You Are Fired? Please check the Cause on the Notice!

In South Korea, an employer cannot freely fire an employee.

The Korean Labor Standards Act (LSA) requires a “Justifiable cause” for termination.

 Here are some key points:

1.   Justifiable Reason for Dismissal: The burden is on the employer to prove a “justifiable reason to terminate.” According to the Korean Supreme Court, the reason must be “directly attributable to the employee.” Stealing, missing an excessive number of days of work, and violating laws related to the job, have all been deemed sufficient to terminate.

2.   Managerial Reasons for Layoff: The LSA places the burden on the employer to prove that an “urgent managerial necessity exists” before an employee is laid off. The Korean Supreme Court has interpreted this to mean that a company should prove that without the layoff, the company in Korea would have extreme difficulty in maintaining operations.

3.   Notice of Termination: An employer must give 30 days’ advance notice of dismissal. Should the employer dismiss an employee without giving the requisite notice, it must pay the employee, in lieu, his or her wages for not less than 30 days.

4.   Severance Pay: Under the Act on the Guarantee of Workers’ Retirement Benefits, an employer may sign up to a retirement pension plan or may give an exiting employee severance pay.

Please note that these are general guidelines and specific circumstances may vary.

If you can't find any cause as listed above, just dial 1350.

For more details, please feel free to reach out at jz@taxjz.com or If you would like a consultation with an English-speaking Consultant/Accountant in Korea, please schedule a call at: Schedule a Call with Jz