Legal status of migrant workers

The legal status of migrant workers (외국인근로자의 법적 지위/外國人勤勞者 法的地位) refers to the situation how migrant workers are treated as a party of an employment contract, how much they are paid in comparison with local workers, and what kind of rights and interest they are entitled to as a laborer in terms of the Korean labor law.

There is a leading case which answers all of the above questions: Supreme Court Decision 2006Da53627 delivered on December 7, 2006.

Key words
migrant workers, industrial trainees, employment contract, jurisdiction, retirement allowance, minimum wage

Facts
Chinese workers made a contract of technology training abroad with the Chinese company established by the Korean company and entered Korea as industrial trainees.

They worked at a Korean manufacturing company. However the employment agreement ruled out the jurisdiction over an international trial by a Korean court at the time of entering into a labor contract. So the employer argued that the provisions of the Labor Standards Act on retirement allowance and of the Minimum Wages Act on the minimum wage would not apply to foreign workers.

With the help of Korean social workers, the Chinese workers claimed retirement allowance on the basis of minimum wage applicable to local laborers.

Summary of Judgment
Where parties of an employment contract had agreed to rule out the jurisdiction over an international trial by a Korean court before a conflict occurred, since such agreement violates Article 28 (5) of the Private International Act (국제사법), it has no effect.

The provisions of the Labor Standards Act on retirement allowance and of the Minimum Wages Act on the minimum wage also apply to the foreign workers as with the Korean workers.

The case holding that where the Chinese workers entered into a contract of technology training abroad with the Chinese company established by the Korean company and entered Korea as industrial trainees to provide labor to the Korean company, the agreement in the contract does not just cover the industrial technology training but also covers the provision of labor for at least eight hours a day and the receipt of wages for the labor.

When the Chinese workers did not receive any industrial training but provided labor under the specific and individual commands and supervision by the employer in the Korean company for about one year and six months along with other Korean workers, and often have worked overtime and at night and have received payment for such labor, they should be considered as the workers stipulated in the Labor Standards Act (근로기준법) and the Minimum Wages Act (최저임금법).

Disposition
The appeal is dismissed. The cost of the appeal shall be borne by the defendant.

Reasoning
1. According to Article 2 (1) of the Private International Act, a court in the Republic of Korea has the jurisdiction over an international trial in the case where the parties or the issue has substantial relation to the Republic of Korea, and according to Article 28 (5) of the same Act, an agreement concerning the jurisdiction over an international trial is permitted either in the case where a conflict has already occurred (Item 1) or in the case where an employee is allowed to bring a lawsuit to a court in addition to the governing court in accordance with Article 28 (Item 2). So, even if parties of an employment agreement had agreed to rule out the jurisdiction over an international trial by a court in the Republic of Korea before a conflict occurred, such agreement violates Article 28 (5) of the Private International Act, and it does not have any effect.

The measure taken by the court below, with the same purport, to exclude the plea by the defendant that the suit in this case is illegitimate because it had been brought in violation of the agreement by the parties concerning the trial jurisdiction is just, and made no error in matter of law because it did not misunderstand the legal reasoning concerning trial jurisdiction.

2. The court below, after compiling the selected evidence, found that the plaintiffs entrusted their legal representatives with the right to represent them for the lawsuit in this case and the appeal, and according to the record, such finding of fact by the court below is reasonable, and made no error in matter of law because it did not misunderstand the facts arising from insufficient deliberation as argued in the grounds for appeal.

3. In judging whether a worker falls under the category in accordance with the Labor Standards Act, regardless of the fact that the agreement is an employment contract under the Civil Act or a subcontractor agreement, it should be determined based upon whether the worker provided the employer with labor for the purpose of earning wages, and in determining the existence of a subordinate relationship, the totality of circumstances must be taken into account including the following items; whether the work was given by the employer, whether the worker was regulated by the employment rule or work regulations, whether the worker was receiving specific and individual commands and supervision by the employer in the work process, whether the employer designates work hours and places, whether work hours and places binds the worker, whether the work can be replaced by the third party hired by the worker himself, who owns the supplies, raw materials and work tools, whether the base payment and fixed payment are determined, whether the labor income tax is withheld, whether the work provision relationship continues, and whether the status of a worker is recognized by law such as the law concerning the social security system and what the social and economic conditions are for both parties (refer to Supreme Court Decision 2000Do4901 delivered on April 13, 2001).

So, even though a foreigner who has been issued with an industrial technology training visa signed an agreement with a Korean company which provides foreigner with the industrial technology training, if the agreement does not just cover the industrial technology training but also covers the provision of labor, payment for the labor and even payment for overtime work in accordance with the Labor Standard Act and if such foreigner has provided labor for the company while receiving commands and supervision and payment for the labor, such foreigner is deemed to be the worker as stipulated in Article 14 of the Labor Standards Act (refer to Supreme Court Decision 2005Da50034 delivered on November 10, 2005, 97Nu10352 delivered on October 10, 1997, et al.), and in accordance with Article 2 of the Minimum Wages Act, the worker as stipulated in Article 14 of the Labor Standards Act is categorized as the worker under the Minimum Wages Act, so foreign workers as above are subject to the provisions of the Labor Standard Act on retirement allowance or minimum wages, Article 6 (Effect of Minimum Wage) of the Minimum Wages Act
 * (1) The employer shall pay the workers who are covered by the minimum wage, at least the minimum wage amount.
 * (2) No employer may lower the previous wage level on the ground of the minimum wage determined under this Act.
 * (3) Where a labor contract between an employer and a worker covered by the minimum wage provides for a wage that is less than the minimum wage amount, the relevant stipulation concerning the wage shall be null and void and the invalidated part shall be considered to be stipulated to pay the same wage as the minimum wage amount as determined under this Act.
 * (4) The wage falling under any of the following subparagraphs shall not be included in the wages referred to in paragraphs (1) and (3):
 * 1. Wages other than those paid regularly once or more times each month, which are determined by the Minister of Labor;
 * 2. Wages other than those paid for the prescribed working hours or prescribed working days, which are determined by the Minister of Labor; and
 * 3. Other wages which are deemed as inappropriate to be included in the minimum wage amount, which are determined separately by the Ministry of Labor.
 * (5) The provisions of paragraphs (1) and (3) shall not oblige an employer to pay wages for the hours or days which a worker has not worked due to the following reasons:
 * 1. Where a worker has not worked the prescribed working hours or prescribed working days for his own reason; and
 * 2. Where an employer has not let a worker work the prescribed working hours or prescribed working days for a justifiable reason.
 * (6) In case where anyone runs the business after being subcontracted not less than twice, when the subcontractor pays his workers the wage that falls short of the minimum wage on the grounds of the responsibility of the relevant contractor, the relevant contractor and the relevant subcontractor shall jointly assume the responsibility therefrom. 
 * (7) The scope of the grounds of the responsibility of the relevant contractor referred to in paragraph (6) shall be as follows: 
 * 1. The act of unilaterally determining the subcontract payment that falls short of the minimum wage based on the unit payment of personnel spending by the relevant contractor without reaching an agreement thereon with the relevant subcontractor; and
 * 2. The act of lowering the unit payment of personnel spending to the amount that falls short of the minimum wage by the relevant contractor during the subcontract contract term.
 * [This Article wholly amended by Act No. 7379 of Jan. 27, 2005] as with Korean workers.

The court below, after compiling the selected evidence, found that the plaintiffs signed an agreement with D Company, which is a Chinese office of the defendant company (hereinafter referred to as the "company not a party in this case") and entered Korea as industrial trainees of a corporation which invests overseas, that the company, which is not a party in this case, is a corporation that the defendant company fully invested in the capital, that the agreement does not just cover the industrial technology training but also covers the provision of labor for at least eight hours a day and the receipt of wages for the labor, and that the plaintiffs did not receive any technological training but provided labor receiving specific and individual commands and supervision by the employer in the Changwon factory of the defendant company for about one year and six months along with other Korean workers often working overtime and at night with compensation for such labor.

The court below held that the plaintiffs should be considered as the workers stipulated in Article 14 of the Labor Standards Act and in the Minimum Wages Act, so the defendant has the obligation to pay the plaintiffs the amount after deducting the received amount from the minimum wages according to the number of days of work and the retirement allowance for the thirty days of the average wages for the one year of continued labor. According to the above legal reasoning and the record, the holding of the court below is just and made no error in matter of law because it did not misunderstand the facts by violating the rule of evidence as argued in the grounds for appeal.

4. According to the content of the employment contract between the plaintiffs and the defendant and the content of work, the plaintiffs are not deemed to be the “trainees” stipulated in Article 7 (2) of the former Minimum Wages Act (before it was amended by Act No. 7563 of May 31, 2005 and enacted on September 1, 2005), so the argument in the grounds for appeal on this point cannot be accepted.

5. Therefore, the appeal is dismissed, and all costs of this shall be borne by the losing party, and this decision is delivered with the assent of all participating Justices.