The Cheongju District Court issued a ruling on April 9, 2025, denying the worker dispatch relationship between the plaintiffs, who were employees of Company B (i.e., a contractor that performed agricultural waste disposal services), and Agency A, a quasi-governmental agency (the “Defendant”) (Cheongju District Court Decision 2022gahap52546, April 9, 2025).
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Court’s Decision
The plaintiffs filed a lawsuit against the Defendant seeking an order for employment and damages, claiming that the service agreement with the Defendant constituted an illegal dispatching arrangement. Their claims were based on the following grounds: (i) Company B was established by the Defendant; (ii) the Defendant supervised and directed the plaintiffs through task directives and various regulations; (iii) the Defendant instructed or supervised the plaintiffs through its supervisors and issued various guideline documents to the plaintiffs; and (iv) the Defendant determined the number of employees and wages for Company B.
However, the District Court rejected the plaintiffs’ claims, finding that the work outsourced by the Defendant to Company B was clearly defined and required specific expertise and technical skills. The Court also found no evidence that the Defendant directed or supervised the plaintiffs’ work, and confirmed that a contracting entity may legitimately specify the minimum staffing requirements necessary to ensure quality work performance.
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Implications
This ruling is the first to address worker dispatch relationships between public institutions and private company employees following the Supreme Court’s recent decision denying a worker dispatch relationship between Company H and employees of a contractor responsible for maintaining IT equipment on highways (Supreme Court Decision 2024da215993, May 30, 2024). The significance of this case lies in how the District Court carefully examined task directives and regulations to determine whether they constituted supervision and direction. Further, the District Court also clarified that specifying minimum staffing requirements does not indicate a worker dispatch relationship.
Additionally, this ruling reaffirms that the specificity of outsourced work and its clear distinction from the contracting entity’s core operations remain crucial criteria in differentiating between subcontracting and worker dispatch arrangements.
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Kim & Chang represented the Defendant and secured this favorable outcome through a comprehensive analysis of worker dispatch jurisprudence and the specific facts at hand. We successfully demonstrated that determining whether employees are under a service-recipient’s direction requires individual assessment based on Supreme Court criteria, and that certain interactions inherent in legitimate contracting relationships should not be misconstrued as evidence of a worker dispatching arrangement.
Illegal dispatch disputes continue to emerge across different industries—including public institutions—in various forms of contractual arrangements (e.g., service contract, entrustment, etc.). When facing ongoing or imminent disputes, businesses often find it challenging to implement preventive measures due to potential legal challenges. Companies should therefore proactively analyze risks and implement appropriate safeguards. Since outsourced work carries inherent risks that are often difficult to mitigate, companies should carefully evaluate which functions to outsource from the initial stage of the selection process.
[Korean Version]
