The Supreme Court in Seocho-gu, Seoul. [Yonhap]
The Supreme Court in Seocho-gu, Seoul. [Yonhap]

The Supreme Court has overturned lower court rulings that recognized CJ Logistics as an employer of delivery workers at local distribution branches, sending the case back to the Seoul High Court. The court ruled that because the dispute predates the so-called Yellow Envelope Law — the revised Trade Union and Labor Relations Adjustment Act, which allows subcontracted workers to bargain with a primary contractor that holds substantive decision-making power — the older labor law standard must apply.

The Supreme Court's Special Third Division, presided over by Justice Lee Heung-gu, on Thursday overturned the lower court's ruling against CJ Logistics in the company's appeal of a National Labor Relations Commission decision and remanded the case to the Seoul High Court.

The court held that while cases governed by the Yellow Envelope Law require an assessment of whether a party holds substantive and specific control over workers' conditions, cases still subject to the old Trade Union Act must instead determine employer status by examining whether an explicit or implied employment contract exists.

"Since no explicit or implied employment contract can be recognized between CJ Logistics and the delivery workers at local distribution branches, it is difficult to regard CJ Logistics as an employer bearing collective bargaining obligations under the old Trade Union Act with respect to those workers," the court said.

The dispute traces back to May 2020, when the Korean Parcel Delivery Workers' Union, whose members include delivery workers at local distribution branches, demanded collective bargaining with CJ Logistics on six issues: shortening the time for receiving delivery products at sub-terminals, shortening the time for handing over collected products at sub-terminals, improving the working environment at sub-terminals, introducing a five-day workweek, raising and improving zone-based commission rates, and improving liability allocation for accidents.

CJ Logistics refused, arguing it did not qualify as an employer under the Trade Union Act. The union filed an unfair labor practice complaint with the Seoul Regional Labor Relations Commission, which dismissed it in November 2020, finding that CJ Logistics did not meet the definition of an employer under the act.

The union then sought review from the National Labor Relations Commission, which in June 2021 reversed that finding, ruling that CJ Logistics held substantive and specific control over all six bargaining issues and was therefore obligated to engage in collective bargaining. CJ Logistics filed a lawsuit in July of that year seeking to annul the commission's ruling.

The central question before the courts was whether CJ Logistics qualified as an employer under the Trade Union Act with respect to the branch delivery workers. At the time, branch operators had subdivided their designated delivery zones and entered into consignment contracts with individual delivery workers, re-delegating the collection and delivery work within each zone to those workers.

CJ Logistics argued that an employer under the Trade Union Act is one who has entered into an explicit or implied employment contract with workers — directing and supervising their labor in exchange for wages — and that because it had no such contract with the branch delivery workers, it could not be considered their employer.

The first instance court rejected that argument in January 2023, finding that CJ Logistics held a position of substantive and specific control over the working conditions at issue and therefore qualified as an employer under the Trade Union Act.

The first instance court said the definition of employer under the Trade Union Act is organically linked to the broader protection of the three fundamental labor rights, and that interpreting the definition to include parties without a direct employment contract does not conflict with the single bargaining channel procedure.

The Seoul High Court also dismissed CJ Logistics' appeal in January 2024, finding that the definition of employer reasonably extends to parties who hold a position of substantive and specific control over working conditions to a degree that they bear some of the authority and responsibility of an employer.

Thursday's ruling is consistent with a May decision by the Supreme Court's en banc panel, which held that collective bargaining disputes filed before the Yellow Envelope Law took effect must be decided under the prior legal standard. The Yellow Envelope Law, in force since March, allows subcontracted workers to bargain with a primary contractor that holds substantive decision-making power over their working conditions.

In that May ruling, the en banc panel upheld a lower court decision against the in-house subcontractors' chapter of the Korean Metal Workers' Union's Hyundai Heavy Industries branch in its collective bargaining suit against HD Hyundai Heavy, finding that because the suit was filed before the Yellow Envelope Law took effect, the prior legal standard remained applicable.


bell@heraldcorp.com