South Korea labour commission rules learning-materials sign-up counsellor is a worker

South Korea's National Labor Relations Commission (중앙노동위원회) has ruled that a home-based counsellor who handled member sign-up consultations for an online learning-materials company under a commission (outsourcing) contract is a worker under the Labor Standards Act, and that the company's unilateral ending of the contract was unfair dismissal. The commission announced the decision on October 8; Newsis and Yonhap reported that it was made on August 27. All three outlets described it as the first time a labour commission has recognised worker status for commission-contract sign-up counsellors at learning-materials companies. [ 1 , 2 , 3 ]

According to the commission, the counsellor, who is not named, signed and renewed one-year commission contracts with the company, an online non-face-to-face education provider, for about eight years, handling phone consultations for new members and receiving commissions based on results. Before the last contract expired, the company gave notice that it was ending the contract, citing worsening business conditions and poor performance. Yonhap and Hankook Ilbo reported that a regional labour relations commission had sided with the company when the counsellor challenged the termination as unfair dismissal. [ 1 , 2 , 3 ]

On review, the national commission said it judged worker status on the actual way the work was done and the subordinate relationship with the employer rather than the form of the contract. It found the counsellor was a regular and essential part of the company's business, that the content of the work was set by the company, and that the counsellor worked for a long period at times and in ways the company set, using an electronic system the company provided, under a unified management structure. Yonhap reported a work focus period from 2 p.m. to 9 p.m.; the company's consultation rules included sanctions for not following them. The work was managed in real time through a company work phone, a call-recording system and a messenger. [ 1 , 2 , 3 ]

The commission noted there was no fixed salary, but performance commissions were paid every month and regular-employee counsellors doing similar work received similar performance pay for consultations, so it treated the counsellor's pay as wages for labour. Because the counsellor had renewed one-year contracts for about eight years, it deemed the counsellor a worker without a fixed term, according to Newsis and Yonhap. Newsis and Hankook Ilbo reported that it found the termination did not meet the requirements of Article 24 of the Labor Standards Act for dismissal for managerial reasons; it cancelled the initial ruling and found unfair dismissal. [ 1 , 2 , 3 ]

Commission chair Park Su-geun (박수근) said employment forms are diversifying and ways of working are changing rapidly with the shift to the digital era, and that even where a commission contract has formally been signed, the substance of how a person works needs to be examined comprehensively. [ 1 , 2 , 3 ]