Supreme Court: Hyundai and Kia Must Directly Employ 'In-house Partner Company Workers'

First Supreme Court Ruling Recognizes Establishment of 'Worker Dispatch Relationship'
Hyundai and Kia Motors to Compensate Workers Who Filed Lawsuit Approximately 10.7 Billion KRW

Hyundai Kia Motors Headquarters in Yangjae-dong, Seoul
Photo by Yonhap News

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has ruled that if a worker belonging to a Hyundai·Kia Motors subcontractor worked for a certain period in processes such as painting, a 'worker dispatch relationship' is established. Accordingly, the workers who filed the lawsuit will receive approximately 10.7 billion KRW, which is the difference between the wages they would have received if directly employed and the wages they actually received.

This is the first Supreme Court ruling on whether a worker dispatch relationship is established for workers employed by in-house subcontractors at Hyundai·Kia Motors production plants.

The Supreme Court's First Division (Presiding Justice Park Jeong-hwa) on the 27th upheld the lower court's partial ruling in favor of the plaintiffs in the appeal trial of 271 plaintiffs, including Mr. A, who filed a lawsuit against Kia Motors to confirm worker status.

The Supreme Court's Third Division (Presiding Justice Noh Jeong-hee) overturned the lower court's partial ruling in favor of the plaintiffs in the appeal trial of 159 plaintiffs, including Mr. B, who filed a lawsuit against Hyundai Motors to confirm worker status, and remanded the case to the Seoul High Court. Only three of the plaintiffs will be retried in the second trial, meaning that virtually most will be recognized as workers.

On this day, the Supreme Court delivered rulings on six cases related to Hyundai·Kia Motors, involving a total of 430 workers participating in the lawsuits.

Workers belonging to in-house subcontractors at Hyundai·Kia Motors who performed painting, assembly, production management, and other tasks for more than two years at plants such as Hwaseong and Ulsan claimed that their work constituted a worker dispatch relationship with Hyundai·Kia Motors as the user employer. They argued that Hyundai·Kia Motors had an obligation to directly employ them and filed lawsuits seeking confirmation of worker status and compensation for wage differences.

The first trial court ruled that since the company exercised substantial direction and supervision over the subcontractor workers, the work consignment contracts between Hyundai·Kia Motors and each in-house subcontractor were effectively worker dispatch contracts.

The second trial court also recognized the establishment of a worker dispatch relationship. However, the second trial ruled that for workers who had passed retirement age or had agreed to withdraw their lawsuits, only the wage difference portion should be paid while recognizing their worker status.

The Supreme Court recognized the establishment of a worker dispatch relationship for all processes handled by in-house subcontractor workers during the legal dispute period with the company, including indirect processes that do not directly use conveyor belts.

However, the Court determined that additional hearings are necessary for claims by workers who passed retirement age during the appeal trial or those belonging to secondary dispatch companies, where further judgment on the dispatch relationship is required.

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