Court Rules Delivery Rider Is an Employee: A First in Labor Law Protection

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A court has issued its first ruling recognizing a delivery rider who receives work through a platform as an employee. The court determined that the rider was effectively subordinate to the platform company. If this ruling is upheld, it is expected to have a significant impact on the entire platform labor market.

Report by Jeon Hyeong-u.

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A delivery rider, referred to as A, began working under a contract with a delivery agency in May 2021.

Seven months later, after receiving a notice of contract termination from the company, A filed a lawsuit claiming that the dismissal was invalid due to a lack of cause and the absence of written notification, and demanded payment of wages for the period of dismissal.

The first trial court dismissed the lawsuit, viewing A as a self-employed individual rather than an employee under the Labor Standards Act, citing that A could autonomously decide how to carry out deliveries.

However, the second trial court recognized the dismissal as unfair, classifying A as an employee on the grounds that the rider provided labor in a subordinate relationship under the company's direction and supervision.

The Seoul High Court pointed out that the rider could only perform delivery tasks through the platform company's app, and that both the criteria for calculating compensation and the payment methods were determined according to company standards.

The court also determined that significant direction and supervision were involved, such as dispatching being carried out according to company policy through app algorithms or instructions from management staff.

[Beom Yu-kyung, Attorney for the delivery rider: The court seemed to place great importance on the fact that the company operating the platform restricted certain choices and had rules that were applied collectively, much like employment regulations. It also considered the aspect of compulsion to be very important.]

The Rider Union branch of the Korean Confederation of Trade Unions stated, "This is the first ruling to recognize the employee status of delivery workers," and demanded that the Minimum Wage Commission reflect this ruling to reopen discussions on minimum compensation per delivery.

[Delivery Rider: The delivery fee is quite low. Even if I work quickly, I can only do four or five deliveries an hour. It barely amounts to the minimum hourly wage.]

If the Supreme Court upholds the intent of this ruling, it is highly likely that a significant number of delivery riders will come under the protection of labor laws, such as minimum wage and restrictions on dismissal, and changes to platform business models are also expected.

However, some in the industry point out that this ruling is an individual case involving a small to medium-sized delivery agency and that it would be difficult to apply it to other companies or platforms.

(Video Editing: Park Hyun-chul, Video Reporting: Lee Sang-min)
※ Please note: This article was translated by AI and may contain errors.