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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] SEOUL, August 26, 2025 — A South Korean appellate court has overturned earlier rulings and rejected claims brought by subcontracted workers of Hyundai Steel, ruling that the company is not directly responsible for employing them.
According to industry sources on August 26, the Gwangju High Court on August 21 dismissed the appeals filed by eight members of the Hyundai Steel Suncheon Plant’s subcontractor workers’ union, who sought recognition of employment status and back pay on the grounds that Hyundai Steel was their de facto employer.
Lower courts had previously recognized the employee status of some plaintiffs, but the Supreme Court remanded the case last year citing “insufficient deliberation.” In the retrial, however, all claims were dismissed, effectively bringing the case to a close.
Labor groups are paying close attention to the ruling, as it comes just before the passage of amendments to the Labor Union and Labor Relations Adjustment Act (commonly referred to as the “No Bong Act”), which had raised expectations of broader recognition of employer responsibility for indirect employment. The court’s decision, however, may set a precedent favorable to corporations, narrowing the scope of primary employer liability.
Observers warn that the impact could ripple across industries heavily reliant on subcontracting structures, including steel, shipbuilding, and construction. Should courts continue to interpret employer responsibility narrowly, companies may face significant changes in labor cost structures and workforce management strategies.
Meanwhile, the Hyundai Steel subcontractor union is preparing to take further action. The union announced it will file a criminal complaint with prosecutors on August 27, reiterating demands for direct employment by Hyundai Steel despite the latest court ruling.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
