Recent Supreme Court decision on discrimination of irregular workers

At a glance

• The Supreme Court clarified that comparisons for discriminatory treatment of irregular workers should be based on a comprehensive analysis of all relevant facts and circumstances.
• The comparison doesn't have to be with any position that the worker demands.
• The Supreme Court overturned the lower court’s decision, stating there was no basis to confirm Plaintiff A’s office worker status when he resigned.
• Tenure-based salary step-ups and office worker grade level upgrades are different concepts with different requirements.
• Meeting the required tenure does not necessarily guarantee grade level upgrades.

This article has been reproduced with the permission of the authors Weon Jung Kim, Ki Young Kim, Paul Cho, Hyeon Tae Bae, Do Hyung Lee and Hoin Lee at Kim & Chang.

Korean labour law prohibits the discriminatory treatment of irregular workers (including dispatch workers and fixed-term contract workers) compared to permanent employees engaged in the same or similar work. In this regard, the Supreme Court recently clarified the rationale for determining the specific category of permanent employee the discriminatory treatment will be measured against where there is no permanent employee engaged in the same or similar work. In this July 2024 decision, the Supreme Court confirmed that the comparison need not be against any position that the worker demands they be compared against, and that the determination should be made on the basis of a comprehensive analysis that takes into account all relevant facts and circumstances.

Plaintiff A worked as a driver at Defendant B from 1990 to 1998 when Defendant B restructured its workforce and eliminated the driver position. He then moved to Company C, a vendor of Defendant B that provided driver services, and engaged in the same driving activities but as an employee of Company C until he was rehired by Defendant B as a driver in 2016. Plaintiff A argued that he was categorised as an office worker (and not a 'production worker') at the time he left Defendant B in 1998 and should continue to be treated as an office worker, as this would have given him more favourable terms and conditions when he rejoined Defendant B in 2016. Without making a separate argument on his employment status for his tenure at Company C (ie he assumed he would be granted Defendant B employee status for his 18-year tenure at Company C and the court agreed), Plaintiff A also argued that he had received all the tenure-based salary tier step ups during his 1990 to 1998 tenure at Defendant B and that his office worker grade level would have been upgraded each time the required tenure for each office worker grade was met during 1998~2016 (ie alleging that he should be treated as an office worker of Defendant B during his time at Company C and should have been granted a much higher office worker grade when he was rehired by Defendant B because he would have satisfied the required tenure for each office worker grade had he remained employed by Defendant B). Defendant B’s counterargument was that Plaintiff A in fact should not be treated as an office worker and that he did not meet the requirements for the office worker grade level upgrades because he did not have the necessary language skills and evaluation points.

The lower court agreed with the plaintiff, holding that Plaintiff A should have been granted the higher office worker grade when he rejoined Defendant B since he received all the tenure-based salary tier step ups during his 1990 to 1998 tenure at Defendant B and he should not be discriminated against by virtue of the fact that he did not meet the office worker grade level upgrade requirements.

The Supreme Court overturned the lower court decision and remanded the case back to the High Court, accepting Defendant B’s argument that: (i) there is no basis to confirm that Plaintiff A was an office worker when he resigned from Defendant B; (ii) the tenure-based salary tier step up and office worker grade level upgrade are different concepts with different requirements and meeting the required tenure is one of many factors to consider in determining whether an office worker will get a grade level upgrade; and (iii) the fact that Plaintiff A received all the tenure-based salary tier step ups during his 1990 to 1998 tenure does not necessarily mean that his grade level would have been upgraded each time the required tenure for each office worker grade was met during 1998 to 2016. Kim & Chang represented Defendant in procuring this favorable decision, which can be a meaningful precedent that can be referred to in similar cases where discrimination against irregular workers is disputed.