Administrative Litigation on Unfair Dismissal | The Supreme Court's Judgment on the Lawfulness of Retirement at the Age Limit

This was a case in administrative litigation on unfair dismissal in which the issue was whether the employment relationship was automatically terminated upon reaching the retirement age.

The Plaintiff entered into the employment contract at issue with the Intervenor joining the Defendant (hereinafter the "Intervenor"), a social welfare corporation, on June 7, 2017, and worked as the director of Center A.

The Intervenor's rules of employment, enacted on November 1, 2012, set the last day of the year in which an employee turns 55 as the retirement age. Pursuant to the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion, the Intervenor's retirement age became 60 as of January 1, 2017, and the Plaintiff continued to work for the Intervenor even after reaching the retirement age of 60.

On September 7, 2020, the Intervenor amended its rules of employment to set the retirement age at the day of reaching 64 years of age, with the effective date being September 8, 2020.

The Intervenor's regulations provide that the enactment or amendment of provisions relating to the operation of the corporation must go through a resolution of the board of directors.

The Intervenor's board of directors conducted deliberation and resolution to ratify the amended rules of employment on March 24, 2022, which was after the effective date of those rules (September 8, 2020).

On June 14, 2021, the Intervenor notified the Plaintiff that the employment relationship would terminate as of June 25, 2021, when the Plaintiff would reach the retirement age of 64, and on June 25, 2021, the Intervenor processed the Plaintiff's retirement at the age limit.

In this administrative litigation on unfair dismissal, the National Labor Relations Commission determined that the company's processing of the retirement at the age limit on the ground that the Plaintiff had passed the retirement age was justified.

The Supreme Court's determination on the administrative litigation on unfair dismissal differed.

The Supreme Court determined that it was erroneous to hold that the processing of the retirement at the age limit at issue could not be regarded as a dismissal on the ground that the amended rules of employment had been applied retroactively from September 8, 2020.

The Supreme Court stated that whether the employment relationship was automatically terminated upon reaching the retirement age must be determined based on the retirement age in effect at the time the question of automatic termination is disputed, and cannot be determined based on a retirement age applied retroactively.

In addition, although an extension of the retirement age by the Intervenor through an amendment of the rules of employment could also apply to the Plaintiff, at the time of the processing of the retirement at the age limit on June 25, 2021, the amended rules of employment were without effect because they had not obtained the deliberation and resolution of the board of directors. Therefore, based on that point in time, the Plaintiff's employment relationship could not be regarded as having been automatically terminated under the invalid retirement age of 64.

The Supreme Court stated that the lower court's determination that the employment relationship between the Plaintiff and the Intervenor was automatically terminated, solely on the ground that the amended rules of employment had been applied retroactively from September 8, 2020, and that the Plaintiff had reached the retirement age of 64 under the amended rules of employment on June 25, 2021, was rendered through a misapprehension of the legal principles, and it reversed and remanded the lower judgment.

The issue in this administrative litigation on unfair dismissal was that the amended rules of employment were invalid because they were without effect, having not obtained deliberation and resolution.

In an administrative litigation on unfair dismissal, it is important to carefully review the employment contract, the rules of employment, and other related agreements, and to analyze relevant precedents and labor laws in depth in order to establish legal grounds for one's arguments.

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