I. Introduction
Labor laws are different in every country, and their application exclusive to each country. As long as corporations do business in Korea, they need to observe Korean labor law. Even though a company's headquarters are in another country, Korean labor law applies to any Korean branch offices, in terms of labor disputes and employment relations. The following case of unfair dismissal shows that while a Singaporean-invested company dismissed an employee according to its own corporate operational regulations, they did not consider Korean labor laws. While this company was confident of the legitimacy of a particular dismissal according to its own interpretation of “justifiable causes”, that dismissal was regarded as unfair as it violated Korean labor law.
- May 10, 2012: Employee is dismissed
- May 20, 2012: Employee files for remedy against unfair dismissal with the Labor Relations Commission (LRC).
- July 30, 2012: At an adjudication meeting, the LRC determines dismissal is unfair, and orders reinstatement of the Employee to his/her original position. Back pay equivalent to what was missed since the dismissal is also ordered.
- August 7, 2012: Company appeals to the National Labor Relations Commission.
- Oct 15, 2012: Fine of ₩5 million levied for failure to implement the LRC’s orders.
- November 14, 2012: Chairwoman of the Adjudication Meeting during the appeal suggests a settlement. Both parties accept an adjusted draft of the settlement and finally conclude with a monetary compromise.

There were two critical questions in this case: First, when dismissing an employee, can a company’s sales department dismiss sales staff due to a lack of qualifications for the work without going through the personnel department? Second, is a written notice of dismissal legal if it only lists the date of dismissal and not the reasons for the dismissal?

II. LRC Adjudication Meeting and Details of the Case

This case of unfair dismissal occurred at the Korean branch of a multinational company located in Singapore (Hereinafter referred to as “the Company”). This dismissal could have been justifiable, but it was determined to be unfair because the Company failed to follow the required disciplinary process due to a lack of understanding of Korean labor law. The Company opened its Korean branch in November 2009 and began by selling its products through Department Store sales outlets before extending its business through creation of production facilities for related products. While opening its sales office and sales outlets in major department stores, the Company hired this employee (Hereafter referred to as “Employee A”) as an assistant sales manager in September 2010. Employee A displayed a good attitude during the six month probationary period, but failed to follow his immediate superior’s instructions after that time, seeming to think he was in charge of all sales in Korea. Employee A’s immediate superior was a Singaporean sales manager who directed him and received reports from him, splitting his time between Singapore and Korea. Employee A had received 14 email warnings for failing to follow instructions, neglecting his duties, making critical mistakes at work, and poor performance, etc. for a period of one year before his dismissal. As the corporate structure of the Korean branch became firmly established, the Company decided to change the employment contract form from the form used for the Singapore head office to a new one for the Korean branch, and asked all employees to sign the same contract as before, but on the new Korean branch form. All employees signed the new contract forms, except Employee A, who refused. His immediate superior then recommended disciplinary action for Employee A with the sales department head in Singapore. Upon review of Employee A’s history of warnings from his immediate supervisor, the Company decided to dismiss Employee A. The Singapore sales department head visited the Korean sales office on May 10, 2012, explained the reasons for dismissal and handed a notice of dismissal to Employee A. Employee A then filed for remedy against unfair dismissal with the Labor Relations Commission, which ruled that Employee A had been unfairly dismissed. The LRC’s verdict was as follows:
“It is regarded as justifiable to dismiss an employee when implemented in cases where the violations were serious enough to discontinue employment relations in terms of socially accepted common sense. In determining whether the violations are serious enough to discontinue employment relations in terms of socially accepted common sense such items as the employer’s business purpose and characteristics, workplace conditions, the employee’s position and job description, motivation for and severity of the violations, the effects on corporate order, the employee’s previous attitude, and other related items shall be collectively reviewed ”(Supreme Court on July 8, 2003, 2001du8018).
In reviewing the above legal principle and the established facts, we would like to make judgment on this case based upon the following: 1) What the employer mentioned: absences without permission, work negligence, poor performance, and mistranslations are acceptable reasons for disciplinary action, but they are not serious enough to dismiss the employee; 2) The employer claimed that the Company had scolded Employee A many times for his poor attitude, poor performance, and misuse of authority etc., but the Company had not given him warning letters or disciplined him officially; 3) What the employer claimed as the reasons for dismissal (poor attitude, poor performance, and misuse of authority), are not reasons for dismissal as stipulated by the Company’s Rules of Employment and the employment contract. Accordingly, the use of dismissal, the most serious form of disciplinary action for Employee A, is judged to be unfair, and abuses the discretionary power of the employer’s personnel management rights.

III. Reasons the Employer Accepted a Settlement

1. Reasons for the appeal and the severity of disciplinary punishment
As the Company was certain that the first judgment of the Labor Relations Commission did not reflect the severity of the employee’s violations such as his disobedience to instructions, absences without permission, neglect of his work duties, and poor performance, it decided to appeal. Regarding his work duties, Employee A had received 14 warning letters from his supervisor over the past year, and there were several instances of insulting behavior towards his immediate superior. In particular, despites his lower position, Employee A had behaved as the Sales Director for Korea, which disrupted the corporate structure. The Company had given Employee A several opportunities to improve his behavior but he had not made the effort, and so it decided to dismiss him after determining that giving other opportunities would be pointless. In the first LRC Adjudication Meeting, the Company had sent the Personnel Manager, but she had not been involved with this case, could not explain the case in detail, and could not provide sufficient documentation. Accordingly, at the appeal adjudication meeting, the Company sent Employee A's supervisors who actually dismissed Employee A and were better able to explain the reasons behind Employee A's dismissal.

2. Cases where the sales department, and not the personnel department dismisses an employee
Even though reasons for disciplinary action with Employee A were considerable, these 14 email warnings were not from the personnel department in charge of the company’s personnel management rights, so could not be seen as official discip