Labor Law Q&A details

Chapter 5 Dismissals

What are the end-of-contract entitlements in case of a termination of contract by voluntary resignation? How are the financial rights calculated?

Article 4 (Establishment of Retirement Benefit Schemes), Article 9 (Payment of Retirement Allowances), Guarantee of Workers’ Retirement Benefits Act, as last amended by Act No. 10967, July 25, 2011

When an employee whose consecutive working period is one year or more retires with whatever reasons, an employer shall pay him/her severance pay with a prorated amount equivalent to average wages earned for 30 days for each year of his/her continuous service.

*Guarantee of Workers' Retirement Benefits Act

Article 4 (Establishment of Retirement Benefit Schemes)(1) Each employer shall establish at least one retirement benefit scheme in order to pay benefits to retiring workers: Provided, That this shall not apply to workers whose continuous service period is less than one year, nor workers whose average weekly working hours over a four-week period is less than 15 hours.

(2) In establishing a retirement benefit scheme pursuant to paragraph (1), no differentiation shall be made within the same business in respect of the application, etc. of the method for calculating the amount of benefits or contributions.

(3) If any employer intends to establish a type of retirement benefit scheme or change an existing type into a different one, the employer shall, if a trade union participated bya majority of workers exists at the business concerned, obtain the consent of the trade union, and if no such trade union exists, obtain the consent of a majority of workers (hereinafter referred to as "representatives of workers").

(4) If any employer intends to change the details of a retirement benefit scheme established or changed pursuant to paragraph (3), he/she shall seek opinions from the representatives of workers: Provided, That if the employer intends to change such details in a manner unfavorable to workers, he/she shall obtain the consent of the representatives of workers.

Article 9 (Payment of Retirement Allowances)

Where any worker retires from his/her office, the employer shall pay such worker a retirement allowance within 14 days from the date when a ground for the payment occurs: Provided, That the payment date may be delayed under an agreement by the parties concerned in extraordinary circumstances.

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