Korean Supreme Court takes decision in favour of precarious workers

29.07.2010

KMWU seeks a special round of collective bargaining for illegal dispatch workers at Hyundai and at other automotive and manufacturing companies after a Supreme Court ruling on an unfair dismissal of an irregular worker.

SOUTH KOREA: In a major victory for precarious workers and the Korean Metal Workers' Union, the country's Supreme Court ruled on July 22 in favour of Mr Choi a worker at Hyundai Motors, who was dismissed in February 2005 for union-related activities while working for an in-house subcontractor at Hyundai's Ulsan factory since 2002.

The Supreme Court ruled that Choi was not a subcontracted worker but an illegal dispatch worker who must be regarded as a directly employed worker by Hyundai the day after he worked more than two consecutive years at the plant.

Choi filed an application for remedy to the Labor Relations Commission (LRC) and an administrative lawsuit when he was fired in 2005. He insisted that it was an unfair dismissal and that Hyundai Motors, instead of the subcontracting company, was the real employer. However, the LRC and lower courts ruled against his argument that in-house subcontracting is in fact dispatch labour. In addition, the lower courts ruled, the Dispatch Worker Act cannot apply to Choi since dispatch work was prohibited in the manufacturing industry in 2005.

However, the Supreme Court ruled that he was a worker illegally dispatched to the Hyundai Motors rather than a subcontracted worker in that he was under the direct human resource management of Hyundai Motors after being employed by one of its subcontracting companies. In addition, it ruled again, illegal dispatch work should be under the application of the clause of the assumed 'direct employment' to serve the purpose of the Dispatch Worker Act. So, the Supreme Court sent back the case to the lower court to retry the lawsuit filed by Choi based on the judgment of the Supreme Court.

This decision on the status of an illegal dispatch worker has broad ramifications in South Korea where companies in the manufacturing sector routinely use in-house subcontractors to create a false employer. In these cases of illegal dispatch, the so-called "subcontracted" or irregular workers work inside the principal employers' facilities alongside the permanent, regular employees of the principle employer, using the expendable materials, tools and machinery belonging to the principal employer, under the instruction and subordination of the principal employer to produce products sold by the principal employer but are paid less than 50 to 60 per cent of the wages of direct employees.

At a press conference on July 26, the Korean Metal Workers' Federation welcomed the court's decision and announced, "The ruling puts a brake on discrimination and extortion by employers of irregular workers."

KMWU also stated that it will request all the employers currently hiring illegal dispatch workers, including Hyundai Motors, to a special round of collective bargaining and will proceed with a series of class action lawsuits in defence of the rights of other illegally dismissed workers.

The use of disguised employment relationships at Hyundai and elsewhere is also the subject of a complaint before the Committee on Freedom of Association of the International Labour Organization, lodged in 2006 by the KMWU, the Korean Confederation of Trade Unions and the IMF.

The complaint is against the Korean government for neglecting to protect and facilitating violation of irregular workers' rights to freedom of association, collective bargaining and collective action, in breach of ILO Conventions 87 and 98. The complaint, case number 2602, details a series of violations at Hyundai Motors plants in Ulsan, Asan and Jeonju and at Hynix/Magnachip, Kiryung Electronics and KM&I.

In its reports on the complaint, released in November 2009 and July 2008, the ILO calls on the Korean government to implement real labour law reform to remove barriers for precarious workers seeking to join a union or collectively bargain.

The IMF will continue to support KMWU in exerting pressure upon the Korean government on outstanding issues of labour law reform and to bring the country's labour laws inline with international standards.