Hello, this is Law Firm Cheongchul attorney Choi Jong-ha.

It is said that every office worker keeps a resignation letter close to their heart. However, these days, quitting and changing jobs has become frequent. Many employees are suffering losses because they are unaware of the legal rights they must address before resigning.

Based on years of practical experience in labor law, we provide detailed guidance on the 3 key matters to confirm before resigning at Law Firm Cheongchul.

1. Verify the Accurate Calculation of Severance Pay

Eligibility for Severance Pay and Basic Principles

All employees who have worked more than 15 hours a week for more than a year can receive severance pay, regardless of work format or employer size. However, many employees are often unaware of the proper methods for calculating severance pay and end up suffering losses.

Average Pay vs. Normal Pay - Key Points

Severance pay is generally calculated based on 3 months' average pay. However, many employees overlook that if the average pay is lower than the normal pay, the normal pay should be applied.

In particular, in workplaces where the standard working hours per month are 209 hours (in cases where Saturday is designated as an unpaid holiday), it is quite common for the normal pay to exceed the average pay.

Comparison of Actual Calculation Cases

Case Conditions:

• Start date: January 1, 2015

• End date: January 1, 2025 (10 years of service)

• Monthly base salary: 5 million won (as of 2024)

• Monthly standard working hours: 209 hours

Incorrect Calculation Method (Applying Average Pay)

• 3-month average pay: 15 million won ÷ 92 days = 163,043 won/day

• Severance pay: 163,043 won × 30 days × 10 years = 48,913,044 won

Correct Calculation Method (Applying Normal Pay)

• Daily normal pay: (5 million won ÷ 209 hours) × 8 hours = 191,387 won/day

• Severance pay: 191,387 won × 30 days × 10 years = 57,463,459 won

Difference: A whopping 8.54 million won!

Checklist of Items to Confirm Before Resigning

• [ ] Confirm the monthly standard working hours at our company

• [ ] Calculate and compare normal pay and average pay

• [ ] Verify the method of calculating severance pay (including retirement pensions)

• [ ] Compare the company's expected payment amount with legal standards

2. Secure Rights to Unused Annual Leave Pay

Principles of Annual Leave Pay

For each unused day of annual leave, you can receive one day's normal pay as compensation. However, in reality, most employees do not receive this payment properly.

Traps of Annual Leave Encouragement Programs

Many companies have implemented "annual leave encouragement programs," but it is very rare that they are operated legally in practice. Courts strictly assess the lawful operation of these programs, making it difficult for small companies to comply with all procedures.

Scope for Claiming Annual Leave Pay Upon Resignation

• Limitation Period: Claims can be made by calculating back 3 years from the time of resignation

• Scale: Based on 10 days of unused annual leave per year, at the level of 1 month's salary

• Resigning Before Program Completion: Even if at a workplace that uses a lawful program, there is an obligation to pay compensation if resigning before program completion

Checklist for Verifying Annual Leave Pay

• [ ] Confirm unused annual leave days in the last 3 years

• [ ] Inspect the company's implementation of the annual leave encouragement program

• [ ] Check whether annual leave pay is reflected in severance pay

• [ ] Confirm the schedule and method of payment

3. Review Company Data Management and Non-Competition Obligations

Preventing Company Data Leakage

Just as important as collecting what to take upon resignation is ensuring that no issues arise for the company. Leakage of internal company data can constitute breach of trust for business and requires particular caution.

Precautions

• All materials created during company work are company property

• If personally retained or leaked externally, there will be legal liability

• Securing large amounts of data just before resignation may pose a serious issue

Review of Non-Competition Obligations

Some companies include clauses in contracts that impose a "prohibition on moving to competitors for a certain period after resignation". However, these clauses are not necessarily valid.

Criteria for Judging the Validity of Non-Competition Agreements

The court assesses the validity of these agreements by considering the following factors comprehensively:

• Valuable interests to protect for users

• The status of the worker prior to resignation

• The duration, area, and target occupations of the competition restriction

• Whether compensation is provided to the worker

• The circumstances of the worker's resignation

• Public interest and other circumstances

If it excessively restricts the constitutional right to freedom of occupation, it may be deemed void.

Checklist for Legal Risks Before Resigning

• [ ] Check for the existence of personal ownership of company materials

• [ ] Inspect the existence of non-competition clauses

• [ ] Review the specific contents of non-competition agreements

• [ ] Analyze the likelihood of competition with the new employer

Frequently Asked Questions (FAQ)

Q1. What is the minimum working period to receive severance pay?

A: If you work more than 15 hours a week for more than a year, you can receive severance pay regardless of work format or company size.

Q2. Which is more favorable, average pay or normal pay?

A: Generally, normal pay is often more favorable, and legally, the higher amount of the two must be applied.

Q3. Until when can annual leave pay be claimed?

A: Claims must be made within 3 years from the resignation date; rights are lost after the limitation period.

Q4. What happens if a non-competition agreement is violated?

A: It varies by the validity of the agreement, and excessive restrictions can make it void, so professional consultation is necessary.

Q5. What if there is a dispute in calculating severance pay?

A: If it cannot be resolved after negotiating with the company, you may consider reporting to the labor department or taking legal action.

Professional Labor Law Consultation at Law Firm Cheongchul

Why choose Law Firm Cheongchul?

• Rich practical experience: Know-how from specialized attorneys with backgrounds in large law firms

• Systematic approach: Providing comprehensive solutions beyond simple consultations

• Rapid response: Efficient processing tailored to your resignation schedule

• Reasonable costs: Optimal results at the best cost

Introduction of Labor Law Specialized Attorneys

Choi Jong-ha

• Graduated from Seoul National University, Department of Law, and Yonsei University Law School

• Specialized experience in personnel and labor at Law Firm Yulchon

• Specializing in corporate legal affairs, personnel and labor, and labor criminal law

Consultation and Inquiry Information

📞 Phone Consultation: 02-6959-9936
📧 Email: jhchoi@cheongchul.com
🏢 In-Person Consultation: 7th Floor, Rich Tower, 403 Teheran-ro, Gangnam-gu, Seoul
🚇 Directions: Exit 9 or 10 of Seolleung Station on Line 2 and Bundang Line

Consultation Reservation and Process

1. Make a reservation in advance via phone or email

2. Provide explanation of the situation and prepare materials

3. Consult directly with specialized attorneys

4. Present customized solutions

Conclusion

Resigning is a new beginning, but it is important to properly secure your legitimate rights beforehand. Matters such as severance pay, annual leave pay, and legal risk management are all complex legal issues, so it is wise to seek professional help.

Law Firm Cheongchul will do its best to protect the rights of workers about to resign, based on accurate legal knowledge and rich practical experience.

Consult with Law Firm Cheongchul right now!

This content is intended to provide general legal information, and specific legal advice on individual matters should be obtained through consultation with a specialized attorney.