The Supreme Court has reaffirmed that POSCO must directly employ its contract workers or recognize their status as employees.
On July 16, the Supreme Court's second division, led by Justices Park Young-jae and Eom Sang-pil, upheld a lower court ruling that favored 369 out of 378 workers from subcontractors who filed a lawsuit against POSCO for recognition of their employment status.
However, four workers from POSCO M-Tech, who were responsible for packaging cold-rolled products, lost their case because they were not under POSCO's direct supervision. Additionally, the court dismissed the claims of five workers who had exceeded the retirement age, stating they had no standing in the lawsuit.
This ruling marks the third decision from the Supreme Court, following similar judgments in July 2022 and April 2023. Notably, it is the first time the court has recognized the employment status of workers from second-tier subcontractors.
The lawsuit was initiated by employees working in crane operation, rolling, steelmaking, and maintenance at the Pohang and Gwangyang steelworks between 2018 and 2021. The key issue was whether a substantive employment relationship existed between POSCO and the subcontracted workers. According to labor dispatch laws, if a user company employs dispatched workers for more than two years, it is obligated to hire them directly.
Earlier rulings by the first and second courts acknowledged the existence of a dispatch relationship, noting that POSCO evaluated the overall management of subcontractors through key performance indicators (KPIs) and provided detailed work standards, thereby exerting substantial control. The Supreme Court agreed with this assessment.
In this ruling, the status of 18 employees from 'Sioem Tech,' a second-tier subcontractor of POSCO Future M, was recognized for the first time, expanding the scope of illegal dispatch recognition.
As a result of the ruling, workers who have been employed for more than two years prior to the 2006 amendment of the dispatch law will have their status as POSCO employees recognized immediately, while those who meet the criteria thereafter must be directly hired by POSCO.
In response to the ruling, POSCO stated, "We respect the court's decision and will proceed with a phased direct hiring process for the winning workers, considering the need for safety at the steelworks and smooth integration of operations." Recently, POSCO announced plans to directly hire over 7,000 employees from its subcontractors.
Conversely, the Metal Workers' Union criticized the company's direct hiring plan, stating it was being pursued unilaterally without consultation with the labor union, and urged the company to engage in dialogue and reach an agreement to avoid creating another discriminatory structure instead of a complete transition to regular employment.
* This article has been translated by AI.
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