Advisory Case on Distinguishing Subcontracting from Worker Dispatch and Minimizing Potential Illegality in Operations

1. The Client's Situation

The client wished to deploy externally subcontracted workers in the same space and time slots as its full-time employees. However, since there was a risk that deploying subcontracted workers into the company's ongoing and essential operations, or mixing them with full-time employees, could be judged as illegal dispatch, a review of the legal risks was necessary.

First, Your Legal Team explained that the key criterion distinguishing subcontracting from dispatch is whether the prime contractor exercises direction and command, and presented operational measures for maintaining the structure of a subcontracting agreement. Second, in line with the various factors considered by the courts, we advised on detailed operational precautions such as establishing a chain of instruction through the subcontractor's own managers, separating the work and space of full-time employees and subcontracted workers, and ensuring the cooperating company's independent employment and safety-management responsibilities. Third, we emphasized that even when concluding the contract, it is necessary to clearly stipulate the scope of work, authority, and method of calculating compensation centered on "the completion of work," and to take measures to secure the subcontractor's expertise and autonomy.

The client was able to reduce unnecessary illegal-dispatch risk in the course of operating its subcontracting agreement and to reasonably reorganize its on-site management system and contract terms. Through this, the client was able to secure legal defensibility in the event of future labor inspections or disputes, and to establish a practical operational system that maintains the independence of the subcontracting structure.