Contributed By Yoon & Yang LLC (Seoul - HQ)
Class actions in Korea are different from class actions in common law jurisdictions. In Korea, class actions take the form of a “multi-party litigation” in accordance with the Civil Procedures Act where multiple plaintiffs file a lawsuit as a single “group”. To the contrary, class actions in common law jurisdictions are initiated by a few plaintiffs who represent a class of individuals, where damages are awarded even to the individuals within the class who did not participate in the class action, provided that such individuals were not otherwise excluded. In other words, under Korean “class actions”, only the individuals who are named as a party to the litigation are compensated or redressed.
With certain exceptions under Article 87 of the Civil Procedures Act, only lawyers may represent employees before the court.
Employment and other related disputes between employers and employees may be resolved privately through arbitrations, mediations and settlements. Moreover, such disputes may also be resolved through arbitrations, mediations and settlements administered before the court and the Local Commissions.
Under the principle of private autonomy (ie freedom of contract), pre-dispute arbitration agreements regarding disputes relating to working conditions etc. are, as a principle, effective if they are included in the employment contracts. At the same time, labour laws, including the Labor Standards Act, are considered as mandatory provisions which cannot be avoided via contracts. Therefore, any agreement that (i) excludes such labour law provisions or (ii) is less favourable to the employees compared with labour law provisions are invalid. For example, the Korea Supreme Court has held that agreements which require employees to forfeit their rights to severance pay or rights to take legal actions against employers relating to severance pay are invalid because such agreements go against the Labor Standards Act.
Article 98 of the Civil Procedures Act imposes the cost of the lawsuit upon the losing party. As such, the losing party, as a principle, is responsible for the litigation fees. On the other hand, attorney’s fees are divided between the parties in accordance with Article 3 of the Rules on Calculation of the Attorney’s Fees.