The Seoul High Court has determined that drivers associated with the ride-hailing service TADA are to be considered employees under the Labor Standards Act. (Image courtesy of Yonhap)
SEOUL, Dec. 22 (Korea Bizwire) – The Seoul High Court has determined that drivers associated with the ride-hailing service TADA are to be considered employees under the Labor Standards Act. Consequently, terminating their contracts without just cause is deemed unfair dismissal, as per the ruling on December 21.
In a lawsuit against the National Labor Relations Commission (NLRC) regarding the revocation of the unfair dismissal remedy, filed by Socar (the parent company of TADA operator VCNC), the Seoul High Court overturned the lower court’s decision in favor of the plaintiff.
The court ruled in favor of the defendant, asserting that participants’ work within the TADA service was essentially determined within the framework created by the operator through the TADA app.
The court highlighted that participants received specific instructions and supervision through the app in most work-related matters, leading to the conclusion that they did not have a free choice in accepting work or determining working hours.
The court emphasized that participants should be considered workers under the Labor Standards Act, operating in a dependent relationship.
Socar, as the main entity in the TADA service business, was recognized as the actual employer of the participants, supplying freelance drivers and directing and supervising their work.
Regarding the notice of reduction in the number of employees, which constituted a dismissal, the court deemed the notice posted in the TADA drivers’ group chat room insufficient under the Labor Standards Act.
The case involved an individual referred to only as Mr. A, who, despite being a freelancer under a contract with a staffing agency supplying drivers to TADA, claimed to receive main work instructions from VCNC.
The initial dismissal of Mr. A’s case by the Seoul Regional Labor Relations Commission (RLRC) was overturned by the NLRC, which determined Mr. A’s worker status and partially recognized TADA as an employer.
Socar filed a lawsuit to revoke the NLRC’s decision, claiming that it was not the employer.
The Court of First Instance ruled in favor of Socar, rejecting the argument that Socar qualified as an “employer,” marking the first court ruling on the worker status of TADA drivers.
In a separate matter, former TADA executives Lee Jae-woong and Park Jae-wook were charged with violating the Passenger Vehicle Transportation Business Act but were acquitted by the Supreme Court.
The charges involved allegations of operating a passenger car transportation business without a license through the TADA app.
The court concluded that TADA engaged in renting cars by arranging drivers, permissible under the old Passenger Vehicle Act and the Enforcement Decree.
Kevin Lee (kevinlee@koreabizwire.com)
