Disciplinary Action / Dismissal

Article 23 of the Labor Standards Act provides that an employee shall not be dismissed without justifiable grounds.

In particular, in the case of disciplinary action or dismissal, it is valid only if grounds relating to the employee's conduct exist objectively and specifically, the level of discipline is not markedly unfair under generally accepted social norms, and the dismissal procedure complies with the procedures set out in the Labor Standards Act and the rules of employment or collective agreement.

The Supreme Court holds that, even where grounds for discipline exist, if the person with disciplinary authority imposes excessive discipline that cannot be tolerated under generally accepted social norms, this is regarded as an "abuse of disciplinary authority," and the disciplinary action is deemed void.

This is intended to prevent the abuse of personnel authority and to protect the rights and interests of employees, so a company must pay particular attention when assessing the appropriateness of the level of discipline.

Because disciplinary action and dismissal have a significant effect on an employee's rights and interests, the following requirements must be met.

▶Written Notice of the Grounds for Dismissal : Under Article 27 of the Labor Standards Act, the grounds for and timing of the dismissal must be given in writing, and if this is omitted, the dismissal has no effect.

▶Advance Notice of Dismissal : As a rule, advance notice of dismissal 30 days beforehand or payment of 30 days' ordinary wages is mandatory.

Compliance with the procedures in the collective agreement and rules of employment: If internal rules, such as convening a disciplinary committee, providing an opportunity to state one's opinion, and conducting an investigation, are violated, a judgment that the dismissal is void may be rendered on the ground of a procedural defect.

Except in exceptional cases where a procedural violation is cured, the Supreme Court has denied the effect of dismissals, so a company is likely to bear risk from even formal procedures, and thorough management is therefore necessary.

According to Supreme Court precedent, even if grounds for discipline exist against an employee, a dismissal that markedly loses validity under generally accepted social norms is void as an abuse of the disciplinary authority.

For example, if measures such as a wage reduction or suspension could serve as an alternative to dismissal when considering a minor infraction, long-term service, contributions, and the circumstances of the conduct, the dismissal becomes unlawful.

In Seoul High Court Decision 2017Na2086307, an employee was dismissed for causing damage to the company through a simple mistake, and the court held the dismissal void after considering that there was no intent or repetition and that the employee had worked diligently.

An employee who has been unfairly dismissed may file an application for remedy with the Labor Relations Commission, and the Commission may review the legitimacy of the dismissal and issue a remedy order.

In addition, if a judgment declaring the dismissal void becomes final, civil liability for damages may arise, requiring payment of an amount equivalent to the wages for the dismissal period.

Dismissing an employee solely on the ground that the employee reported the employer's violation of statutes to the relevant authorities or to the company is prohibited under the Labor Standards Act and the Occupational Safety and Health Act.

As a measure to maintain fairness in the workplace and lawful management through the protection of whistleblowers, a dismissal that violates this is treated as void.

Dismissal is also restricted where an employee is on leave for medical treatment of a work-related injury or illness, or is on pre- or post-natal leave.

Under the Labor Standards Act, dismissal is in principle prohibited during such leave period and for 30 days after it ends, and is permitted only on an exceptional basis when special grounds exist, such as a serious managerial crisis at the company.

Discriminatory dismissal on the ground of an employee's sex is expressly prohibited under the Equal Employment Opportunity Act.

Dismissing an employee or imposing personnel disadvantages on the ground that the employee claimed to be a victim of sexual harassment or raised the issue is also subject to prohibition.

If such a dismissal takes place, a remedy order for unfair dismissal and liability for damages may both be imposed.

Disadvantageous dismissal of an employee who takes parental leave or maternity leave is also prohibited by law.

The Equal Employment Opportunity Act strictly restricts dismissing an employee solely on the ground that the employee applied for or used parental leave or maternity leave, and an employer who violates this is subject to an administrative fine.

Dismissing an employee on the ground of exercising rights under the Trade Union and Labor Relations Adjustment Act, such as joining and engaging in union activities or reporting an unfair labor practice, is also a clear violation of the law.

This is directly connected to the constitutional protection of the right to organize, and not only dismissal but also personnel disadvantages are deemed unfair labor practices that may be subject to strong legal sanctions.

Korean law prohibits dismissing a fixed-term worker, part-time worker, or dispatched worker on the ground that the worker demanded correction of discriminatory treatment from the employer or filed a petition with the Ministry of Employment and Labor.

If this is violated, the dismissal becomes void, and the employer may be subject to an administrative fine and civil liability.

The Occupational Safety and Health Act clearly prohibits dismissing an employee on the ground that the employee stopped work when a serious risk of accident arose in the workplace or reported a statutory violation.

This is a requirement that must be observed in order to secure safety for the prevention of industrial accidents.

Dismissing an employee with a disability on the ground of the disability is strictly prohibited under the Anti-Discrimination Against and Remedies for Persons with Disabilities Act.

Dismissing an employee or imposing personnel disadvantages on the ground of disability is regarded as discrimination, and as an unlawful act it may give rise to civil and criminal liability.

Dismissing an employee on the ground of the employee's age is also prohibited in principle.

In particular, the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion clearly prohibits dismissal on the ground of age, as well as imposing disadvantages on the ground of a petition or submission of materials regarding age discrimination, so special care is required when taking personnel measures against older workers

The difference between dismissal and recommended resignation can be confusing, so the main differences are summarized below.

If an employee found it difficult to refuse the employer's demand and wrote and submitted a resignation letter under coercion, this may be regarded as a dismissal, and an application for remedy against unfair dismissal is possible.

The Supreme Court has likewise held this point repeatedly (Supreme Court, July 12, 1991, 90Da11554; Supreme Court, April 22, 2003, 2002Da65066), and a recommended resignation is valid only if it results from the employee's voluntary choice.

In the case of an underperforming employee, the employer cannot dismiss the employee at its discretion, and an ordinary dismissal is possible only when, after going through procedures such as objective personnel evaluation over a considerable period and the provision of an opportunity to improve performance, maintaining the employment contract has become difficult under generally accepted social norms.

However, although it is also possible to induce a recommended resignation by agreement with the employee, procedural care is required so that there is no room for coercion (Supreme Court, 2018Da253680, February 25, 2021).

▶Tips for Preventing Coercion in Recommended Resignation

In a recommended resignation, materials capable of proving that the process was carried out according to the employee's free will must always be retained in order to prevent later legal disputes.

Corporate human resources officers and management should be familiar with the above so as to clearly recognize the legal differences between dismissal and recommended resignation and the practical points to note, and it is important to ensure lawful procedure and legitimacy when terminating an employment relationship.

If necessary, reviewing the procedures and supporting evidence in advance through labor law advisory is also a sound response strategy.

When a company considers discipline or dismissal in the course of exercising its personnel authority, it must proactively review whether any grounds prohibited under the relevant statutes exist.

This is because, if a prohibited ground applies, the dismissal is likely to be judged void, and various legal risks may accompany it, such as a remedy order for unfair dismissal, a claim for damages, criminal punishment, and the imposition of an administrative fine.

Accordingly, the human resources and labor department and management should be sure to confirm the following matters before deciding on a dismissal.

■The legitimacy of the grounds for dismissal

■Whether a prohibited ground unrelated to the grounds for dismissal applies

■The specific provisions of the relevant statutes and the legal liability for a violation

■The possibility of an application for remedy against unfair dismissal and a response strategy

Through this, legal risks related to dismissal can be minimized, and fair and lawful personnel management can be achieved.

For a company's sustainable management, please keep in mind that reviewing legal risks is also necessary in the course of exercising personnel authority.