Economic Groups Warn of Industrial Confusion Over Supreme Court Ruling on "Hyundai Motor Illegal Dispatch"

[Asia Economy Reporter Yoo Hyun-seok] Economic organizations expressed concerns on the 27th regarding the Supreme Court's ruling that Hyundai Motor and Kia in-house subcontracted workers who have worked for over two years in 'indirect processes' must be directly employed by the primary contractor.

The Federation of Korean Industries (FKI) issued a statement signed by Chief of Economic Affairs Choo Kwang-ho, saying, "We regret the Supreme Court's recognition of illegal dispatch," and added, "This ruling undermines the subcontracting contracts widely used in manufacturing, raising concerns about causing confusion in industrial sites." Furthermore, it stated, "There are also concerns about side effects such as unexpected damages to companies by expanding the scope of illegal dispatch recognition not only to direct production processes but also to indirect production processes like production management."

The FKI pointed out, "Unlike major advanced countries such as the United States, the United Kingdom, and Japan, Korea's dispatch system is very rigid, with limited permissible tasks and a two-year limit," and noted, "Controversies over illegal dispatch continue to arise unintentionally in the field." It also expressed hope that "the ruling reflects the reality of industrial sites where division of labor and cooperation between primary and subcontractors are necessary," and emphasized, "We hope this ruling will lead to reasonable improvements in the dispatch system, which deviates from global standards."

The Korea Employers Federation (KEF) also stated in a press release, "It is concerning that most in-house subcontracting tasks were judged as illegal dispatch," but added, "It is fortunate that the Supreme Court remanded the case for detailed review regarding parts procurement and logistics tasks that do not have a direct contract relationship with Hyundai Motor." It further explained, "Contrary to the labor sector's claim that in-house subcontracting in automobile factories is always illegal dispatch, the legality of subcontracting should be judged specifically and individually by task."

The KEF argued, "Subcontracting is a universal production method widely used worldwide, including in Germany and Japan, to improve production efficiency," and claimed, "If subcontracting is deemed illegal dispatch based on task connectivity in modern industrial society, subcontracting would be impossible from the start." It added, "If unreasonable rulings continue to classify subcontracting as illegal dispatch, it will negatively affect not only the global competitiveness of our companies but also employment."

The Korea Chamber of Commerce and Industry (KCCI) also expressed regret in a commentary on the same day, stating, "We regret the Supreme Court's ruling that Hyundai Motor's subcontracting is illegal dispatch," and warned, "As a result of this ruling, the use of subcontracting will become practically difficult, leading to decreased production efficiency and reduced competitiveness in the global market for our companies."

At the same time, it emphasized, "To resolve uncertainties and conflicts in industrial sites, legal and institutional improvements must be made promptly to broadly recognize subcontracting, as is done in major countries such as Germany and Japan."

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