1. Principles

(1) In regulating reasons for disciplinary action in the rules of employment, the company can stipulate various levels of disciplinary punishment for identical cases. The company can regulate standard types of disciplinary punishment for violations, but it can also stipulate heavier punishment according to the severity of the violations. For the most part, it is up to the company what disciplinary punishment they wish to give. However, this discretion requires a socially acceptable balance between the reasons for disciplinary action and the disciplinary punishment. In cases where the employer gives a very heavy punishment for a light violation, the disciplinary action becomes an abuse of the employer’s right and becomes null and void. Supreme Court ruling on Jan 11, 1991: 90daka21176


(2) In cases where there are several violations of company regulations that the employee should be punished for, whether disciplinary dismissal is justifiable shall not only be determined by each individual violation. Instead, the employer shall include all violations when considering dismissal, and reach a decision based on whether the violations are serious enough to discontinue employment relations in terms of socially acceptable common sense. Supreme Court ruling on Dec 9, 1997: 97nu9161

(3) In choosing a type of disciplinary punishment, the employer shall first review the employee’s previous attitude, performance results, and severity of the violations. Supreme Court ruling on Feb 12, 2004: 2003du127578


(4) If there is an admitted reason for disciplinary punishment, the kind of disciplinary punishment the employer shall apply is at the employer’s discretion. If the employer determines disciplinary action according to appropriate criteria for the severity of disciplinary punishment, unless such criteria are unreasonable, and if such application was not inappropriately used to dismiss particular employees, such disciplinary action is legal, and does not violate the principle of balanced application. Supreme Court ruling on Oct. 12, 2007, 2007Du7093


(5) Dismissal is justifiable only when the employee commits so serious a violation that the company cannot reasonably continue the employment relationship any longer. Whether the violation is a terminable offence shall be decided after considering all factors, such as the business target and characteristics, workplace conditions, the employee's status and job responsibilities, the incident's motivation and context, possible danger of obstructing corporate order, and his/her previous work attitude. Supreme Court ruling on Dec. 28, 2007, 2006Da33999.


2. Types of Disciplinary Action

(1) Verbal warning
A warning is given to point out the employee's violation, to ask for self-correction, and to prevent any further violations. It is called a verbal warning, because it does not require a written explanation.

(2) Written warning
A reprimand is a disciplinary action that involves scolding someone for a mistake. This method demands that the employee submit a written explanation and asks for self-correction. In some cases, additional consequences may follow the reprimand. Accordingly, a detailed explanation of the reprimand shall not necessarily be prescribed.

(3) Wage reduction
If a wage reduction is allowed without limit, the employee may easily be taken advantage of. Thus, Article 95 of the Labor Standards Act regulates that the amount of reduced wage for each infraction shall not exceed 50% of one day's average wage of the relevant worker and the total amount of reduction shall not exceed one-tenth of the total amount of wages in one pay period.

However, if the employee arrives late or leaves early for personal reasons, wage reduction in this case is not a disciplinary measure but a matter of wage calculation.

(4) Demotion
For a given period, promotion is restricted or the position is lowered.

(5) Suspension from office
This disciplinary action concerns suspending those employees who violate company regulations while retaining their status. Wages are also unpaid during the suspension period.

However, under extended suspension, the employee cannot receive wages or to seek another job, and so the period shall be limited to 6 months.

(6) Disciplinary dismissal
This is a disciplinary action to sever all labor relations with the employee whose violation is so severe that the company cannot expect managerial order without excluding him/her.

3. Related cases

(1) An employer dismissed an employee for a minor violation, even though the employee had received awards several times. As this disciplinary action was the heaviest form of punishment, it went beyond the employer’s right to take disciplinary action. Supreme Court ruling on September 13, 1978: 76nu228

(2) An employer dismissed an employee for one incident of misbehavior. From all the options available, the employer chose what appeared to be the heaviest form of punishment. Furthermore, as this employee’s one incident of misbehavior was not judged to be a common sense reason to discontinue employment relations, the disciplinary dismissal was determined to be an abuse of the employer’s right to take disciplinary action, and was null and void. Supreme Court ruling on Mar 22, 1996: 95nu3763


(3) After a transfer to another department, an employee did not show any improvement in attitude over a long period, despite receiving repeated warnings for negligence at work, so dismissal was justifiable. Since having been transferred to the Business Department, an employee’s intentionally negligent behavior at work became reason for disciplinary punishment under the company’s service regulations. Providing labor is the most fundamental obligation that an employee has, and his high position as a general manager would make him more likely to become a target for criticism. Although the company had warned him several times directly and indirectly, through transfer, reprimand, and employment without a specific job, etc. for his repeated negligence, he did not show any regret or improvement. His behavior infringed seriously enough on the need for mutual reliability with the company that it decided to break the employment contract. In considering motives, causes, and process of the employee’s negligence, it was judged that dismissal of this employee was within the realm of the employer’s right to take disciplinary action. Accordingly, the Seoul District Court agreed with the National Labor Commission’s ruling that this dismissal was justifiable. Seoul District Court ruling on Oct 20, 2006: 2005guhap35810