Court: "Even a 'Registered Representative' Is a Worker If Subject to Direction and Supervision"

[Asia Economy Reporter Kim Daehyun] A court ruling has stated that even if a person is formally registered as an inside director representing a company, if they are actually directed and supervised by the real representative in their work, they should be considered a worker.

On the 6th, according to the legal community, the Seoul Administrative Court Administrative Division 3 (Chief Judge Yoo Hwanwoo) ruled in favor of the plaintiff in a lawsuit filed by the family of Mr. A, the representative of a paragliding company, against the Korea Workers' Compensation and Welfare Service, seeking cancellation of the denial of survivor benefits and funeral expenses.

Previously, Mr. A died in January 2018 after falling during a solo paragliding flight. The family claimed that Mr. A’s death was a "work-related accident" and requested survivor benefits and funeral expenses from the Korea Workers' Compensation and Welfare Service. They argued that Mr. A was only formally registered as the representative but was actually employed as a "worker" by the real business owner, Mr. B, and that the paragliding flight was for the purpose of obtaining a work-related experience flight license. Originally, the company’s representative was Mr. B, who was Mr. A’s younger brother-in-law, but it was found that the registered representative changed to Mr. A four months before the accident.

On the other hand, the Service argued, "Mr. A, as the company’s representative, cannot be considered a worker, and he died during a flight unrelated to his core duties, which was for obtaining a personal flight license," and thus rejected the claim.

The court ruled that "Mr. A was employed by Mr. B, the formal representative of the company, and under his direction and supervision, performed certain labor and received a certain wage in return," concluding that Mr. A was indeed a worker under the Labor Standards Act. Furthermore, the court added, "The company was operated according to the calculations of Mr. B, who effectively owned all the shares, and Mr. A was enrolled in national pension, health insurance, and industrial accident insurance, excluding employment insurance."

The court also determined that Mr. A died while performing work-related activities. The labor contract specified that Mr. A’s duties included "flight practice to obtain a two-seater experience flight license," and Mr. A regularly practiced flying whenever he had free time to obtain the license. The court stated, "Mr. B testified that 'two of the four in-house professional pilots were scheduled to leave, so Mr. A’s acquisition of the license was necessary,'" and added, "It appears that Mr. A needed to obtain his personal flight license as quickly as possible."

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