responsible for running the establishment. Focusing on the fact that the applicant independently carried out vehicle purchases, personnel management, and separate sales activities, the Labor Relations Commission examined whether there was subordination and ultimately held that the applicant did not fall under the definition of an employee under the Labor Standards Act. Ⅱ. Summary of Issues The issue in this case is: “Whether a person who substantially took the lead in operating the business establishment, handled vehicle purchases and personnel management, and engaged in separate sales activities, can be deemed an employee under the Labor Standards Act solely because he/she received a fixed remuneration and submitted work reports, and thus whether he/she has standing as a proper party to file an application for remedy for unfair dismissal.” Ⅲ. Summary of the Labor Relations Commission’s Decision The panel in this case found that it was difficult to see that the employer specifically determined and directed/supervised the content of the work, working hours, and place of work. It further found that the applicant had independently operated the establishment, including vehicle purchases and personnel management, and had conducted business activities at his/her own calculation and risk. In addition, considering that no written employment contract was prepared, the applicant was not enrolled in the four major social insurances, and the applicant engaged in separate sales activities, it was difficult to recognize exclusivity and social insurance status as an employee. Therefore, the fact that the applicant received a fixed remuneration and submitted work reports alone was insufficient to regard the applicant as an employee under the Labor Standards Act who provided labor to the employer in a subordinate relationship for the purpose of wages. Accordingly, the dismissal in this case could not be viewed as an unfair dismissal of an employee under the Labor Standards Act, and the applicant’s application for remedy for unfair dismissal was held to be subject to dismissal due to lack of standing as an employee. Ⅳ. Practical Points (From the Worker’s Perspective) To obtain a remedy for unfair dismissal, a worker must first be recognized by the Labor Relations Commission as an “employee under the Labor Standards Act.” Where the worker independently leads the operation of the establishment and personally bears the risks related to transactions, personnel management, and sales, while merely receiving a fixed amount on a regular basis, it is very difficult to assert employee status based solely on the form of remuneration. Accordingly, when consulting with experts such as Labor Law Firm Law&, you should systematically organize and submit not only information on how remuneration is paid, but also the structure of direction and supervision, whether working hours and place of work are designated, enrollment in the four major social insurances, exclusivity, and allocation of business risk—factors used to determine employee status. Ⅴ. Practical Points (From the Employer/Company Perspective) From the employer’s perspective, it should be borne in mind that where it is unclear whether the relationship is that of a regular employee or an independent business operator (e.g., entrusted/outsourced contractor), using the worker in substance as a business operator while merely avoiding a formal employment contract and enrollment in the four major social insurances can pose significant risks in the event of a dispute. In particular, when terminating personnel or transactional relationships—such as through redundancy dismissals, contract expiration, or termination of an outsourcing agreement—it is necessary to review in advance whether the counterparty may have grounds to allege “unfair dismissal” and to examine the factors relevant to determining employee status. Since the Labor Relations Commission and the courts determine employee status by comprehensively considering actual subordination, exclusivity, the nature of remuneration, and enrollment in social insurance rather than the title of the contract, employers should prevent future disputes by proactively organizing their HR and labor structures, including contract drafting, methods of giving work instructions, remuneration systems, and social insurance arrangements. (ⓒ2026 copyright. Labor Attorney Youngseop Moon, Labor Law Firm Law&) 2. Matters Decided A. Case Overview and Procedural History The worker argued that he/she was an employee under the Labor Standards Act because he/she received a fixed remuneration and submitted work reports, etc. However, the worker took the lead in operating the establishment, independently carried out vehicle purchases and personnel management, and it was difficult to find that he/she was subject to the employer’s specific direction and supervision. In addition, considering that no written employment contract was prepared, the worker was not enrolled in the four major social insurances, and the worker engaged in separate sales activities, the worker was found not to be an employee under the Labor Standards Act who provided labor in a subordinate relationship to the employer. 3. Gist of the Decision A. Summary of the Labor Relations Commission’s Decision The worker argued that he/she was an employee under the Labor Standards Act because he/she received a fixed remuneration and submitted work reports, etc. However, the worker took the lead in operating the establishment, independently carried out vehicle purchases and personnel management, and it was difficult to find that he/she was subject to the employer’s specific direction and supervision. In addition, considering that no written employment contract was prepared, the worker was not enrolled in the four major social insurances, and the worker engaged in separate sales activities, the worker was found not to be an employee under the Labor Standards Act who provided labor in a subordinate relationship to the employer. / [See More Related Decisions] - ‘Dismissal of Application (Non-Appearance at Hearing)’ Unfair Dismissal Decision – Decision date: - Case result: Dismissed - ‘No Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision – Decision date: - Case result: First-instance decision upheld - ‘Refusal to Renew (Two-Year Cumulative Performance Indicators)’ Unfair Dismissal Decision [Tags] Unfair dismissal, denial of employee status (business operation led by worker), 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, “‘Excessive Disciplinary Measure (Traffic Accident·Office Disturbance)’ Unfair Dismissal Decision,” in a new window. ※ You can also view the list of decisions related to denial of employee status (business operation led by worker) at “List of Decisions Related to Denial of Employee Status (Business Operation Led by Worker).” ※ Korean version of this case: Korean article