Supreme Court: "Department Store Floor Managers Cannot Be Considered Employees Eligible for Severance Pay"

[Asia Economy Reporter Seongpil Cho] The Supreme Court has ruled that managers who sold clothing at department stores under a consignment sales contract with Samsung C&T (formerly Cheil Industries) cannot be considered workers entitled to severance pay.

The Supreme Court's Third Division (Presiding Justice Min Yusook) announced on the 16th that it upheld the lower court's ruling, which dismissed the appeal filed by 31 department store managers, including Mr. A, who sued Samsung C&T for severance pay.

Since 1999, Mr. A and others had managed department store outlets under consignment contracts with Samsung C&T, selling clothing supplied by Samsung C&T. They filed a lawsuit claiming that they should be recognized as 'workers' under the Labor Standards Act entitled to severance pay because they provided labor in a subordinate relationship with Samsung C&T.

However, both the first and second trials rejected their claims for severance pay, citing insufficient evidence to consider the department store managers as workers. The Supreme Court also dismissed the plaintiffs' appeal, stating that "it is difficult to view the relationship between Samsung C&T and the department store managers as subordinate."

The court stated, "Factors that could affirm worker status were similarly applied to independent individual business owners such as agency owners, so this cannot be considered a significant factor in determining whether they qualify as workers."

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