The Supreme Court found that most workers employed by partner companies in the form of "in-house subcontracting" at POSCO's Pohang and Gwangyang steelworks are currently in an illegal dispatch status and should be regarded as POSCO employees. The court drew distinctions based on the duties of the partner-company employees, ruling that those who handled packaging of cold-rolled products fell under permissible subcontracting and were not POSCO employees.
The Supreme Court's First Division (presiding Justice Shin Sook-hee) on the 16th finalized the lower court rulings that found in favor of 215 of the 223 partner-company employees who filed two lawsuits seeking confirmation of employee status against POSCO.
The court dismissed the suit for one plaintiff who could not work as a regular POSCO employee due to having passed the retirement age. For seven employees who handled cold-rolled product packaging, it reversed the lower court ruling in favor of POSCO and remanded to the Gwangju High Court. The court said, "It is difficult to conclude that POSCO exercised substantial direction and command over the (cold-rolled packaging employees), and the evidence is insufficient to find they were substantively incorporated into POSCO's business."
◇ Supreme Court parses worker-dispatch relationships by specific duties of partner-company employees
A person surnamed Gu and others, who worked at the Pohang and Gwangyang steelworks as employees of POSCO's partner companies, filed suit in 2017 seeking recognition as employees of POSCO. Their duties included vessel berthing, raw material unloading and transport, slab correction and coil polishing, roll maintenance, production, transport and processing of blended raw materials, plant operations, and cold-rolled product packaging.
The issue was whether a worker-dispatch relationship existed between POSCO and the in-house subcontracting employees. Under the Act on the Protection, Etc., of Dispatched Workers, if an employer uses a dispatched worker for more than two years, the employer must hire the worker directly.
The two cases were split at first instance, but on appeal the courts found that a worker-dispatch relationship existed in which the plaintiffs received direct instruction and command from POSCO. Grounds included that the partner companies' work standard manuals were almost identical to those provided by POSCO and that POSCO, through the MES (Manufacturing Execution System), effectively directed partner-company employees regarding work targets and locations.
The Supreme Court finalized its finding that a worker-dispatch relationship existed for 215 plaintiffs. The grounds were: ▲ If the vessel berthing and raw material unloading and transport duties of partner-company employees were not performed in line with POSCO's production plan and raw material supply plan, problems would arise across overall steel production, and POSCO issued work instructions from time to time; ▲ essential facilities of the roll maintenance partner company were owned by POSCO; ▲ managerial staff at the blended raw material production, transport and processing partner company reported production volumes and blending ratios to POSCO via KakaoTalk messages from time to time and received instructions. Accordingly, POSCO must hire them directly.
However, regarding employees of the cold-rolled product packaging partner company POSCO M-Tech, the court said the company "has performed packaging work since 1976 and, in 2004, filed for a patent, among other steps, and thus possesses independent experience and technology," adding, "a considerable portion of the steelworks' packaging facilities are owned by the partner company." The company is listed on the KOSDAQ market, and its sales exceed 100 billion won.
◇ About 50 who won in 2022 converted to regular positions… Metalworkers' union says there is discrimination in pay and promotion
All plaintiffs are members of the POSCO In-house Subcontractors Branch of the Metal Workers' Union under the Korean Confederation of Trade Unions (KCTU). The union has filed suits since 2011 seeking to end the illegal dispatch status and have workers hired as regular employees at POSCO.
Fifty-nine members from POSCO partner companies won final judgments in their favor at the Supreme Court in July 2022 in the first and second suits filed in 2011 and 2016. The current suits are the third and fourth, filed in 2017. The Metal Workers' Union has filed up to the 10th round of suits. More than 2,000 plaintiffs participated in suits seven through ten.
On the 8th, POSCO announced it would directly hire about 7,000 people, roughly half of all partner-company employees. However, the Metal Workers' Union objected, saying, "There was no agreement or consultation whatsoever with the POSCO In-house Subcontractors Branch, which is a party to the suits," and calling it a "so-called regular position" that applies half the pay after creating a completely different S job group from the existing regular production job group (E group).
According to the Metal Workers' Union, the roughly 50 former partner-company employees whose victories were finalized by the Supreme Court in 2022 became regular employees at POSCO but were placed into a separate O job group, different from the E group. The union said, "Pay is markedly lower, the raise rate is about half that of existing regular employees, and there is structural discrimination in pay and promotion."
The Metal Workers' Union held a press conference in front of the Supreme Court on the morning of the same day. Im Yong-seop, head of the POSCO In-house Subcontractors Gwangyang Branch, said, "POSCO must immediately stop the sleight-of-hand direct hiring and implement full direct employment in line with the intent of the Supreme Court ruling." The union plans to respond by supplementing additional materials for the seven POSCO M-Tech members who lost.