Workplace Restructuring

III. Case Studies

Section 2. Managerial Dismissal for White-color Employees

1. Summary of Related Case

“Survival of the fittest” applies not only to employees, but also to companies. Companies that cannot adjust to changes disappear, but those that can quickly make themselves relevant to changes can survive. Company M (hereinafter referred to as “the Company”) requested this labor law firm to reduce redundancy in its management consulting business. The Company hired about 20 consultants and support personnel, and was operating two business organizations in human resources management consulting and outplacement consulting. As the Company had been gradually losing money with outplacement consulting, it decided to close this failing division and focus more on human resource management consulting. Due to redundancy arising from this reorganization, the Company decided to dismiss 7 redundant employees for managerial reasons. Those targeted for this managerial dismissal were five regular employees and two non-regular employees. The Company asked for the reductions to be completed within three months.


2. Details of Managerial Dismissal

In order to complete managerial dismissal within the expected deadline, the Company shall establish plans and implement them according to schedule. It is hoped that employees targeted for managerial dismissal voluntarily agree to accept early retirement program (ERP) compensation and resign, but in reality it is very hard to conclude acceptable agreements as employees demand more compensation from the company. Accordingly, the company can initiate negotiations with those targeted employees when it is implementing procedures necessary (according to Article 24 of the Labor Standards Act) for managerial dismissal at the same time.


September : Occurrence of redundancy
Sep ~ Oct : Employee transfer, Use of ERP, Cancellation of the dispatch service agreement



The Company immediately terminated the service agreement for two dispatch employees (a receptionist and an office assistant) by paying 30 days’ dismissal allowance, in keeping with a special article of the “Service Agreement” where party A can terminate the contract in cases of redundancy.

In seeking applicants for the ERP, two persons from the division to be closed applied, and the Company ensured them the ERP bonus, unemployment allowance, etc. However, the Company had to persuade, through individual meetings, the remaining three employees to accept ERP resignation. The Company explained to these three employees that they would be dismissed without compensation if they refused to voluntarily resign and receive an ERP bonus, as the Company was following the correct procedures to dismiss for managerial reasons. These employees accepted the ERP as the best option. In the following sections, I would like to introduce methods for communicating managerial dismissal through individual meetings to ensure smoothness of proceedings.

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

    • 맨앞으로
    • 앞으로
    • 다음
    • 맨뒤로