1.

Key Issues in the Decision

In terms of background, this case involved a large-scale claim brought by 890 employees from 40 different subcontractor companies. The lower court, instead of examining each subcontractor and work process individually, effectively treated all claims as one general set of facts and relied heavily on the use of internal systems—such as the Manufacturing Execution System (the “MES”)—to find that a worker dispatch relationship existed between the Company and all plaintiff employees.

On appeal, our firm highlighted two core arguments:
 

(1)

Any alleged worker dispatch relationship must be analyzed separately for each subcontractor, each process, and each individual plaintiff; and

(2)

The use of internal systems (such as the MES and in-plant transport system) does not, in itself, amount to substantial direction and control over individual subcontractor employees.
 

2.

Our Litigation Strategy

First, our firm focused on the substance of each disputed process to highlight the subcontractors’ expertise and independence. In particular, our firm recharacterized the term “transport work” essentially as “heavy equipment operation,” and consistently referred to the term “heavy equipment operation work” from the outset of the appellate stage. This helped shift the perspective, which had been unfavorable to the Company at the lower court level, toward recognition of specialized work.

Second, our firm put forth substantial efforts to give the Seoul High Court a concrete view of how the work was actually performed, including submitting drone footage of on-site operations, so that the independent role of the subcontractor employees could be more clearly illustrated and understood.

Third, despite the large number of plaintiffs and subcontractors, our firm analyzed the evidence and presented arguments for each plaintiff, subcontractor, and relevant claim period, rather than relying on generalized assertions.

Finally, our firm closely examined the subcontractors’ historical contractual relationships and used formal court inquiries to demonstrate that, when the Company initially commenced operations, there was no direct contractual relationship between the Company and the subcontractors—an important factor weighing against a worker dispatch relationship.
 

3.

Court’s Reasoning

Unlike the lower court, the Seoul High Court divided the plaintiffs’ work into seven categories and assessed each one separately. For subcontractor employees performing (i) heavy equipment operation, (ii) mechanical and electrical maintenance, and (iii) environmental water treatment work, the Seoul High Court rejected the existence of a worker dispatch relationship. The main reasons were as follows:
 

• Heavy equipment operation work: When the Company requested transport services through the in-plant transport system, the subcontractor’s on-site supervisor independently determined the transport sequence, equipment, and manpower, and gave specific instructions. The subcontractors owned and operated the heavy equipment themselves and exercised independent authority over HR and attendance management functions.

• Maintenance work: This was an area requiring specialized technical skills. Even where the Company requested work through its systems, the subcontractors could decide whether or not to accept the work. It was also difficult to conclude that the Company controlled key aspects such as workload and work methods.

• Environmental water treatment work: This work constituted an ancillary process separate from steel production. It was performed according to a pre-arranged, periodic schedule, and there was insufficient evidence that subcontractor employees received concrete day-to-day work instructions directly from the Company.
   

4.

Implications

The Decision is significant in that, in assessing whether a worker dispatch relationship exists for in-plant subcontractor employees at large manufacturing companies, the Seoul High Court clearly distinguished and evaluated each specific process rather than treating all subcontracted work as a single block, which we highlighted and strongly advocated for when taking over this case on appeal.

In particular, the Seoul High Court recognized legitimate subcontracting where, in areas requiring expertise and technical capability (such as heavy equipment operation and maintenance), subcontractors owned large equipment and demonstrated substantial independence and autonomy in HR management and work planning. The Decision also reaffirms the Supreme Court’s long-standing principle that the existence of a worker dispatch relationship must be determined based on a detailed, case-by-case assessment of concrete facts.

Many steelmakers and other manufacturers outsource heavy equipment operation, maintenance, and related functions to specialized subcontractors. This Decision is therefore likely to influence future disputes involving similar in-plant subcontracting arrangements.