Ⅰ. Concept and Types of Ordinary Dismissal

1. Concept

Ordinary dismissal refers to termination of the employment contract due to the failure of the employee to fulfill hisher obligation to provide labor service in accordance with the employment contract. Therefore, ordinary dismissal requires a reason, attributable to the employee, that the employee cannot provide work. A reason attributable to the employee means that the employee falls into the remarkable condition where the employee becomes mentally or physically unable to provide the work, which is the employee’s main obligation according to the employment contract, and as a result, cannot carry out his assigned work sufficiently in the workplace. That is, the term employment contract in the Labor Standards Act means a contract which is entered into for a worker to offer work and for an employer to pay wages for that work(Article 2 of the Labor Standards Act). As the reason the employee cannot provide work according to the employment contract is attributable to the employee, the employer can terminate the employment contract on the grounds of the employee’s severe violation of the employment contract. This is referred to as ordinary dismissal.

2. Types of ordinary dismissal

In most cases, ordinary dismissal is for reasons attributable to the employee, but court rulings also place termination of an employment contract due to company bankruptcy or voluntary closure in the category of ordinary dismissal.

(1) Dismissal due to reasons attributable to the employee

1) In cases where the employee is not qualified for the work, or lacks the necessary vocational skills
① In cases where the employee is unable to obtain a qualification certificate essential for work, or fails an examination required for appropriate work performance, or he/she lacks the necessary professional knowledge or skills, this may be grounds for ordinary dismissal. ② If the employee’s work performance has been evaluated as very poor, the employer cannot dismiss the employee for that reason only. However, in cases where the employee’s work ability has been evaluated remarkably deficient in objective reviews, a dismissal may be determined as attributable to the employee. ③ In cases where the employee has a severe handicap after completing medical treatment for an occupational injury, if the employee cannot carry out or completes his previous assignments very poorly, the employer may be justified in dismissing the employee.

2) In cases where the employee is sick with an illness that makes it unreasonably difficult to provide work.
① In cases where a driver has become blind, or in cases where a cook has contracted an incurable infectious disease, dismissal is regarded as attributable to the employee. ② In cases where the employee is injured due to actions unrelated to work, and cannot work as normal for a considerable time even after taking a leave of absence twice, dismissal may be justifiable.

3) In cases where potential exists for a company’s secrets to be leaked
In cases where an employee is in a position to know a company’s business secrets and has a close relationship, through marriage, with a competitor’s management, or the employee has a close relative or friendly relationship with a competitor company’s directors, dismissal may be acceptable to prevent the leakage of business secrets.

(2) Dismissal due to reasons attributable to the employer

1) In cases where a bankruptcy administrator dismisses all employees after the declaration of bankruptcy, this dismissal is not managerial dismissal, but ordinary dismissal, and so the company does not need to follow the requirements in the Labor Standards Act as to the process for dismissal for managerial reasons.

2) In cases where the employer has made every effort to resolve financial problems, and has concluded that closing the business is the most reasonable method, and closed the business and dismissed the employees, these dismissals are justifiable.

3) In cases where the employer has dismissed an employee because the work that was supposed to be carried out is no longer needed, this dismissal is not for managerial reasons, but is ordinary dismissal.

4) In cases where an employee was hired to work at a specific workplace, and the company’s license to use the specific workplace has expired, dismissal of that employee may be justifiable.

Ⅱ. Advantages to Ordinary Dismissal

1. Ease of dismissal

In cases where the employee neglects his primary duty in the employment contract to provide work, or carries out his assigned duties insufficiently, the employer can notify the employee of termination of his employment contract. This ordinary dismissal serves to increase the number of reasons for terminating the employment contract and make flexibility in manpower management possible.
There are three types of dismissal: ordinary dismissal, disciplinary dismissal, and managerial dismissal. Here, disciplinary dismissal and managerial dismissal have strict requirements and procedures that must be followed for the dismissal to be determined justifiable.
Disciplinary dismissal requires the employer to follow the disciplinary procedures stipulated in the collective agreement or the rules of employment. If the employer does not do so, the dismissal becomes unfair even though the reason was serious enough to justify dismissal. In one case, the courts ruled, the collective agreement, the rules of employment, and its related rules regulated that the employer should form a disciplinary action committee that includes a labor union representative, and provide the employee concerned the opportunity to attend the disciplinary action committee meeting where he/she may explain his side and submit any defending documents. However, if the employer dismisses the employee concerned in violation of the disciplinary procedures, this dismissal is unfair and invalid regardless of any justifiable reason for dismissal.
Managerial dismissal requires very strict criteria and the employer to comply with procedures according to dismissals for managerial reasons in Article 24 of the Labor Standards Act to be determined justifiable in accordance with Article 23(1) of the same Act. These conditions and procedures for managerial dismissal are: ① there must be an urgent necessity in relation to the business; ② the employer shall make every effort to avoid dismissal; ③ the employer shall follow reasonable and fair criteria for the selection of those persons subject to dismissal; and ④ the employer shall inform and consult in good faith with the labor union(where there is no such organized labor union, the employee representative) regarding the methods for avoiding dismissals and the criteria for dismissal at least 50 days before the intended date of dismissal. The above four conditions and procedures should be observed in order for managerial dismissals to be determined justifiable.

2. No need for procedures of dismissal

Ordinary dismissal does not become unfair if procedures required for disciplinary and managerial dismissals are not followed. In this review, ordinary dismissal plays a role in reducing the restrictions on dismissal, and is used when there are reasons attributable to the employee, unlike disciplinary and managerial dismissals. Related examples include:
① Ordinary dismissal does not require that disciplinary procedures be followed, such as holding a disciplinary action committee meeting and providing opportunity for the employee to explain his opinions.
② A certain employee claimed that dismissal was unfair because the company did not follow the procedures of holding a personnel committee meeting and did not request submission of a doctor’s medical certificate, as stipulated in the collective agreement. However, there were no rules stipulated in the company’s collective agreement or the rules of employment that the company had to hold a personnel committee meeting for dismissals besides disciplinary dismissal. The company did not need to hold a personnel committee meeting to confirm there was a reason to dismiss the employee, so this dismissal is not simply illegal because the company did not follow the procedures for dismissal.

Ⅲ. Considerations in Determining Justification for Ordinary Dismissal

1. Good faith principle
Where a reason for ordinary dismissal has not become serious enough to terminate employment, dismissing the employee without sufficient consideration of the employee’s situation according to the principle of good faith and sincerity will be determined unjustifiable and an abuse of managerial rights by the employer. For example, in cases where the employer intends to dismiss an employee due to a physical disability, if the employee can be rehabilitated or otherwise recover from that disability in a relatively short time, it would be necessary to keep the employee for a certain period of time by way of assigning him to lighter work.

2. Observance of legal procedures
Ordinary dismissal should be prepared for with legal procedures. As ordinary dismissal is a unilateral action by the employer to terminate the employment contract, the employer must follow the procedural requirements in the Labor Standards Act if an employer intends to dismiss an employee. The employer shall notify the employee of the reason(s) for dismissal and the date of such dismissal in writing(Article 27 of the LSA). The employer shall give notice to the employee at least thirty days before the planned dismissal. If notice is not given thirty days before the planned dismissal, ordinary wages of at least thirty days shall be paid to the employee in lieu of notice(Article 26 of the LSA). A written notification of dismissal is related to the justification for dismissal, but such advance notice of dismissal can be substituted with money.
According to judicial rulings, ordinary dismissal does not require the observation of procedural regulations for other forms of dismissal. If there are no regulations in the collective agreement or rules of employment requiring a personnel committee meeting to be held for dismissals outside of disciplinary dismissal, a failure to follow such disciplinary dismissal procedures is not illegal. As the dismissal is an ordinary dismissal, the employer does not have to consider the procedures that involve holding a disciplinary committee meeting or provide opportunity for the employee to explain his opinion.

Ⅳ. Ordinary Dismissal Due to Poor Performance

Possession of insufficient skills for the job and poor work performance is considered reasons for ordinary dismissal. In order for such dismissals to be justifiable, certain conditions must be met.
Remarkably insufficient skills for a job and poor work performance can be reasons for ordinary dismissal despite the lack of reason for disciplinary action, since the purpose for a labor contract is for an employee to offer work for wages and for the employer to pay wages for that work. A remarkable failure to fulfill the obligation to provide work can become a reason for terminating the employment contract. However, as Article 23 of the Labor Standards Act restricts such dismissals, there should be a justifiable reason why poor performance or a failure to provide the contractual work is serious enough to dismiss the employee. The court stipulates that justifiable reasons for a dismissal due to poor work performance or a failure to provide the contractual work mean that the employee’s work performance is too poor to maintain employment relations according to socially accepted understanding. Such situations shall be judged on a case-by-case basis. Additionally, the Labor Relations Commission has also decided that an employer’s dismissal of an employee for failure to provide contractual work serious enough to make it impossible to maintain employment relations shall be deemed ordinary, not disciplinary, dismissal.