Recently, Kim & Chang obtained a decision from the Seoul Central District Court that insurance telemarketers who solicit insurance through telemarketing shall not be regarded as “employees” of the insurance company under the Labor Standards Act (“LSA”). 

The Seoul Central District Court held that the plaintiffs – insurance telemarketers who allegedly engaged in the sale of insurance to customers who call to inquire about subscription of insurance (“Inbound Call Sales”) after seeing an advertisement or the like – are not employees of the insurance company under the LSA because (i) when compared to all of the work they do, the amount of plaintiffs’ work relating to Inbound Call Sales was insignificant; (ii) except for the minimum regulation required under the Insurance Business Act, the insurance company did not significantly supervise or direct their activities; (iii) it cannot be deemed that their working hours and workplaces were under the supervision and control of the insurance company; and (iv) the plaintiffs only received performance commissions regardless of their working hours or activities. 

There was a previous case where the District Court deemed insurance telemarketers who engaged in insurance solicitation by phone to be “employees,” but since the Seoul High Court’s decision in November 2018 that they were not employees, the court tends to decide each case by carefully reviewing the applicable individual facts and how effectively such facts are presented. 

Accordingly, companies that use special type workers, such as insurance agents, would need to thoroughly examine the relevant facts, including those that may affect such workers’ employment claim, and upon the occurrence of a claim, appropriately respond through careful review.