"Direct Employment of Non-Regular Workers"... Companies Concerned About Supreme Court Ruling

[Asia Economy Reporter Changhwan Lee] As the Supreme Court ruled that Hyundai Wia must directly employ in-house subcontracted irregular workers, concerns over a wave of lawsuits are growing, especially among manufacturers.

Similar lawsuits are underway in many industries such as automobiles and steel, and there is a high possibility of being involved in additional litigation. While the business community criticizes the ruling as an unreasonable decision that does not align with the global management standard of enhancing employment flexibility, they are struggling to devise countermeasures as consecutive losses continue.

On the 8th, the Supreme Court upheld the original ruling in the appeal trial of an employment intention claim lawsuit filed by 64 employees belonging to Hyundai Wia's in-house partner companies, stating, "The defendant shall express the intention to employ the plaintiffs."

Hyundai Wia argued that the plaintiffs belonged to in-house partner companies and were not directly supervised or controlled by the company, so there was no obligation for direct employment, but the court did not accept this.

As a result of this ruling, Hyundai Wia is in a position where it must directly employ as regular workers about 2,000 dispatched employees from partner companies. Since the total number of regular production workers is around 1,000, hiring twice that number immediately increases labor costs.

A Hyundai Wia official expressed concern, saying, "We have been struggling with management difficulties for years due to the rapid changes in the mobility market and COVID-19. We are very worried about whether we can bear the enormous burden that will arise from this ruling."

The business community sees the Hyundai Wia ruling as potentially affecting other manufacturers. Similar lawsuits are currently underway at Hyundai Motor Company, POSCO, Hyundai Steel, Kia, and Korea GM.

Hyundai Steel announced on the 7th that it would establish a subsidiary for the purpose of employing in-house subcontracted workers after losing the second trial of a labor status confirmation lawsuit filed by 109 workers at the Suncheon plant in 2019. It is understood that Hyundai Wia may also establish a subsidiary to promote direct employment of irregular workers.

The same applies to Hyundai Motor Company and Kia. In 2017, the Seoul High Court ruled in favor of 493 dispatched employees of Hyundai Motor Company and Kia in the appeal trial of a labor status confirmation lawsuit against the companies, and the Supreme Court ruling is currently pending. POSCO has also been involved in a labor status confirmation lawsuit filed by some subcontracted workers for several years.

The business community fears that such lawsuits will spread to other industries as well. With factory automation due to the Fourth Industrial Revolution and expanding overseas investment, the utilization of manpower is decreasing, and if all subcontracted workers are directly employed, companies will not be able to bear the additional costs.

The Korea Employers Federation stated, "Our country imposes stronger regulations compared to overseas, such as a complete ban on dispatching in manufacturing. The court rulings are also inconsistent depending on the case, which lowers the flexibility and predictability of corporate management."

This content was produced with the assistance of AI translation services.