I. Summary
This dismissal case concerns a TESOL (Teachers of English to Speakers of other Languages) Institute (hereinafter referred to as “the Employer”) and an American native-speaking English teacher (hereinafter referred to as “the Employee”) they hired. The TESOL Institute made two employment contracts: one was a three-week temporary contract prior to her receiving an E-2 visa, and the other was a one year contract. She completed the three-week contract, but after evaluating her teaching, the Employer concluded the Employee was not a suitable TESOL teacher, and dismissed her before the one-year employment contract began. However, the Employer claimed that he did not dismiss the Employee, but she resigned after mutual agreement. As the Employer did not implement the procedures required for dismissal in terminating the employment, if she was dismissed, this was definitely unfair dismissal. Accordingly, the major question in this case was whether the Employee was dismissed or she agreed to resign.

The details of this case are as follows:

1) The Employer, which specializes in TESOL, has a head office in Seoul and operates a branch in Busan. As one teacher at the Busan branch resigned suddenly, the Employer decided to invite the Employee to work as a temporary teacher before getting her an E-2 visa (which requires a regular employment contract) so the Employer could fill the vacant position.

2) On August 6, 2009, the Employee signed two employment contracts with the Employer: one a temporary employment contract and the other a one year employment contract (Sep 5, 2009 to Sep 4, 2010).

3) The Employee was assigned to the Busan branch after six days’ training in TESOL at the head office in Seoul.

4) The Employee completed her three week temporary employment contract on August 28, and the Employer told her to come to the Seoul office before she entered into the E-2 visa issuance procedures.

5) On September 2, 2009, the Employer met the Employee and told her that she was better-suited as an English conversation teacher rather than a TESOL teacher and asked a recruiter to find a position for her. The Employee made a phone call and asked for help from a lawyer whom she knew through a friend. The lawyer called the Employer and persuaded him to let her stay in Employee housing for one more month. After this call, the Employer and the Employee signed an agreement as to salary for the temporary contract period, and permission for her to stay an additional month in Employee housing.

6) On November 24, 2009, the Employee applied to the Labor Commission for remedy for unfair dismissal, but the Labor Commission held a hearing and rejected the application on January 18, 2010, judging that the agreement for wage settlement and permission to stay an additional month in Employee housing was effectively agreement that she had resigned.

7) On February 10, 2010, the Employee appealed the Labor Commission’s decision. Additionally, she included in her appeal a request for financial compensation rather than reinstatement as she had already signed a new employment contract with a high school and had begun working on November 9, 2009.

8) On April 22, 2010, the National Labor Relations Commission held a judgment hearing and overruled the Labor Commission’s decision, judging that the agreement between the Employer and the Employee was only on settlement of wages and should not be interpreted as a voluntary resignation.

II. Reasons for the Decision of the Seoul Labor Commission

The Seoul Labor Commission rejected the Employee’s application for remedy for unfair dismissal for the following reasons:
“On September 2, 2009, the Employer called a meeting with the Employee, informing her that TESOL teaching was not suitable for her and that she would be able to find a position as an English conversation teacher through a recruiter. In response, 1) the Employee asked for help from a lawyer that she came to know through a friend, so that she could continue to stay in Employee housing. 2) After a telephone conversation with the lawyer, the Employer signed an agreement that contained an adjustment of salary accrued during her temporary work in Busan and two days’ expenses at a hotel, as well as permission to stay one more month in Employee housing. The Employee signed as well. 3) After this, the Employer paid the adjusted salary to the Employee and allowed the Employee to stay in Employee housing another month. During this period, she neither came to work nor complained about termination of her employment contract. 4) The Employee had already gotten a job at another workplace before filing the application for remedy. In consideration of all these facts, it seems that both parties agreed to terminate the employment contract before the contract started, and so we find it hard to agree that the Employer dismissed the Employee.”

III. Appeal to the National Labor Relations Commission

The Employee appealed to the National Labor Relations Commission, stating that she had been dismissed unilaterally and had never agreed to resign. The Employee claimed the following, stating that the Labor Commission’s decision was unfair because it had been made without enough investigation of the facts.

1) When informed of her dismissal by the Employer on September 2, 2009, the Employee had not received any payment for her temporary employment, and was also suddenly without any housing. Under such unexpected conditions, the Employee called a lawyer, whom she came to know through a friend, to ask for some help. At this request, the lawyer felt so bad about the Employee’s situation that, although there was no legal relation between them, he called the Employer. The lawyer was not playing any role as a legal representative for the Employee, but simply asked the Employer to allow the Employee to stay in Employee housing for one more month, free of charge.

2) The agreement that the Employee signed at the place where she had been notified of her dismissal on September 2, 2009, does not contain any information about the Employee’s status, but only about a salary adjustment for actual work done. The Employer paid her salary and allowed the Employee to stay one more month in Employee housing since she was a foreigner and would be homeless without such permission. However, this cannot be regarded as evidence of an agreement to resign.

3) The reasons why the Employee did not challenge the dismissal when she was informed of it was due to her ignorance of remedy procedures according to labor law and having no money to hire a legal representative. The Employee came to understand the procedures for remedy for unfair dismissal through consultation at the Seoul Global Center, and right after she had some money for legal fees, she filed for remedy.

4) The Employee came to Korea to earn money by working as a native English teacher. It is not true that she could not apply for remedy because she had gotten a new job at another school. The reasons why the Employee got a new job were to pay for basic living expenses and save money for legal retainer to file an application for remedy for unfair dismissal.

IV. Judgment of Review Case and Order for Financial Compensation

1. Decision of the National Labor Relations Commission (April 22, 2010)
The NLR Commission confirmed that the agreement the Employer made at the time he dismissed the Employee was only an agreement to pay her salary, and not an agreement by the Employee to resign. Accordingly, the Commission ruled that this was an unfair dismissal as the Employer did not comply with necessary procedures for dismissal (i.e., written notification). As the Employee requested financial compensation instead of reinstatement, financial compensation was de