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Freelancer in Name Only: Supreme Court Rules Two-Year Threshold Triggers Equal Pay Standards

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A producer who worked for a regional broadcaster for eleven years under successive “freelance” contracts has won a landmark ruling — the Supreme Court holding that once a freelancer converts to indefinite employment status under Korean labor law, they are entitled to the same pay conditions as regular employees doing comparable work, regardless of how they were originally hired. Here are the key points.

Issue

Where a worker labeled a freelancer is found to be a genuine employee and converts to indefinite employment status under the Act on the Protection of Fixed-Term and Part-Time Workers, must the employer apply the same pay conditions as those applicable to regular employees doing similar work — or can it continue paying the original freelance contract rate?

Facts

  • Kim Nam-heon worked as a producer (PD) at Chuncheon MBC from April 2011 to February 2022 — approximately eleven years — handling assistant directing, corner directing, filming and editing support, and broadcast finalization tasks.
  • His contracts were repeatedly labeled “freelance AD contracts,” with his final contract running from March 2021 to February 2022. In January 2022, the broadcaster informed him that his contract would expire at the end of February and would not be renewed.
  • Kim argued that despite the freelance label, he had in reality worked under the broadcaster’s direction and supervision throughout, making him a genuine employee — and that having worked continuously for more than two years, he had automatically converted to indefinite employment status under the Fixed-Term Workers Act, meaning he could not be dismissed simply because a contract term had ended.
  • He filed suit in 2022.

Lower Court Decisions

  • The trial court recognized Kim as a worker under the Labor Standards Act. The broadcaster set the programs to be produced, assigned the work through the main PD, and Kim had no freedom to choose his assignments. He had no other employer or income source for the entire eleven-year period. The court found him to be an economically dependent employee, not an independent contractor. It also found the dismissal notice — which stated only that the contract had expired, without specifying grounds — violated the Labor Standards Act’s written notification requirement, making the dismissal void. The broadcaster was ordered to pay 22 months of back wages totaling approximately ₩46.03 million.
  • The appellate court upheld the findings on employee status, indefinite employment conversion, and the invalidity of the dismissal. However, it declined to apply the broadcaster’s internal pay scale to Kim. Chuncheon MBC divided its indefinite employees into two categories: “general staff” hired through open recruitment under a seniority-based pay system, and “business staff” who entered through open recruitment or converted from fixed-term contracts under an annual salary system. Kim had gone through neither process, so the appellate court applied his original freelance weekly rate of ₩430,000 as the wage baseline, arriving at a total award of approximately ₩67.75 million including unused annual leave allowances.

Supreme Court Decision

  • The Supreme Court (Civil Division 3, presiding Justice Lee Suk-yeon) partially reversed the appellate decision on June 11, 2026, and remanded to Seoul High Court.
  • The court held that under the Fixed-Term Workers Act, a worker who converts to indefinite employment status is entitled to the same employment rules and working conditions — including pay — as other indefinite employees in the same workplace performing the same or similar work, unless a specific alternative arrangement has been made.
  • Kim converted to indefinite employment status in approximately 2014 after exceeding the two-year threshold. The broadcaster’s internal rules divided indefinite employees into general staff and business staff, but contained no separate provisions for workers who converted automatically under the Fixed-Term Workers Act. After the conversion, the broadcaster simply continued issuing freelance contracts and paying the original rate — a practice the Supreme Court found legally untenable.
  • Comparing the actual tasks performed by Kim with those of general staff and business staff in the same department, the court found there was no meaningful difference in the substance of the work. The appellate court should therefore have examined whether comparable regular employees existed and, if so, applied their pay conditions to Kim.
  • Denying Kim the benefit of the regular pay scale simply because he had not gone through the open recruitment process was a misapplication of the law governing working conditions for indefinite employees.

Key Takeaways

  • The “freelancer” label in a contract does not determine employment status. What matters is whether the worker was, in substance, subject to the employer’s direction and supervision — and whether they were economically dependent on a single employer.
  • Once a fixed-term worker automatically converts to indefinite status under the two-year rule, the employer cannot continue applying the original contract terms as if no conversion had occurred.
  • On conversion, the applicable pay conditions are those of existing indefinite employees doing comparable work — not the pre-conversion contract rate and not a specially reduced rate created for converted workers outside the normal pay structure.
  • The method of entry — open recruitment, direct hire, or automatic conversion — does not determine pay entitlement after conversion. The comparison is between the work actually performed, not the hiring pathway.

Why This Matters

This ruling has significant implications for broadcasters and other industries that rely heavily on long-term “freelance” arrangements. The Supreme Court has made clear that where the substance of the relationship is employment, and where the two-year threshold triggers automatic conversion to indefinite status, the economic consequences of that conversion cannot be neutralized by simply pointing to the original contract rate or the absence of a formal recruitment process. For practitioners advising media companies and other employers with large freelance workforces, this decision is a prompt to audit long-standing contractor arrangements — and to address the pay equity gap between labeled freelancers and formally employed staff doing the same work.

Article: https://www.lawtimes.co.kr/news/articleView.html?idxno=224321

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