Contributed By Yoon & Yang LLC (Seoul - HQ)
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.