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

Labor Standards Act Article 26 (근로기준법 제26조) provides that an employer who intends to dismiss a worker must give notice at least 30 days in advance, and that if notice was not given 30 days in advance, the employer must pay at least 30 days' ordinary wages. In other words, even where the employer is in a position to dismiss the worker lawfully, it must either notify the worker of the dismissal and let the worker continue working for another 30 days, or pay at least 30 days' ordinary wages as an amount in lieu of the notice period. Dismissing a worker without giving notice and without paying the allowance can even lead to criminal punishment of up to two years' imprisonment or a fine of up to KRW 20 million.

The cases in which this obligation is waived are exhaustively listed in the Act. First, where the worker's period of continuous employment is less than three months. Second, where it is impossible to continue the business due to a natural disaster, calamity or other unavoidable cause. Third, where the worker has intentionally caused serious disruption to the business or inflicted property damage, and the case falls under the grounds prescribed by Ordinance of the Ministry of Employment and Labor. The specific details of this third ground are set out in Article 4 and attached Table 1 of the Enforcement Rule of the Labor Standards Act (근로기준법 시행규칙 제4조, 별표 1), so in practice you need to separately confirm whether the worker's misconduct falls under that Table. The mere existence of grounds for disciplinary dismissal does not by itself exempt the employer from giving notice.

This dismissal notice allowance becomes an issue only where there is a “dismissal”; if the worker quit of their own accord (that is, resigned), neither the notice obligation nor the allowance payment obligation under Article 26 arises. However, the mere fact that you received a letter of resignation, or that there is an outward appearance of the worker saying “I will quit,” is no reason to feel safe. Even if it looks as though the employer suggested resignation and the worker accepted, if the substance is a dismissal, the obligation to pay the dismissal notice allowance may still be recognized as it stands.

For example, in a case where the employer of a small workplace told a worker, citing a drinking problem during working hours, “If you are going to work like this, I would rather you quit,” and the worker stopped working a few days later, the employer argued that the worker had resigned voluntarily by mutual agreement. The court, however, started from the premise that a dismissal means any termination of the employment relationship brought about by the unilateral will of the employer against the will of the worker, regardless of the name or procedure used at the workplace. It then held that whether the substance is a dismissal or a resignation by agreement must be determined by comprehensively considering the circumstances in which the worker came to resign, the method, intensity and frequency of the urging to resign, the size and working environment of the workplace, and the worker's attitude before and after the resignation. On the grounds that the worker, due to age and other factors, would have found it difficult to find another job and had been living and working in housing provided by the employer; that it would have been hard to keep working at a workplace with only three employees after being urged to resign; and that the worker filed a criminal complaint for non-payment of the dismissal notice allowance immediately after leaving, the court found that the case amounted to a dismissal. As a result, the employer had to pay a dismissal notice allowance equal to 30 days' ordinary wages, together with delay damages at 20% per annum from the day after 14 days had passed since the retirement date under Labor Standards Act Article 37(1) (근로기준법 제37조 제1항) (Daejeon District Court, Judgment of April 7, 2020, Case No. 2019Na2573 (대전지방법원 2020. 4. 7. 선고 2019나2573 판결)).

In the end, the isolated fact that “the worker ultimately said they would quit” does not exonerate the employer, and if the urging to resign amounted to pressure that effectively forced a dismissal, it may still be recognized as a dismissal. Employers proceeding with a recommended resignation would do well to document the circumstances so that the worker's voluntary intent is evident.