Supreme Court Recognizes Dispatched Workers' Status as In-House Subcontractors at Hyundai Steel Suncheon Plant... After 12 Years and 4 Months of Litigation

Workers dispatched to subcontractors within Hyundai Steel's Suncheon plant have effectively won their lawsuit seeking confirmation that they are employees of Hyundai Steel.

Previously, in the first and second trials, the courts dismissed the plaintiffs' primary claim to confirm their status as Hyundai Steel employees on the grounds that an implicit employment contract had been established with the company or that the filing of this lawsuit constituted such a contract. However, for plaintiffs who had worked continuously at the Suncheon plant for more than two years from their date of hire, the courts recognized that under the Act on the Protection of Dispatched Workers, the company had a direct employment obligation and granted the plaintiffs' alternative claim ordering the defendant company to express its intention to employ them. The Supreme Court has now upheld this lower court ruling. This marks 12 years and 4 months since over 160 workers filed the lawsuit against the company on November 23, 2011.

Officials from the Hyundai Steel Irregular Workers' Branch of the Gwangju-Jeonnam Regional Headquarters of the Korean Metal Workers' Union are shouting slogans at a press conference for the ruling on the confirmation of worker status against Hyundai Steel, held on the 12th in front of the Supreme Court in Seocho-gu, Seoul.

The Supreme Court's Second Division (Presiding Justice Lee Dong-won) on the 12th affirmed the lower court's ruling ordering the defendant company to express its intention to employ the plaintiffs in the appeal trial of the labor status confirmation lawsuit filed by workers belonging to Hyundai Steel's in-house subcontractors.

The court stated regarding the establishment of worker dispatch, "The lower court judged that the plaintiffs were employed by the defendant's in-house partner companies and performed support processes necessary for the production of cold-rolled steel sheets and vehicle lightweight product manufacturing processes at the defendant's Suncheon plant, which constituted a worker dispatch relationship under the defendant's direction and command," adding, "The lower court's judgment is proper, and there is no error such as violating the rules of logic and experience, exceeding the limits of free evaluation of evidence, or misunderstanding the legal principles concerning worker dispatch."

On this day, the Supreme Court's Second Division delivered rulings on two cases: one filed by 113 workers (4 withdrew during the first trial) and another filed by 51 workers (3 withdrew during the first trial). Several cases had been consolidated in the lower courts.

However, the court declared the lawsuits terminated for two workers who died during the proceedings and overturned and dismissed the lower court rulings regarding some plaintiffs who reached retirement age under the collective agreement (end of the year they turn 60) and some plaintiffs who were directly employed during the lawsuit, citing lack of interest in confirmation. Additionally, the Supreme Court overturned the lower court ruling on the portion where the amount confirmed in the ordinary wage claim lawsuit was deducted from the money the company must pay and remanded the case to the Gwangju High Court.

In another case, the appellate court recognized the labor status of plaintiffs who performed mechanical maintenance work, some who handled electrical maintenance work, and those who performed utility work (supplying water, steam, compressed air, nitrogen, hydrogen, cooling water used in each process, and treating wastewater generated in each process), but the Supreme Court overturned this part and remanded it to the Gwangju High Court.

The court explained, "Mechanical maintenance work is not closely linked to the defendant's production process, and since the defendant established maintenance plans and the maintenance work was handled by in-house partner companies, it appears that the work performed by the defendant's employees and the in-house partner company employees was somewhat distinct," adding, "It is difficult to conclude solely based on the reasons stated by the lower court that the plaintiffs who performed mechanical maintenance work were in a worker dispatch relationship under the defendant's direction and command during the relevant working period."

Hyundai Hysco Co., Ltd. operated factories in Suncheon, Dangjin, and Ulsan, primarily manufacturing and selling cold-rolled steel sheets, steel pipes, steel materials, and automotive parts. The other defendant companies where the plaintiffs worked were in-house partner companies contracted with Hyundai Hysco Co., Ltd. to perform assigned tasks at the Suncheon plant.

Meanwhile, Hyundai Steel Co., Ltd. spun off and merged the cold-rolled steel sheet manufacturing and sales business of Hyundai Hysco Co., Ltd. on December 31, 2013, and on July 1, 2015, merged all remaining business divisions of Hyundai Hysco Co., Ltd., subsequently succeeding the lawsuit procedures in this case.

Earlier, the first and second trial courts examined whether ▲ the defendant company exercised significant direction and command over the partner company workers, ▲ the partner company workers were substantially incorporated into the defendant company's business, ▲ the partner companies independently exercised decisions regarding personnel and attendance of the workers, ▲ the partner companies had expertise and technical skills in their work, and ▲ the partner companies had independent corporate organizations or facilities. After considering these factors, the courts concluded that "it is reasonable to view the plaintiffs as being employed by the defendant partner companies and other partner companies and being in a worker dispatch relationship receiving direction and supervision from the defendant company at the defendant company's business sites."

The lower courts found grounds to consider the plaintiffs as workers dispatched from in-house subcontractors to Hyundai Steel, citing ▲ the plaintiffs and other in-house partner company workers performed relatively simple and repetitive tasks in processes considered part of the production of cold-rolled steel sheets at the defendant's Suncheon plant, receiving instructions and supervision from the defendant regarding task performance; the defendant prepared detailed work standards and provided them to the in-house partner companies, and the in-house partner company workers could not violate or arbitrarily change the prescribed work methods, sequences, content, speed, or location ▲ the tasks performed by the in-house partner company workers needed to be coordinated with the flow of the cold-rolled steel sheet production process at the Suncheon plant, and their working and break times were set identically to those of the defendant's employees, effectively forming a single work group per process ▲ the defendant appeared to exercise significant influence over the personnel and attendance of the in-house partner company workers, and even when an in-house partner company closed and a new one contracted, the existing workers were succeeded without substantial changes to the work content, indicating the in-house partner companies did not effectively exercise work assignment rights over their workers ▲ the in-house partner companies did not possess expertise, technical skills, or physical facilities and fixed assets necessary for the contracted work, operated only at the defendant's Suncheon plant, and most were established solely for service contracts with the defendant and closed immediately after contract termination.

Conversely, regarding the plaintiffs' primary claim that an employment contract with Hyundai Steel had already been established, the lower courts stated, "Since the defendant company continued to receive the plaintiffs' labor even after the employment obligation date (the day after two years from the start of dispatch work), the plaintiffs argue that an implicit employment contract was established with the defendant or that the filing of this lawsuit constituted an expression of intention to form an employment contract, seeking confirmation of labor status as an alternative claim. However, such circumstances alone are insufficient to recognize that the defendant implicitly expressed an intention to form an employment contract with the plaintiffs. The rights of dispatched workers under the Act on the Protection of Dispatched Workers are claims to request an expression of intention to employ from the user, not a unilateral formation right by the worker to establish an employment contract," concluding, "Therefore, it cannot be considered that an employment relationship has already been established between the plaintiffs and the defendant company, and the primary claim is dismissed."

Union: "Welcome the Court's Judgment"... "Acknowledge Illegal Dispatch and Apologize"

Immediately after the Supreme Court ruling, the Hyundai Steel Irregular Workers' Branch of the Korean Metal Workers' Union held a press conference in front of the Supreme Court in Seocho-dong, Seoul, stating, "We welcome the court's judgment recognizing regular employee status."

The Irregular Workers' Branch said, "Today, the Supreme Court definitively ruled that irregular workers at Hyundai Steel are regular employees. This is the Supreme Court ruling after 12 years and 8 months since the lawsuit began," adding, "Regarding the first group lawsuit for labor status confirmation against Hyundai Steel, the Supreme Court confirmed that Hyundai Steel's irregular workers have employee status at Hyundai Steel and ordered their conversion to regular employees."

The branch continued, "On July 19, 2011, 161 irregular workers at Hyundai Steel's Suncheon plant filed a labor status confirmation lawsuit against Hyundai Hysco (now Hyundai Steel), and on September 20, 2019, they won at the Gwangju High Court," adding, "Although they won in both the first and second trials, Hyundai Steel ignored the court rulings, disobeyed the government's direct employment correction order on February 10, 2021, and even ignored the desperate demands of irregular workers to negotiate."

They further stated, "The Yoon Seok-yeol administration proclaims the rule of law as the starting point of labor reform but only suppresses democratic unions and neglects illegal dispatch crimes by large corporations including Hyundai Steel," emphasizing, "If they want to change the dual structure of the labor market and talk about labor-management rule of law, they must first punish Hyundai Steel's illegal dispatch crimes and enforce the Ministry of Employment and Labor's correction orders."

The Irregular Workers' Branch declared, "If Hyundai Steel ultimately refuses to implement the conversion to regular employees, we will fight alongside conscientious civic groups and progressive political forces to fully realize our demands," urging Hyundai Steel to acknowledge its illegal dispatch crimes, apologize to the victims, and immediately convert all irregular workers to regular employees.

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