I.        Procedures to Request Remedy for Unfair Dismissal, etc.

If an employer dismisses, lays off, suspends, or transfers a worker, or reduces wage, or takes other punitive actions against a worker without justifiable reason, the worker may apply to the Labor Relations Commission for remedy. In addition, any labor union whose rights have been infringed by unfair labor practices may also do so(Article 28 of the Labor Standards Act, Article 28 of the Union Act). As these labor disputes are dynamic, continuous, and collective, administrative agencies or courts cannot always be expected to handle them fairly, promptly, and reasonably, due to the inflexibility of bureaucracy and lack of experience of some agencies. The Labor Relations Commission is an independent administrative agency that has the authority and the ability to resolve labor disputes fairly, promptly, and in a way that is appropriate to the professional situation at hand.465)
When a worker, without justifiable cause, is dismissed, laid off, suspended, transferred, has his/her wages reduced or receive any other punitive action, he/she may request remedial action from the Labor Relations Commission(LRC). Such applications for remedy shall be made within 3 months from the date of the allegedly unfair act in question. If the LRC determines the dismissal is unfair, it may order the employer concerned to restore the dismissed worker to the previous job or pay monetary compensation to the worker(Article 30(3) of the LSA).
In cases where the worker doesn’t want to return to the previous workplace, the employer shall provide the worker with money or other valuables that are at least equal to the wages which the worker would have been paid during the period of his/her absence if he/she had not been dismissed. Money or other valuables at least equivalent to the wage includes monetary compensation for the unfair dismissal, and is paid in lieu of reinstatement.
An employer who fails to comply with a remedial order from the LRC for unfair dismissal or disciplinary measures(suspension from office, position change, pay cut, etc.) shall pay a fine(Article 33 of the LSA). This fine shall be imposed on any employer who has received, and ignored, a remedial order from the National or Regional Labor Relations Commission. Even should the employer refuse to accept the order and file an administrative suit, the fine shall still be imposed. The fine may not exceed 30 million won, but may be imposed up to twice a year for a maximum of 2 years. An employer who fails to comply with the finalized remedial order shall be imprisoned for a term not exceeding 1 year or a fine not exceeding 10 million won(Article 111 of the LSA).

1. The Procedure for Handling Tasks in Adjudication Meetings
The Labor Relations Commission reviews applications and admits, rejects or cancels labor cases, determines eligibility of the parties involved, investigates, conducts interviews and holds judgment hearings within 60 days after the initial application date.
(1)        Applications for remedy
If an employer dismisses or treats a worker unfairly, the worker may apply to the Labor Relations Commission for remedy. This application for remedy shall be made within three months from the date on which the unfair dismissal and/or related actions took place(or from the date of termination in cases where such activities continue). The worker must apply for remedy with the Labor Relations Commission nearest his/her workplace regarding unfair dismissal or unfair labor practice.
(2)        Investigation
The Labor Relations Commission shall, without delay, conduct necessary investigations and inquiry of the parties concerned, upon receipt of an application for remedy. The Labor Relations Commission shall ① designate an investigator responsible for the process of investigation, ② demand the applicant submit evidence of the reason(s) for the application,
③ deliver a copy of the application for remedy or statement of reasons to the employer, and give opportunity for rebuttal and associated evidence to explain the employer’s actions, and,
④ if necessary, order the parties, witnesses or other related persons to attend a hearing and give their testimonies. Further investigation will then be carried out as deemed necessary.466)
(3)        Hearing
The Labor Relations Commission shall hold a hearing within 60 days from the date the application was received. This hearing is to review documented evidence both parties have submitted, and information gathered during investigation, and then decide whether unfair dismissal or unfair labor practice actually took place. The committee members(public-interest, worker and employer representative members) assigned to the case shall attend the hearing, have both parties verify their claims, and interview witnesses and other related persons. At the judgment hearing right after the hearing, the public interest committee members shall decide whether unfair dismissal or unfair labor practice took place. The worker and employer committee members may also interview the parties to the case and witnesses, and give their opinions before the public interest committee members give their decision during the judgment hearing.

1)        Regarding decisions disadvantageous to certain personnel such as dismissal, the first burden of proof is on the employer to verify whether the worker committed a particular action, whether such action violated the rules of employment, and whether the disciplinary action, severity and suitability of punishment is justified. Regarding unfair labor practice, the first burden of proof is on the worker and the labor union to verify the employer’s intention to commit the unfair labor practice, unfair treatment, and/or the existence of domination and interference.467)
2)        However, regarding an employer’s statements of reasons for decisions disadvantageous
to certain personnel such as dismissal, the burden of proof then falls on the worker to verify that he/she did not commit a particular action, that he/she did not violate the rules of employment, and/or that the punishment was too severe or unsuitable to the violation. Regarding unfair labor practices, the employer also has a burden of proof to verify that he/she did not intend to commit an unfair labor practice, or give disadvantageous treatment to the company personnel due to their union activities, or obstruct those union activities, or cause deterioration to the union organization.468)
(4)        Settlement
Labor cases filed for remedy at the Labor Relations Commission are often resolved between the two parties peacefully before going to the judgment stage of the Commission’s activities. Such settlement not only helps to restore labor-management stability, but also aids implementation of the employer’s agreement more effectively than a remedy order from the Labor Relations Commission. The Labor Relations Commission can always recommend or arrange a draft of settlement for both parties in the process of investigation and interview. Once settlement is established, the statement of settlement is composed, which has the same effect as settlement decided by a court.469)
(5)        Judgment
The judgment hearing is for the purpose of determining whether unfair dismissal or unfair labor practice has occurred, and takes place after the hearing. The judgment hearing is held with all three public interest committee members, and resolutions pass with approval from at least two of the three committee members. The Labor Relations Commission issues an order for remedy to the employer when it is deemed that unfair dismissal or unfair labor practice has occurred, or cancels the application for remedy if it is deemed that they have not. The Labor Relations Commission shall deliver a letter of the verdict to the employer and workers concerned within 30 days of the date of judgment.
(6)        Details in orders for remedy
The Labor Commission, upon arrival of the application for remedy, shall carry out an investigation into factual aspects of the case and conduct an inquiry of the parties concerned and, based on the outcome of the investigation and the inquiry, may issue an order for a remedial action by the employer or decide to dismiss or return the application for remedy when the case is found not to be subject to unfair labor practice.470)
※ The application may be dismissed or returned in any of following cases:
-        When the applicant union is not a union organization recognized under the Trade Union Act;
-        When the filing is made after 3 months from occurrence of the alleged unfair labor practice;
-        When it is clear that the action in question is not an act of unfair labor practice; or
-        When the remedy is neither beneficial to the employee nor possible to achieve.
1)        Dismissal cases
① Rehabilitation
If a new labor contract is drawn in the form of re-employment, it is violating the purpose of rehabilitation, so the employer shall reinstate the dismissed employee to his/her pre-dismissal position or equivalent position.
② Back pay(Retroactive pay)
The employer shall pay the amount of wage the employee could not receive during the dismissal period. However, if the employee has earned any income from post- employment, the amount of back pay shall be adjusted according to the income earned.
2)        Conditional contract (Yellow-dog contract) The contract shall be nullified.
3)        Refusal of collective bargaining
Order for Initiation of collective bargaining or collective agreement shall be given.
4)        Domination or interference
Remedy is almost impossible, but such behaviors shall be at least stopped or prevented from reoccurrence.

2. Failure to comply with an order for remedy (Enforcement levy)
Employers are required to obey orders for remedy, and penalties are applied if they fail to do so(Article 111 of the LSA, Article 89 of the Trade Union Act). However, this criminal punishment is valid after the remedy order is confirmed finally. If an employer, after receiving a remedy order from the LRC and a decision on reexamination concerning a remedy order from the National Labor Relations Commission, fails to comply by the compliance deadline, an enforcement levy not exceeding 20 million won shall be imposed on the employer. The LRC may impose this enforcement levy twice a year for up to two years from the date the initial order for remedy was issued, or until the order is complied with. If an order for remedy issued by the LRC is canceled in accordance with a decision rendered by the National Labor Relations Commission after reexamination or a confirmed court ruling, the LRC shall immediately stop imposing the enforcement levy and return any monies already paid, by virtue of its authority or upon request of the employer.
Controversy may arise when deciding “fulfillment” of the remedy order if there are no criteria to determine “fulfillment” of the orders from the Labor Relations Commission. There will be disputes among parties and the LRC in understanding these conditions. So, the purpose of pursuing complete fulfillment is to prevent these disputes, ensure the effectiveness of an order for remedy, and resolve labor disputes in the early stages(Article 79 of the Rules on the LRC).
1.        Fulfillment of an order to reinstate the worker to his/her previous job is when the employee has been assigned the same position the employee had when he/she was dismissed, with the same kind of work duties, or when the employee has been assigned other work duties with his/her prior consent. However, if the same position or work is no longer available for unavoidable reasons, assigning a similar position or work duties to the employee can be regarded as fulfillment of the order for remedy.
2.        Fulfillment of the duty to pay the amount equivalent to wages is when the total amount of wages that the worker would have received, up to the time of complete payment, is paid to the worker.
3.        Fulfillment of an order for monetary compensation is when the amount stipulated in the written judgment is paid.
4.        Fulfillment of other orders for remedy occurs when the items stated in the written judgment are implemented.
5.        In cases where the parties agree to a settlement other than an order for remedy for unfair dismissal, fulfillment occurs when that settlement is implemented.

3. Procedures for appeal
If an employer or worker is aggrieved by an order for remedy or decision to dismiss rendered by a Regional Labor Relations Commission, he/she may apply to the National Labor Relations Commission for reexamination within ten days of the date on which he/she received the notice of the order for remedy or decision to dismiss the application. The procedures for application to the National Labor Relations Commission are the same as the procedures for application to the LRC. An employer or worker may file a lawsuit in accordance with the Administrative Litigation Act against the decision made by the National Labor Relations Commission after reexamination within fifteen days from the date on which he/she received the notice of decision on reexamination. If an employer or worker is aggrieved by the decision of the National Labor Relations Commission and appeals to the Administrative Court, the National Labor Relations Commission becomes a defendant and the worker(the employer) becomes a defendant assistant participant. If no application for reexamination is made and no administrative lawsuit is filed within the periods listed above, the order for remedy, decision to dismiss or decision on reexamination shall be considered confirmed.

4. Monetary compensation system
The monetary compensation system was introduced so that workers not wishing to be reinstated can still receive remedy. Under the monetary compensation system, the Labor Relations Commission may order the employer to pay the worker an amount not less than the wages he/she would have received if he/she had worked during the period after he/she was

5. Unfair dismissal and monetary compensation
Matters related to monetary compensation for unfair dismissal are not dealt with by the Labor Relations Commission. However, the courts may require an employer to make monetary compensation to the employee for purposely dismissing him/her even though that dismissal is evidently unfair.
[Related ruling]471) In cases where an employer dismisses an employee to push him/ her out of the workplace without a justifiable reason for disciplinary dismissal, or in cases where the reason for dismissal was clearly unfair considering the content of the rules of employment, or in cases where the employer could recognize that the dismissal would be unfair if he/she had paid a little attention, that disciplinary dismissal would be an abuse of the employer’s right to discipline the employee. If this dismissal is unfair enough to be accepted as against social norms or socially accepted rules, this not only becomes an unjustifiable dismissal according to Paragraph 1 of Article 23 of the Labor Standards Act, but also an illegal act that inflicts emotional distress on the employee concerned.


II.        Compromise as a Means of Settling Labor Disputes

1. Concept
Of the total labor cases brought to the Labor Relations Commission, the percentage of cases resolved through compromise has gradually increased: 25% in 2010, 32% in 2011, 34% in 2012 and 34 % in 2013.472) This reflects the LRC’s view that compromise is one of the most important methods to resolving labor disputes, a view it has held since the provision Compromise was introduced into the Labor Commission Act in April 2007.473) LRC judgments result in one party winning all the benefits, while the other loses all, which may result in an appeal that extends the labor dispute beyond what was expected.
Compromise plays a role in preventing resolution of labor cases from such delays, and
aims for amicable conclusion between the company and employee concerned. Despite this important role, the compromise system is regarded as a method of anything goes to solve disputes in actual practice. Accordingly, it is necessary to understand the use of compromise through actual labor cases resolved reasonably in such a way, and seek how to make more frequent use of it.

2. The Legal Status of Compromise and its Use
(1)        The legal status of compromise
The Civil Act stipulates(in Articles 731 and 732) that a compromise shall become effective when the parties have agreed to terminate a dispute between themselves by mutual concession. A contract of compromise shall have the effect that the rights conceded by one of the parties are thereby extinguished and the other party will, in turn, acquire the pertinent rights by virtue of the compromise. Judicial rulings have agreed that when reaching a compromise, the previous agreement is extinguished by virtue of the newly established effects of the compromise, and the compromise becomes legally binding regardless of any contradicting content in the previous agreement.474)
According to Article 16-3 of the Labor Commission Act, the LRC may recommend conciliation or present a proposal for such at the request of the parties concerned or by virtue of its authority before a judgment, order or decision is rendered pursuant to Article 84 of the Trade Union & Labor Relations Adjustment Act or Article 28 of the Labor Standards Act. The conciliation statement shall have the same effect as a compromise imposed by the courts in accordance with the Civil Procedure Act.
(2)        Use of compromise
1) Designing the compromise
The compromise process in an unfair dismissal case brought to the LRC begins with the necessary time to consider the compromise, when a judge in the judgment hearing has suggested a compromise and one of the parties has accepted it. In general, the party requesting a compromise in the course of an unfair dismissal case is regarded as having a weaker claim, and so a compromise is seldom requested before the judgment hearing starts.
If the employer feels likely to lose the case, a compromise is quite acceptable. This is the case also if the employer feels he has the potential to win the case, if the cost of settlement is much lower, as the compromise will prevent the employee from appealing. From the employee’s viewpoint, a compromise is desirable if he/she does not wish to continue working for the employer, has gotten a new job, or feels he/she cannot win the case.
2) Settlement money
Settlement money is normally calculated by the employee’s wage. In cases where the employee has a favorable position in a dismissal case, he/she requests monetary compensation up to one year’s wages, considering the wages that should have been received during the dismissed period and the ability to earn more upon reinstatement at the workplace. However, if the employee has an unfavorable position in the dismissal case, he/she usually accepts a compromise with the settlement money covering only the period of dismissal. Accordingly, after the LRC has investigated the facts related to the justification for dismissal in the judgment hearing, it will suggest a compromise including a cash settlement.
Should a considerable gap exist between what each party feels is acceptable, the LRC will endeavor to narrow the gap through mediation to encourage settlement. Nevertheless, if there is no compromise reached, the LRC tends to avoid a quick judgment and instead opts to give both parties time to consider ways to reach a compromise.
(3)        Difference between compromise and monetary compensation
Monetary compensation is a system where the company provides the employee monetary compensation if the employee does not desire reinstatement upon such a verdict in an unfair dismissal case(Article 30 of the Labor Standards Act). Any requirement for monetary compensation shall begin when an employee receives notification of the judgment hearing date, with the calculation period for compensation calculated from dismissal date to judgment date(Articles 64 and 65 of the Labor Relations Regulation). Accordingly, monetary compensation can be claimed for wages missed during the period after dismissal, and as this amount cannot include compensation for emotional damage, the compensation is relatively low and limited.475) On the other hand, since a compromise is not related to the level of monetary compensation, the greater the possibility for unfair dismissal to be determined, the higher the compensation request will be, while the lower the possibility for unfair dismissal to be determined, the lower the compensation request will be: for example, one month’s wage, equivalent to the one month compensation requirement for a failure to give advance notice of dismissal.

3. Labor cases resolved through compromise
(1)        A case brought against Company A
Company A, a Taiwanese semiconductor company with five Korean employees at its Korean branch is selling semiconductor components to Korean electronics companies. For the past few years, this company has been in deficit, and determined that the branch manager’s poor sales skills were to blame. The company dismissed the branch manager without notice, and paid him the required one month compensation in August 2014. The branch manager then applied to the LRC for remedy for unfair dismissal.
The LRC held a judgment hearing on November 19, 2014 where the branch manager claimed that the poor sales performance that the company claimed was partly due to the high prices of the company’s semiconductors, his legal status was not as an employer since he only worked as a sales manager, and the Korean branch was a sales office and not an autonomous organization. These claims greatly weakened the company’s chances of winning the case.
The LRC estimated that as the branch manager had lost the company’s confidence, he would be unable to work effectively upon reinstatement, and suggested a compromise be reached, which both parties accepted. In the judgment hearing, the employee demanded 12 months’ wages as a condition for settlement, while the company responded with an offer for 3 months’ wages in consideration of the already-paid compensation for no advance notice of dismissal, and the labor attorney’s service fees. The LRC judge then proposed compensation equal to 8 months’ wages to both parties, but the company rejected it. The LRC then explained that the parties would have one week to consider methods for settlement, and that a judgment would be made if the two parties were unable to reach agreement by that time.
When the company’s labor attorney explained to the company that the LRC was more in favor of the employee’s claims and additional costs would result if they appealed a verdict of unfair dismissal, the company agreed to increase the settlement to 5 months’ wages. The company’s labor attorney then persuaded the employee’s labor attorney(whose client had already accepted the judge’s proposal for 8 months’ wages) that the employee’s severance pay would be reduced by two months considering that there had been fewer than 5 employees for some years previously. The employee then reduced his claim by an additional two months and accepted 6 months’ wages as a settlement. In the end, the company’s labor attorney successfully persuaded the company to accept this small difference, which also accepted the employee’s compromise. Ultimately, 5 1/2 months’ wages in compensation was accepted by both parties.
(2)        A case brought against Company B
Company B is a Korean branch office of a multinational company with head offices in Switzerland. An employee was assigned to the Korean branch office as a senior director on December 1, 2012, signing a two year contract. He had adjusted to Company B very well and worked faithfully, but suddenly received a letter of dismissal from Company B on August 30, 2013. The reason given for dismissal was suspicion that the employee had been involved in unfair price transactions with a customer while working at the head office in 2012. However, Company B did not investigate the incident thoroughly, and simply dismissed the employee immediately pursuant to a request from the head office. The judgment hearing at the LRC was held for this case on December 17, 2013.
As the company had dismissed the employee pursuant to a request from the head office without observing the disciplinary process stipulated in the rules of employment, it was very clear that unfair dismissal would be the verdict. The LRC Chairman suggested the parties settle the case, to which both parties agreed.
However, settlement was difficult due to significant difference of opinion on adequate compensation. The employee was unwilling to return to work, while the company could not win the case. When he considered that there were only 11 months left in his contract and he was unsure about continuing to work at the head office after completing it, the employee decided to accept 9 months’ average wage as compensation. The company agreed, and the settlement was finalized as 9 months’ average wage.