Our employment rules have a probationary period of three months once employment begins. Are labor laws fully applied to workers during their probationary period? If a worker is deemed unsuitable during the probationary period, is it possible to terminate the employment relationship?
Korean labor law applies to probationary workers. Workers who have been employed and are in their probation period of not more than three months can be paid 90% of the minimum wage (Article 5 (2) of the Minimum Wage Act). However, exceptions are applied to those who have entered into an employment contract for a specified period of less than one year. Wages of probationary workers can be set lower than regular workers through labor contracts, employment rules, etc. For this reason, probation periods are not included in the average wage calculation period (Article 2 of the Enforcement Decree of the Labor Standards Act). However, the probationary period is included in the continuous working period when calculating retirement allowance and annual paid leave.
In order to be recognized as a probationary period, it is necessary to specify the ground rules for probation in labor contracts and employment rules. During the probationary period, the employer’s rights are more widely recognized than when an employee is retained after the probationary period. Therefore, an employer has more discretion regarding hiring and dismissal. However, during the probationary period, the qualification must be objectively fair, and should be recognized as reasonable and acceptable according to social norms. If it is not, dismissal can be deemed an unfair dismissal.