Labor Law Q&A details

Chapter 5 Dismissals

Should I apply for Voluntary Retirement?

I work as an engineer in a Korean branch with headquarters in the USA. However, recently, I heard that the business scale of Korean branch will be reduced due to the financial difficulties. Before starting the restructuring in full-scale, the company said that it will receive the application for the voluntary retirement If I do not apply for voluntary retirement, I can be a subject to layoff or in the worst case I can end up losing my job due to the business withdraw. I do not want to quit my job, but I feel like the company is keeping the employees nervous and encourages them to resign. What should I do?

Voluntary retirement refers to the termination of the employment relationship         by recruiting applicants        in accordance with pre-established requirements by means of employment adjustment or resolution of promotion stagnation, etc. in order to overcome business difficulties. If it is done during dismissal process for the business, it will be judged as an effort to avoid dismissal.

If the company has unfairly selected voluntary retirees, forced them to apply for a voluntary retirement, this may be an unfair dismissal, even if a resignation letter is submitted.

However, in general, it is not the one-sided dismissal by the employer, which is the termination of the employment relationship by mutual agreement between the two parties, as the employee accepts the certain conditions suggested by the company and consequently submits the resignation. In the process, even though the company exerted some pressure that it could be disadvantageous if the employee does not accept the recommendation for retirement or the company exaggerates the business situation, it is also the attitude of the judiciary that it is hard to see it as coercion or deceit in which makes a worker submits a resignation letter. Therefore, it is important to bear in mind that it is difficult to be recognized as a dismissal if an employee submits a resignation letter.

After all, if you are not willing to accept retirement, you should continue to work for the company, although it is not easy. If you refuse to the end, you may actually be the subject of restructuring. However, restructuring is justified under strict requirements such as urgent business needs. Therefore, it is important to look carefully at such circumstances to determine whether there is a possibility that the company will actually carry out a restructuring and if so, whether it is within reasonable and proper standards for you to be selected.

If the company is to carry out a termination in the process of withdrawing its business from Korea, it is considered to be a dismissal, different from layoff. In this case, complying with the requirements for business dismissal is not needed.

For further questions, please
call (+82) 2-539-0098 or email bongsoo@k-labor.com

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