Court Rules "Tada Drivers Are Workers... Suspension Allowances Must Be Paid for Dismissal Period"

Class Action by 24 "Tada Basic" Drivers
Emergency Committee: "Labor Law Must Apply to Digital Platforms as Well"

The court has ruled that drivers for the ride-hailing service "Tada" (Tada drivers) are employees under the Labor Standards Act and must be paid leave allowances for the period of unfair dismissal.

According to a report by Yonhap News on the 19th, the 15th Civil Division of the Seoul Eastern District Court (Presiding Judge Cho Yongrae) ruled partly in favor of the 24 plaintiffs, including Mr. A, in their lawsuit against Socar Co., Ltd. seeking confirmation of employee status and related claims.

Mr. A and the others had worked as freelance drivers in the "Tada Basic Service," a vehicle rental service including driver dispatch that Socar operated through its subsidiary VCNC. After an amendment to the Passenger Transport Service Act passed the National Assembly in March 2020, Socar suspended the Tada Basic Service in April 2020 and terminated its contracts with Mr. A and the other drivers. In response, Mr. A and the others filed a lawsuit, asserting that they were in substance employees of Socar and seeking confirmation of their status as employees and unpaid wages for the period during which the service was suspended.

The court found that the plaintiffs were in an employee relationship with Socar and held that the company must pay leave allowances for the period during which they were unable to work due to unfair dismissal. The court determined that Socar’s suspension of the Tada Basic Service could not be regarded as the abolition of its entire business, and therefore the dismissals of the drivers at that time were unfair and invalid. Accordingly, by applying the Labor Standards Act, the court held that Socar is obligated to pay leave allowances equivalent to at least 70% of the average wage for the period during which the drivers were unable to provide labor due to reasons attributable to Socar. Of the plaintiffs, the court fully accepted the claimed amounts of two individuals and partially accepted the claimed amounts of the remaining 22.

The Emergency Response Committee of Tada Drivers and Rider Union issued a statement the same day, saying, "This ruling has sounded a warning against the behavior of platform companies that take profits while shirking responsibility," and, "It clearly marks a turning point affirming that the principles of labor law must also apply in the digital platform environment."