Notice Period: Understanding the Required Notice for Termination

In Korea, employers are required to provide a dismissal notice period of at least one month prior to termination. This ensures that employees have sufficient time to prepare for the end of their employment.

Reasons for Termination: Grounds for Dismissal

According to Article 26 of the Labor Standards Act, employers must provide at least 30 days' notice before dismissing a worker, including for management reasons. If an employer fails to provide this notice, they must pay at least 30 days' ordinary wage. Exceptions to this rule include situations where business continuity is impossible due to a natural disaster, accident, or other unavoidable circumstances, or if the worker causes significant disruption or damage to the business. These grounds are detailed in the Ordinance of the Ministry of Employment and Labor, revised on June 4, 2010.

Severance Pay: Regulations on Termination Compensation

Employers in Korea are required to pay retirement benefits in line with the retirement pension rules to employees who have worked for more than one year. The specific procedures for payment of these benefits are governed by these retirement pension rules, ensuring fair compensation for long-term employees upon termination.

Termination Procedure: Steps to Ensure Compliance with Local Labor Laws

To comply with local labor laws, employers must follow a clear termination procedure:

1. Advance Notice:

   Notify the employee of the reason for dismissal at least one month in advance.

2. Agreement and Negotiation:

   If the employee agrees to the dismissal, the employment relationship can be terminated smoothly. If not, negotiation between the employer and employee is required.

Dismissal Due to Management Reasons

Article 24 of the Labor Standards Act addresses dismissals necessitated by management reasons, often referred to as layoffs. These include large-scale workforce reductions due to severe management difficulties. The Act requires:

1. Urgent Management Reasons:

   Demonstrating that business closure is inevitable without the dismissal.

2. Efforts to Avoid Dismissal:

   Exploring options like suspending new hires, selling assets, or encouraging voluntary retirements.

3. Collective Bargaining:

   Engaging in sincere negotiations with labor unions and worker representatives to find mutually agreeable solutions.

By adhering to these guidelines, employers can ensure that terminations are conducted fairly and legally, maintaining compliance with Korean labor laws.