LABOR CASES

Dismissals

Required Disciplinary Procedures: Related Cases


I. Importance of Disciplinary Procedures
Justifiable disciplinary action is estimated by whether the following three aspects are justifiable: reasons for discipline, severity of punishment, and disciplinary procedures. Of special note is that if the employer does not follow appropriate disciplinary procedures, the disciplinary action is null and void even though there is sufficient reason for disciplinary action and the severity of punishment is reasonable. Disciplinary procedures fall into two categories. The first is a written notice (of dismissal etc.): if the employer fails to issue a written notice of dismissal, any dismissal will be considered unfair even though there is justifiable reason for dismissal. Secondly, if a provision exists in the Rules of Employment or collective agreement stipulating disciplinary procedures, the employer shall observe these procedures to ensure disciplinary action is justifiable. If these procedures are not observed, disciplinary action cannot be considered in effect despite the justifiability of the reasons. However, if no regulations are stipulated in the Rules of Employment or collective agreement concerning disciplinary procedures such as opportunity for the employee to attend the disciplinary action hearing and represent his/her own views, disciplinary action is considered to be in effect without disciplinary procedures. In this article, required disciplinary procedures will be clarified, using as reference related labor cases that Kangnam Labor Law Firm has represented.

II. Case One: Written Notice
Located in Mokdong, Seoul, “G” Institute employed about 20 teachers, both native English and Korean, to teach elementary and middle school students. Intending to balance the number of native teachers with Korean teachers, the principal of the institute verbally notified two foreign teachers in the middle of August of their coming dismissal, due to being estimated as the teachers with the lowest skills. On August 27, these two teachers were dismissed. The employer then sent written notification of dismissal to the two teachers (hereinafter referred to as “the Employees”) by text message and regular mail. The Employees applied to the Seoul Labor Commission for remedy on November 24, 2010.
The Labor Commission held a judgment hearing and stated the following:
“Both parties have stated their claims in this dismissal case, and the main point is placed on justification for dismissal: whether or not the reasons, procedures, and severity of punishment are appropriate. In estimating the justification for dismissal in this case, Article 27 of the Labor Standards Act states this basic requirement: ‘If an employer intends to dismiss an employee, the employer shall notify the employee of the reasons for dismissal and the date of such dismissal in writing. Dismissal shall take effect only after written notification is given to the employee.’ The employer claimed that he sent the employees written notification of dismissal by regular mail, but since the employer could not verify this fact with evidence, it is hard to believe that the employer properly implemented the procedures of giving written notice for dismissal stipulated in Article 27 of the Labor Standards Act. Accordingly, these dismissals are unfair without having to review whether the reasons for dismissal are justifiable. This Labor Commission has concluded that the employer should pay each employee 9.5 million won, which is the amount that the employees were supposed to receive each month in lieu of reinstatement.”
The employer claims that it would not be fair to give 20 million won as compensation, instead of a few hundred thousand won, on account of one missed document: written notification of dismissal. However, Article 27 of the Labor Standards Act clearly regulates that employers shall give written notification of dismissal, along with reasons for dismissal and effective date, before the dismissal takes effect. This means that written notification is an essential requirement for dismissal to be legally effective. This act is designed to make the employer seriously consider the effects dismissal has on employee security, and to clearly resolve labor issues such as unfair dismissal and unpaid severance pay.

III. Case Two: Labor Case on Disciplinary Procedures
MeeHang Transportation operated a taxi business in Yeosu, South Jeolla Province, with 40 employees. In August 2006, the company decided to raise the taxi drivers’ daily deposit in an attempt to reduce a deficit that had accumulated over several years, but failed to do so due to opposition from the labor union. Intending to push the labor union into agreeing to the driver deposit increase, the company notified union members that the current regular 12-hour work day would be reduced to 8 hours, as stipulated in the Collective Agreement. Union members refused to agree to this, so the company sent each union member a letter warning they would be suspended or dismissed for any further violation of company orders. On September 6, 2006, two employees (hereinafter referred to as “the Employees”) led a group of about 10 union members to the president’s office to protest, swore at the employer and threatened to disclose company corruption to the police.
The company called a Disciplinary Action Committee hearing with four committee members appointed by the company according to the Rules of Employment, and determined disciplinary action for violation of employee responsibility: suspension for three months without pay. On October 26, 2006, the Employees applied to the JeonNam Labor Commission for remedy for unfair disciplinary action. The Labor Commission ruled in favor of the Employees and ordered the company to remedy the situation on December 19, 2006. The employer appealed to the National Labor Commission (NLC) on January 30, 2007, but the NLC agreed with the first ruling. The ruling explains that while there is certainly justifiable reason for disciplinary action, justification for the disciplinary procedures followed is lacking.
The National Labor Commission’s judgment was as follows:
“The reason for disciplinary action against the Employees was for cursing the employer in the process of protesting company decisions, which has been proven as actual fact after looking into voice recordings, related employee statements, and related video materials.
“However, even though reason exists for disciplinary action against the Employees, justification for disciplinary action requires legality in disciplinary procedures as well as reasons for disciplinary action. The employer claimed ‘disciplinary action was justifiable since the company formed a Disciplinary Action Committee according to the Rules of Employment. The collective agreement was invalid as of May 1, 2005 due to cancellation by the employer on October 29, 2004. This means that rules related to composition of the disciplinary action committee are considered contractual parts of the collective agreement, not normative. Therefore, normal disciplinary procedures do not have to be followed in this case.’ However, according to Article 31(1) of the Labor Union Act, standards concerning working conditions and other matters concerning the treatment of employees as prescribed in the collective agreement are given normative effect. This normative portion would be transformed to working conditions of individual employees and remain effective in their labor contracts, even in cases where the current collective agreement has expired and a new collective agreement has not yet been concluded. These normative portions consist of matters concerning wages, various allowances, working hours, holidays, leave, kinds and benefi

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