Facts
Under the Tada service, car rental company Socar rented its vehicles to users through an app run by its wholly owned subsidiary VCNC, while contractors supplied drivers under 'freelance driver' agreements. In July 2019 a contractor announced job cuts in the drivers' group chat and posted a list of drivers to be dispatched. A driver left off the list filed an unfair dismissal claim on 7 October 2019 against the app operator, later adding Socar. The Seoul regional labour commission rejected it, finding he was not an employee; the National Labor Relations Commission found the driver to be an employee of Socar and the dismissal unfair. The Seoul Administrative Court quashed that ruling and the Seoul High Court reversed.
Question
The core question was whether a driver with no direct contract with Socar, supplied by a contractor and receiving work through an app, was an employee under the Labor Standards Act, and if so who the employer was. On the facts found, drivers chose the days and times they applied for, could decline calls and could hold other jobs. The court also had to say how the traditional tests of subordination apply where an online platform allocates work and monitors performance. On procedure, it was disputed whether adding Socar as respondent after the three-month filing period had expired was time-barred.
Decision
On 25 July 2024 the Supreme Court's Third Division unanimously dismissed the appeal. For platform workers, courts must take account of a business model in which parties are connected through a platform, reducing the need for direct contracts, and of labour management in which the platform's algorithm or several actors decide how work is allocated and performed. Here the app automatically logged clock-ins, call acceptance, routes and breaks, feeding monthly attendance reports. The app assigned calls, drivers could not pick passengers, and refusals counted towards sanctions and bonus levels. Finding that the platform chose workers, allocated jobs and controlled methods, the court held the driver an employee and Socar the employer. Adding Socar was timely.
Why it matters
A law firm column in Hankyung (March 2026) described it as the first Supreme Court ruling to recognise a platform worker as an employee outright. The court kept the existing subordination factors rather than creating a new test, but expressly took algorithmic work allocation and app-based performance monitoring into account when applying them. It also said that the absence of a fixed wage or income tax withholding carries little weight, because it stems from the nature of platform work. According to press coverage, industry groups voiced concern that the ruling would prompt further claims by platform workers.
Related stages
Lower courts: Seoul Administrative Court, 8 July 2022, 2020구합70229 (for Socar); Seoul High Court, 21 December 2023, 2022누56601 (for the National Labor Relations Commission). The Supreme Court judgment anonymises the companies; the names Socar and VCNC come from press reports.