Ⅰ. The rules of employment: Concept and Making Changes

1. Concept

Article93. Preparation and Submission of rules of employment
An employer ordinarily employing ten workers or more shall prepare the rules of employment concerning matters described in any of the following sub paragraphs and submit it to the Minister of Employment and Labor. If any amendment to the rules of employment occurs, the same procedures shall also be followed:
1. Matters pertaining to the start and finish time of work, recess hours, holidays, leaves and shifts;
2.
Matters pertaining to the determination of wage, calculation of wage, means of payment, closing of payment, time of payment, and wage increase;
3. Matters pertaining to calculation of family allowances and means of payment;
4. Matters pertaining to retirement;
5.
Matters pertaining to retirement pay prescribed in Article 8 of the Employee Retirement Benefit Security Act, bonuses, and minimum wage;
6.
Matters pertaining to meal allowance and allocation of expenses for operational tools or necessities;
7. Matters pertaining to educational facilities for workers;
8.
Matters pertaining to the maternity protection of female workers, such as maternity leave, child-care leave, etc., and support for reconciliation between work and family life;
9. Matters pertaining to safety and health;
9-2.
Matters pertaining to improvement of the workplace environment according to worker characteristics, such as gender, age, or physical attributes;
10. Matters pertaining to support concerning occupational or non-occupational accidents;
11.
Matters pertaining to the prevention of workplace harassment and the measures to be taken in cases of occurrence of workplace harassment;
12. Matters pertaining to award and punishment; and
13. Other matters applicable to all workers of the business concerned.


The rules of employment refer to the company regulations that an employer stipulates unilaterally regarding working conditions and service rules. The Labor Standards Act stipulates the employer’s obligations for preparing and filing their rules(Article 93) and ways to compose and change the rules(Article 94). In particular, if a labor contract includes employment conditions which are below the standards stipulated in the rules of employment, the nonconforming part of the labor contract is null and void(Article 97). Korean law stipulates that areas in which employment conditions have been invalidated shall be governed by the standards provided for in the rules of employment. The rules of employment are to put the employer and workers on equal footing, which shows that the employer can compose or revise the rules unilaterally when revising working conditions advantageously, but shall obtain collective consent from the majority of employees when revising them disadvantageously.

2. Making changes to the rules of employment

Article 94. Procedures for the Preparation and Amendment of Rules of Employment
① An employer shall seek the opinions of a labor union, if there is a labor union comprised of the majority of workers in the workplace concerned, or the opinions of the majority of workers, if there is no such labor union, in regards to the preparation of and/or amendment to the rules of employment. However, if the rules of employment are modified unfavorably for the workers, the employer shall obtain the workers’ consent.

(1) Advantageous changes

When preparing or revising the rules of employment, the employer shall, as a rule, consider the views of the majority of employees. For favorable changes to working conditions, it is sufficient that the employer listens to the majority of employees, but there is no obligation to consult with or obtain consent from them. Violations of the duty to consider employee opinions regarding changes to the rules of employment are subject to punitive action; the violation does not invalidate the change(s). While considering employee opinions serves as a way of protecting those employees by giving the employer opportunity to reflect their opinions in changes, but the failure to do so does not invalidate those changes.

(2) Disadvantageous changes

When working conditions stipulated in the rules of employment are changed disadvantageously, existing employees will continue to work under the previous conditions if their consent was not received for the changes, but new employees hired after revision of the rules of employment will be subject to those changes.

1) Changing the rules of employment unfavorably
The acceptable methods for receiving employee consent are as follows: ① If there is no labor union composed of the majority of employees, it is necessary to receive consent from the majority of employees by means of allowing them to hold their own conference. Here, ‘obtaining consent through a conference’ means that employees get together and exchange their opinions for and against particular issues at the division or department level of a workplace or business, without interference from or participation of the employer, and then gathering their collective opinions for delivery to the employer. ② If there is a labor union composed of the majority of employees, the revised rules of employment(with the union’s consent to the changes) will also be in effect for non-union employees who have not had any input into the agreement. ③ If working conditions are different for production and management divisions, and for regular and non-regular employees, consent shall be received from those groups who will be affected by the revised working conditions. This means the employer does not have to receive consent from the majority of all employees if some of them will not be affected by the changes. ④ At the time the rules are changed, even though only a certain group of employees will be disadvantageously affected, if the revisions will affect other groups of employees, consent from these other groups shall also be required.

2) Criteria for changed working conditions to be considered disadvantageous
Whether amendment of the rules of employment is disadvantageous or not shall be evaluated substantially by considering all factors such as reasons and procedures for the amendment, characteristics of the jobs, and the structure of each regulation of the rules of employment. Accordingly, even if one working condition has been revised disadvantageously whether the rules as a whole are disadvantageous should be determined after considering all the changes. This includes other related factors which were changed favorably or other favorable changes which were made in return for the disadvantageous change.
Court rulings have showed: ① In cases where regulations on accumulating retirement payments were changed disadvantageously to non-accumulating retirement payments, if employee wage were increased and their working hours shortened, that change will not automatically be considered disadvantageous; ② In cases where a wage regulation in the rules of employment was changed disadvantageously for some employees, but advantageously for other employees, such changes shall be considered as disadvantageous: ③ Reducing or abolishing overtime work exceeding legal standard working hours cannot be regarded as a disadvantageous change to the rules of employment; ④ In cases where working at night or on holidays in the working shift system, employees used to receive additional allowances. However after changing work shifts to day time only, night and holiday work allowances were no longer available. In this case, the reduced wage cannot be seen as disadvantageous.