[Plaintiff, Appellant] National Agricultural Cooperative Federation (Attorney Lee Ki-chang)
[Defendant, Appellee] Korea Workers' Compensation & Welfare Service (formerly the Head of the Seoul Seobu Regional Labor Office)
[Lower Court Judgment] Seoul High Court Judgment rendered November 28, 1995, Case No. 94Gu23335
[Order]
The judgment of the court below is reversed, and the case is remanded to the Seoul High Court.
[Reasoning]
We examine the grounds of appeal.
1. According to the reasoning of the judgment below, the lower court, based on the evidence cited, found the following facts: The Plaintiff, established for the purpose of promoting the common interests and sound development of its member cooperatives, with unit cooperatives and special cooperatives, which are autonomous cooperative organizations of farmers, as its members, operates under its umbrella a workplace at Sinchon (including the Goyang Warehouse, Sajik Supermarket, and Seodaemun Market; hereinafter referred to as "the workplace in this case"), which is a business site engaged in purchasing or selling agricultural products or storing government-owned grain; at the workplace in this case, workers belonging to the Seoul Agricultural Products Comprehensive Market Labor Union (hereinafter "the non-party union") under the National Federation of Port and Transportation Workers' Unions, namely Nonparty 1 (which appears to be a clerical error for Nonparty 2) and nine others (hereinafter "the loading/unloading workers in this case"), engage in the work of loading, unloading, and warehousing; the loading/unloading workers in this case report to work each day at approximately 07:00, receive that day's work instructions from the Plaintiff's staff in charge, and carry out loading and unloading work centered around Nonparty 2, who serves as the work team leader; the content of the work involves the simple and repetitive task of unloading grain that is brought in and stacking it in the storage warehouse, and then loading grain that has been stacked in the warehouse onto the vehicles of consignors, such that although they do not receive specific work instructions from the Plaintiff in the course of performing the work, they could not go home without the Plaintiff's instruction that the work had ended; Nonparty 2 has continuously been in charge of loading/unloading work at the workplace in this case since around 1977, and the other loading/unloading workers have likewise continuously performed loading/unloading work at the same location, and in the case of the Goyang Warehouse among the workplaces in this case, loading/unloading work is performed using a conveyor installed by the Plaintiff; the loading/unloading workers in this case are paid, as compensation for their loading/unloading work, loading/unloading fees and weight-inspection fees calculated according to the government grain loading/unloading rate set annually by the Plaintiff, and the method of payment is such that the Plaintiff uniformly manages these amounts and, after accumulating them over a certain period, pays them directly to the loading/unloading workers in this case; at that time, the Plaintiff treated the above compensation as business income arising from freelance occupational income and withheld income tax at the rate of 1% pursuant to the provisions of the former Income Tax Act (Sodeugsebeop) before amendment, while the loading/unloading workers in this case each, as business income earners, reported and paid comprehensive income tax to the competent tax office; and moreover, the loading/unloading workers in this case pay union dues of 7,500 won to the non-party union to which they belong, and merely use the union office installed within the workplace in this case as a waiting room for workers, while the non-party union does not involve itself at all in the payment of compensation to, or the giving of work instructions to, the loading/unloading workers. Having found these facts, the lower court determined that, given these circumstances, although the loading/unloading workers in this case did not formally enter into an employment contract or a service contract with the Plaintiff, they nonetheless fall under the category of employees in a relationship of use and subordination (사용종속관계) with the Plaintiff, and that accordingly the Plaintiff stands in the position of a business owner (사업주) bearing the duty to pay insurance premiums with respect to the loading/unloading workers in this case, and thus the disposition imposing insurance premiums in this case is lawful.
2. (a) Comprehensively considering the relevant provisions of Articles 3, 6, and 19 of the Industrial Accident Compensation Insurance Act (산업재해보상보험법) (prior to the amendment by Act No. 4641 of December 27, 1993) and Articles 14 and 18 of the Labor Standards Act (근로기준법), a business owner who has subscribed to industrial accident compensation insurance bears the duty, as an insurance policyholder, to pay insurance premiums only with respect to employees as defined under the Labor Standards Act, that is, persons who, regardless of the type of occupation, provide labor to an employer for the purpose of receiving money or valuables from the employer as compensation for their labor, while maintaining a substantive relationship of use and subordination with the employer (see Supreme Court Decision 94Nu9290, delivered January 4, 1995).
Furthermore, in determining whether a person falls under the category of an employee under the Labor Standards Act, the following factors must be comprehensively considered: whether the content of the work is determined by the employer and whether the person is subject to work rules or service regulations; whether the person receives specific and individualized direction and supervision from the employer in the course of performing the work; whether working hours and place of work are designated by the employer and whether the person is bound thereby; whether there is substitutability of the work, such as the worker himself hiring a third party to perform the work on his behalf; ownership relations with respect to equipment, raw materials, and work tools; matters concerning compensation, including whether the nature of the compensation has the character of remuneration for labor itself, whether a basic or fixed salary is set, and whether income tax is withheld as labor income; the continuity of the labor-providing relationship and the existence and degree of exclusive affiliation with the employer; whether the person's status as an employee is recognized under other statutes, such as those concerning the social security system; and the economic and social conditions of both parties (see Supreme Court Decisions 94Da22859, delivered December 9, 1994, and 94Do2122, delivered June 30, 1995, etc.).
(b) Turning to the case at hand, as to whether a substantive relationship of use and subordination existed between the Plaintiff and the loading/unloading workers, even considering the evidence adopted by the lower court, including the testimony of Nonparty 2, the work team leader and one of the loading/unloading workers in this case belonging to the non-party union, who testified as a witness before the lower court, and the record, the following can be observed:
(1) The loading/unloading workers in this case belong to the non-party union and were dispatched to the workplace in this case by the non-party union at the Plaintiff's request; they have not entered into any individual employment contract with the Plaintiff, and provide labor according to the volume of work at the workplace in this case;
(2) There is no material whatsoever indicating that the Plaintiff had the authority to make personnel decisions regarding their hiring, personnel transfers, dismissal, or retirement, or that there exist work rules, etc. applicable to them;
(3) The reason the loading/unloading workers in this case ordinarily report to work at approximately 07:00 appears to be not because working hours are fixed, but simply to be prepared in case work arises, since it is difficult to predict the volume of work given the nature of loading/unloading work;
(4) The specific content of the work instructions that the Plaintiff is said to have given to the loading/unloading workers in this case amounts merely to designating the subject matter of the work, giving instructions for the work, and notifying them of the end of the work; in light of the fact that the content of the loading/unloading work in this case is simple and repetitive work that does not particularly require detailed instructions, and the fact that it is within the scope of instructions ordinarily given by a business operator receiving labor for the Plaintiff, who is in charge of the business of purchasing and selling agricultural products or storing government grain at the workplace in this case, to give the loading/unloading workers in this case a general indication of the day's work subject matter and content according to the workplace management and operation plan, and to notify them of the end of work, it cannot be said that the Plaintiff, through work instructions of the above degree, exercised specific and individualized direction and supervision over the loading/unloading workers in this case in the course of performing the work;
(5) Moreover, the fact that the loading/unloading workers in this case continued to work for a long period at the workplace in this case is merely attributable to the circumstance that there was a continuous volume of work at the workplace in this case; it can be readily anticipated, in light of their status, that had there been no work volume at the workplace in this case, the loading/unloading workers in this case would have worked at the workplaces of other companies requiring loading/unloading work, pursuant to the instructions of the non-party union; therefore, it cannot be concluded, on the basis of such continuous work, that the labor of the loading/unloading workers in this case was subordinate to the Plaintiff company;
(6) Meanwhile, in light of the fact that, whereas the Plaintiff had directly paid the loading/unloading fees and weight-inspection fees to the loading/unloading workers in this case, from August 1994, after the disposition in this case, the Plaintiff ceased paying them directly and instead paid them to the above Nonparty 2, the work team leader belonging to the non-party union, having him distribute the amounts to the loading/unloading workers in this case (record p. 92, written statement of the above Nonparty 2), it cannot be concluded that the Plaintiff originally bore the obligation to pay the loading/unloading fees, etc. to the loading/unloading workers in this case; rather, there arises a suspicion that the Plaintiff has been performing the affairs of the non-party union on its behalf, for convenience of administration or pursuant to an agreement with the non-party union;
(7) The Plaintiff regarded the loading/unloading workers in this case as engaged in a freelance occupation and withheld business income tax accordingly, rather than regarding them as employees and withholding Class A wage and salary income tax;
(8) In light of the fact that the office of the non-party union is installed within the workplace in this case, and that the above Nonparty 2 holds the position of work team leader, it may also be viewed that the non-party union, through the above Nonparty 2, gives instructions regarding the work of the other loading/unloading workers;
Comprehensively considering all these circumstances, including the form of the provision of labor and the form of payment of work fees by the loading/unloading workers in this case as set forth above, it is reasonable to conclude that no substantive relationship of use and subordination existed between the Plaintiff and the loading/unloading workers in this case.
(c) Nevertheless, the lower court, contrary to the foregoing, found that a substantive relationship of use and subordination existed between the Plaintiff and the loading/unloading workers in this case, who had been dispatched from the non-party union, and determined that the Plaintiff was in the position of a business owner bearing the duty to pay insurance premiums under the Industrial Accident Compensation Insurance Act; therefore, the judgment of the court below is erroneous in that it misapprehended the legal principles concerning the definition of an employee under the Labor Standards Act, and the ground of appeal pointing this out is well-founded.
Accordingly, the judgment of the court below is reversed, and the case is remanded to the court below for further hearing and determination, all Justices concurring in this opinion, and it is so decided as set forth in the Order.
Justice Kim Seok-su (Presiding Justice), Jeong Gwi-ho, Lee Don-hui (Justice in Charge), Lee Im-su