Contributed By Yoon & Yang LLC (Seoul - HQ)
As noted above, employers must, pursuant to Article 26 of the Labor Standards Act, give an employee a prior notice of at least 30 days if the employer intends to dismiss such employee. This notice requirement applies also to dismissals caused by managerial reasons. In addition, much like procedures for taking disciplinary actions, employers are required to provide a prior notice (usually one week before the meeting) that an HR committee meeting will be held. Other than the foregoing, the Labor Standards Act does not provide for a mandatory notice period. However, if the employer provides for a separate notice period in its rules of employment that are not required by the law, then such procedures must be complied with.
If an employer fails to give the requisite prior notice of 30 days prior to dismissing an employee, then the employer must pay the employee an additional sum of money equivalent to at least 30 days’ worth of the employee’s ordinary wages pursuant to Article 26 of the Labor Standards Act.
Also, aside from the foregoing requirements to provide a prior notice and to pay additional allowances for failing to provide a prior notice, there are additional severance pay-related requirements under the Act on the Guarantee of Workers' Retirement Benefits (the “Retirement Benefits Act”). The Retirement Benefits Act requires employers to provide severance payments or retirement pensions to resigning employees who have been employed for at least one year. To provide the foregoing payments or pensions, an employer is required to operate a retirement-benefit scheme in accordance with the Retirement Benefits Act. In particular, if an employee dies or retires, Article 36 of the Labor Standards Act requires an employer to pay the wages, compensations and other money or valuables to the employee within 14 days after the death or retirement of the employee. This 14-day payment period may be extended by mutual agreement between the parties concerned if there are special circumstances.
With regard to dismissals of employees, the Labor Standards Act only requires the employer to provide a prior notice of 30 days to the relevant employee (Article 26) and to notify the detailed reason for, and timing of, the dismissal in writing (Article 27). As such, no separate procedures such as obtaining external advice or authorisation need to be taken. However, if the employer provides for additional procedures for employee resignations (including dismissals etc) through collective agreements, rules of employment, employment contracts or other relevant agreements, then the employer must comply with such procedures.