On April 16, 2026, South Korea’s Supreme Court delivered a landmark ruling that could fundamentally reshape labor relations at one of the nation’s industrial giants, POSCO. The court’s decision, the latest in a legal saga stretching back over a decade, centered on whether hundreds of subcontracted workers at POSCO’s sprawling steel plants were, in reality, under the direct control of the company and thus entitled to full employment rights. The outcome: a major win for workers, a new chapter for corporate Korea, and a moment that’s left both employees and management scrambling to adapt.
The roots of the dispute reach back to 2011, when the first of a series of lawsuits was filed by POSCO’s subcontracted workers. Over 2,000 workers have since joined a total of ten lawsuits, all revolving around a single, burning question: Were these workers truly employed by the subcontracting firms, or were they effectively under POSCO’s command, making their dispatch illegal under Korean labor law?
According to News1, the latest Supreme Court verdict addressed the third and fourth rounds of these lawsuits. The third case involved eight workers who handled cold-rolled product packaging. Their journey through the courts was anything but straightforward. The first trial sided with POSCO, arguing that the subcontracting firms managed their own workforces and that the workers weren’t under POSCO’s direct authority. But the second trial upended this view, recognizing the arrangement as an illegal dispatch and ordering POSCO to directly employ the affected workers. The judges pointed to the close integration of the workers’ tasks with POSCO’s production process and noted that the company exercised real decision-making power over their daily work.
The fourth lawsuit, involving 215 workers engaged in core steel plant operations like raw material handling, transport, and equipment maintenance, saw both the first and second trials favor the workers. As the court put it, "It is reasonable to see that the plaintiffs performed their work according to POSCO’s technical standards and under its instructions," and that POSCO "exercised indirect command or binding instructions through this arrangement." The court also found little evidence that the subcontractors had truly independent business organizations or facilities, further strengthening the workers’ case. In short, the court recognized POSCO’s responsibility as the real employer.
These rulings are the latest in a string of victories for POSCO’s subcontracted workers. The very first lawsuit, finally resolved in 2022, ended with a Supreme Court win for labor. Subsequent cases—covering hundreds more workers—have generally followed suit, with the courts increasingly siding with employees who claim they were, for all intents and purposes, part of POSCO’s workforce. Meanwhile, the eighth through tenth lawsuits are still winding their way through the lower courts, and the total number of participants in these legal battles now exceeds 2,000.
While the legal process has been grinding on, the mood on the ground at POSCO’s steel plants in Pohang and Gwangyang has been anything but calm. Rumors and anxieties have swirled among workers, particularly as talk of direct employment gained traction. On April 15, 2026, the Cooperative Council for POSCO’s Pohang and Gwangyang Steelworks—a body representing both management and subcontractor staff—issued a rare public statement to address the mounting speculation. According to Straight News Daegu-Gyeongbuk, the Council denounced what it called "unverified falsehoods," asserting that such rumors were "causing anxiety in the field."
One major flashpoint involved the so-called ‘S job category,’ a new employment group for workers transitioning from subcontractors to direct POSCO employment. Some union voices had claimed that this group would be treated as a lower-tier or temporary workforce, or that it would be first in line for layoffs if restructuring occurred. The Council shot down these rumors, stating unequivocally, "The S job category is not a special or separate employment status, but is identical to POSCO’s existing E/P/R job categories." The Council also dismissed talk of a required "non-litigation agreement"—an alleged condition that workers must promise not to sue POSCO in exchange for direct employment. "POSCO has already made it clear that a non-litigation agreement is not a prerequisite for direct employment," the Council emphasized.
Perhaps most critically, the Council addressed workers’ deepest concern: Would their years of service, job grade, and benefits be preserved if they moved from subcontractor to POSCO payrolls? The answer, at least on paper, is yes. The Council pledged, "POSCO has decided to fully recognize the period of service and job grade accumulated during employment with subcontractors, and to guarantee the same welfare benefits." This move, the Council said, is aimed at ensuring "practical employment stability" and preventing any break in treatment or discrimination against newly hired workers.
Behind the scenes, the Council has been working to bridge the gap between management and workers, advocating for rights and pushing for improvements in welfare. Initiatives like a joint employee welfare fund, educational support, childcare policies, and increased welfare points have all been cited as evidence of a broader commitment to labor harmony. The Council’s co-chair summed up the approach: "We will do everything possible to ensure that the long-prepared direct employment plan proceeds smoothly. We deeply regret the spread of false information that stirs anxiety on the ground and will maintain a responsible attitude so employees can make informed decisions."
Still, the scale and significance of POSCO’s move toward directly employing its subcontracted workforce is hard to overstate. As Straight News Daegu-Gyeongbuk noted, such a sweeping employment restructuring is rare in Korean industry. Transitions of this magnitude almost always generate friction and confusion, especially when information is scarce or unevenly distributed. The Council’s efforts to directly confront key issues—such as job security, employment status, and the terms of direct employment—have been welcomed by many as a step toward clarity and trust.
Yet, as with any grand promise, the proof will be in the execution. The real test, observers say, will be whether commitments to recognize prior service and maintain benefits are faithfully reflected in the new employment contracts. Transparent communication and detailed follow-through—by both POSCO management and the Council—will be crucial in dispelling mistrust and ensuring a smooth transition for workers who have waited years for this moment.
On the same day as the POSCO ruling, the Supreme Court also decided a separate wage case involving former and current workers of the Seoul Facilities Management Corporation. At issue was whether self-evaluation bonuses should be counted as part of ordinary wages, affecting overtime and severance pay. Both lower courts had dismissed the workers’ claims, and the Supreme Court upheld those decisions. The court found that the bonuses lacked the "fixed nature" required for classification as ordinary wages, since they were awarded for the previous year’s performance and not guaranteed as a minimum payment for work performed.
For POSCO’s workers, however, the Supreme Court’s latest judgment is a decisive step. After years of legal wrangling, the path toward direct employment—and with it, greater job security and recognition—now seems clearer than ever. The coming months will reveal whether this hard-won victory translates into lasting change on the shop floor.